After taking the electricity grid by storm, is clean energy set to race ahead on Britain’s roads?

Malcolm crop 2

Malcolm Brinded CBE FREng FEI, President of the Energy Institute

Malcolm Brinded CBE FREng FEI, President of the Energy Institute, on why Parliament’s sight should now be fixed on road transport fuels.

Something extraordinary happened in the UK energy system last year.

To understand its significance, a little time travel is needed – back to 1950 when coal accounted for 97% of electricity generated in the UK. In what was a recently nationalised industry, coal was the dominant source of power, lighting homes and sparking the era of consumer gadgets and household appliances we’re familiar with today.

Fast forward 67 years. Coal last year plummeted to less than 7% of electricity. On some days, coal is entirely absent from the mix – in April this year, we went more than 3 days continuously without burning any coal. Waving goodbye to coal has helped keep us in step with our carbon targets so far – the UK is expected to outdo the carbon reductions required during the first fifteen years of the Climate Change Act – as well as made a huge impact on improving air quality.

In its place, at least in part, we’ve seen a surge in renewables – principally wind and solar – which last year pushed low carbon sources (including nuclear) to beyond half of our electricity mix for the first time. The dramatic cost reductions that have led to this could not have been imagined even five years ago.

Now, in a twist of fate, professionals working across the UK energy sector, and surveyed for the Energy Institute’s Energy Barometer 2018, have predicted similarly dramatic fortunes for clean fuels on Britain’s roads.

Just like coal on the grid in 1950, petroleum today dominates our roads, making up 98% of the fuel used. Knowing what we do about the Earth’s climate and the impact of air pollution on premature deaths, this can’t continue.

Breaking with more than a century of automotive convention, the EI’s members predict that a low carbon mix of electricity, hydrogen and bioliquids will account for more than half of the fuels we use to get around by 2040 – sooner than many other projections have predicted.

If this were to be the case, it would imply the number of vehicles using low carbon alternatives would significantly outnumber conventional combustion engines on the road – even before the Government’s 2040 ban on the sale of new petrol and diesel cars takes effect.

And our survey respondents aren’t environmental idealists – they’re engineers, scientists and economists well-versed in the day-to-day realities of the energy system, many of them working in oil and gas. And it complements last year’s Barometer finding, that the UK’s heat mix will also see a rebalancing away from natural gas to alternative sources.

The parallels with coal don’t extend to foreseeing the imminent end of the petroleum era – it will still play an important role in road transport for some decades, alongside the new kids on the block.  And petroleum will continue to have a major role in shipping, aviation and chemicals.

Nor will the shift be without its challenges. Concerns are raised in the Energy Barometer about the capacity of the grid to accommodate demand and the lack of incentives to install the necessary recharging network, in particular outside major cities.

It’s not out of step with what is needed to meet the UK’s carbon targets. Transport accounted for 26% of the UK’s greenhouse gas emissions in 2016, making it the highest emitting sector in the UK and overtaking energy generation for the first time. The Committee on Climate Change, which advises ministers, indicates the UK will need to reach near zero emissions from road transport by 2050.

But on meeting those overall targets, the picture painted by the Barometer is much less rosy. It finds energy professionals now less confident than they were a year ago that the UK will deliver on its targets for 2032 and through to 2050, despite the Government having brought forward its Clean Growth Strategy designed to do so. Indeed 5 times as many Barometer respondents expect us to fall short of the fifth carbon budget than expect us to meet it. A third of respondents don’t appear to be aware of the content of the Clean Growth or Industrial Strategies, reflecting the fact that further work is needed to bring them to fruition and communicate them.

Policy shortcomings are exacerbated by unprecedented political risk, notably in the form of Brexit, which has risen from fifth to second in Barometer respondents’ top concerns since last year. Despite ministers being a year further into negotiations with Brussels, the fog of uncertainty around skilled workforce availability and around our future relationship with the EU’s single energy market has not lifted.

But all that said, after well over a century, many energy professionals do seem to be calling time on the dominance of the internal combustion engine on our roads, for cars in particular.

The big question is whether one of the alternative fuels will dominate – and which that might be – or whether a broad mix of competing options will prevail, making visiting the forecourt a very different experience for the driving public.

The Energy Institute’s Energy Barometer is an insightful tool for those shaping the UK’s energy future. It is precisely because energy professionals are best qualified to understand the complexities and trade-offs involved, that policy makers should heed the picture painted in its pages.

This blog post first appeared as an article in Energy Focus, the magazine of the All Party Parliamentary Group for Energy Studies on 14 August 2018.

Cognitive technology for the oil and gas industry

LNIAZI Photo 2017

Luq Niazi, Global Managing Director, Chemicals & Petroleum, IBM

Luq Niazi, IBM Global Managing Director, Chemicals & Petroleum Industries, guest writes our blog ahead of speaking at IP Week 2018, 20-22 Feb…

The oil and gas industry is experiencing the largest transition in its history, driven by changing needs and approaches to the world’s energy, transportation and manufacturing systems, as well as the changing dynamics of product portfolios, and increasing demand for greater advances in molecular science and product innovation.

With cost pressures remaining and customer expectations continuing to rise, the need for improvements across the entire value chain are seismic. Businesses are looking at new strategies to grow and differentiate. Digital transformation is opening more doors to new markets, enabling new business models across ecosystems to form and driving new levels of performance and enhanced organisational capability and knowledge.

The challenge for oil and gas companies is where best to apply digital solutions, how fast and how far to go. This will be the focus of my contribution at IP Week next month, alongside others working in this sphere.

There are four key technologies – cloud, cognitive/AI, internet of things and blockchain –  that are combining to generate this significant transformation across industries. As a global leader in services, technology, industry and R&D, IBM is spending almost all of its time focused on driving these capabilities forward with clients, partners and the wider chemicals and petroleum industries.

What we are finding is that forward-thinking industry leaders have already identified the potential of these digital enablers and are building new strategies and capabilities to address the skill gaps they have in their organisations that are required to develop the potential of digital opportunities.

To accelerate adoption, organisations will need to combine deep industry skills, digital technology expertise, research capability and a culture of continuous experimentation and learning. Together, when applied in a focused way to key business challenges, they have the potential to deliver significant innovation and improvement to both top and bottom line performance.

Focusing on cognitive technologies for the oil and gas industry, these solutions are able to process huge volumes of structured and unstructured data – from chemical formulas, to visual images and sound – to derive new levels of insight and deliver recommendations, often close to real time, to industry professionals through a portfolio of cognitive advisors.

For example, there are over 150,000 SPE reports written about experiences in upstream. The ability to garner deeper insight from all of this information can accelerate and considerably improve decision making, as well as drive increased performance.

Based on our Institute for Business Value research and our operational experience, we are seeing cognitive technologies unlocking value when applied to solving complex problems. Across the 30 plus projects we have in the chemicals and petroleum industries, we see the application of cognitive/AI initiatives as broadly being split 60% in upstream and 40% in downstream, manufacturing, supply chain and retail.

In my session at IP week I will share more details, with specific examples to show how we are helping clients further advance the adoption of cognitive technologies as part of their digital transformation journey.

Industry digitalisation is a key session at IP Week 2018, taking place on day one of the conference. For more information and the full agenda, please visit www.ipweek.co.uk

Could Clean Energy Be Brexit Britain’s Get Out Of Jail Free Card?

 

Malcolm crop 2

Malcolm Brinded CBE FEI, President of the Energy Institute

In Whitehall, Ministers and their advisers are wrestling with a policy conundrum like no other. It’s one that will be make-or-break for the UK economy. And it will define the UK’s standing on the world stage for decades to come.

But it’s not Brexit I’m talking about. It’s how to set the UK on course to climate change leadership and to leverage that as a central plank of our industrial growth strategy.

Almost ten years on from passing the Climate Change Act, the UK has so far met its statutory carbon targets. Emissions are now 42% lower than the 1990 baseline.

Coal use has bombed as quickly as the price of renewable energy technologies. There can be days now on which coal plays no role in the UK. Wind and solar provided 14% of the UK’s electricity last year; on some days, this can double.

While some mistakes have been made, and the cost of subsidies has never been far from the headlines, this progress has been achieved in parallel with economic growth – in fact GDP has grown by 60% over the same period.

But you don’t need to look far into the future to see trouble ahead.

Ministers have accepted an emission reduction target of 57% by 2030 but have so far offered no means of achieving this. Aside from giving a costly government guarantee for Hinkley Point C nuclear power station, policy has largely been on hold since the Brexit vote.

More than three quarters of the Energy Institute’s professional members, surveyed for the annual Energy Barometer, currently believe the UK will fall short of this target.

But a Clean Growth Plan is expected to be published within weeks. And it couldn’t be better timed. As the UK faces the economic realities of Brexit, clean energy could just become the ‘get out of jail free’ card the country needs.

The same Energy Barometer points to two big opportunities that must be grasped.

First, being smarter with energy would significantly increase the resource efficiency of UK plc.

Energy efficiency is the lowest hanging fruit but it remains the neglected Cinderella of energy policy. Energy Institute members don’t only see it as a priority for meeting emissions targets, they also rate it as lowest risk in terms of investment, and believe it offers the biggest opportunity for the UK’s future economy.

Britain’s homes and commercial properties still offer significant scope for smarter use of energy and the Conservative manifesto promised an industrial energy efficiency scheme to help large companies reduce their energy use.

Greater resource efficiency can only be good for the competitiveness of an economy in which productivity is some 18% below the OECD average.

Second, clean energy innovation could offer a major trade dividend for post Brexit Britain.

Technology transformations often take a long time to arrive – and then move at high speed. All too often in the UK they’ve been treated with suspicion until it’s too late and the commercial advantage has gone elsewhere.

Energy Institute members believe the UK should support emerging clean energy technologies – such as smart technologies and energy storage – at an early stage, capitalising on the UK’s strengths in research, academia and our ability to nurture technology-based start-ups.

The UK has already accumulated considerable exportable expertise. But we need to be faster at commercialisation and better at protecting intellectual property to grab a share of huge potential global markets. Small scale battery storage alone will be worth an estimated $250bn by 2040.

And whilst energy demand plateaus in the OECD, there is still a huge need to improve access to energy in developing nations – which will more than double the energy they source from renewables, gas and nuclear combined by 2040 – all fields where UK capability is already significant.

Clean energy research, innovation and early stage technology piloting are vital. If smaller British innovators are to succeed, government funding needs to flow more quickly, calculated risk-taking is needed in backing early stage innovators and the rules of the game need to be simpler and more predictable.

Withdrawal from the EU block, with whom we committed to the Paris Agreement, must not mean a retreat from Britain’s climate ambition.

Now is the time to plant the seeds from which the UK can develop substantial domestic supply chains and become one of the world’s leading exporters of clean energy skills, services and products, helping to improve access to energy in developing nations and building the global low carbon energy system demanded by the Paris Agreement.

This blog post first appeared on HuffPost on 31 August 2017. 

Fueling the pipeline of women in energy

Jaz Rabadia MBE MEI Chartered Energy Manager

Jaz Rabadia MBE MEI Chartered Energy Manager

A recent report by PWC in association with POWERful Women (PfW) shared that only 6% of executive boards seats in top 100 UK-headquartered energy firms are held by women, a  troubling statistic in the age of women empowerment, diversity and inclusion targets and a changing energy landscape.   With International Women’s Day 2017 only a few weeks away (8 March), what more can we do to attract, retain and promote female talent in the energy sector?

Energy is all around us; in the food that we eat, the roads that we travel, the homes that we live in and the businesses we work in. It’s something we all take for granted. Yet it’s not something we are taught at school.  Most of today’s energy professionals have fallen into the sector by accident and never looked back. I want tomorrow’s leaders to join because they want to, with a purpose and on purpose. The energy industry is incredibly diverse and full of opportunities to learn, to grow but most importantly to make a difference.  Offering careers in oil and gas, renewable energy, energy efficiency, product innovation, energy policy and public engagement to name a few, the sector has something for all skill sets.

So how do we attract more women into energy from an early age? The process needs to start at home and then must continue on into schools. We need to raise awareness of the range of energy careers available and showcase the many amazing women already working in energy. As practitioners, we have a duty to reach out and inspire the next generation of energy professionals.  So where do we start?  By volunteering to talk at a school careers event, by posting fun facts about your role on social media or by just sharing your career experiences with your daughters, grand-daughters, nieces and the young boys in the family too!

But once we’ve jumped the first hurdle and attracted some women into this male dominated sector, what can we do to ensure we keep them? Similarly to other industries facing this challenge, the key is to provide, development opportunities, job satisfaction, flexibility and inspirational role models. As someone who entered the energy sector as a young female, I know too well how important these all are.

A collaborative environment that allowed me to be creative, to grow and to develop others is what has kept me in this industry for over a decade. I’ve had many supporters over the years who have been fundamental to my progression. Through the Energy Institute, I have obtained Chartered Energy Manager status, won the Young Energy Professional of the year award and now sit on the Energy Institute Council. These achievements have not only boosted my confidence, but given me a sense of professional credibility when I most doubted myself. We need to do more to promote, showcase and champion the women making waves in the energy sector. So, shine a light on a female energy professional you know, enter them for an award, put them forward for a guest blog, or simply tell them they inspire you.

PfW is a great initiative designed not only to showcase but also most importantly to develop the best women in the industry. Developing female leaders within the sector is crucial to ensuring we have a seat at the table and are able to influence decisions at the highest level. As members of this growing industry, we are surely the best ambassadors of it, so let’s shout about how great it is from the solar paneled rooftops and help each other on the climb to the top. If each of us inspired just one more woman into the sector, imagine the difference we could collective make.

Happy International Women’s Day to all the women (and men) who have inspired and supported me throughout my career in energy

Who really decides the future of our industry? Answer at IP Week 2017

raphael-vermeir

Raphael Vermeir CBE FEI Chairman, IP Week Programme Board

Only a few weeks left before International Petroleum (IP) Week 2017 is upon us.

The programme is now set, although, in all fairness, there is always going to be last minute rearrangements due to travel, availability and other difficulties. But this year, our main challenge so far has been in fitting in so many relevant presentations.

This is a nice problem to have, caused, I believe, by several factors: first the success of last year’s IP Week, second the global political scene and associated energy policy decisions and finally my desire to address “who really decides the future of our industry”. This last factor led us to invite not only NOCs, IOCs, OPEC, ministers, government bodies and regulators of course, but also financial institutions, Climate Change key players, traders and new technology gurus.  And we have been able to gather an impressive line-up of speakers from all these organisations – notably Mohammad Sanusi Barkindo, OPEC’s Secretary General, Dr Hoesung Lee, Chair of the Intergovernmental Panel on Climate Change, Patricia Espinosa, Executive Secretary of the UN Framework Convention on Climate Change, H.E. Dr Mohammed Bin Saleh Al-Sada, Minister for Energy and Industry, State of Qatar, and Igor Sechin, Chief Executive Officer of Rosneft, Gretchen Watkins, Chief Executive Officer, Maersk Oil and Saif Humaid Al Falasi FEI, Group Chief Executive Officer, Emirates National Oil Company.

So the agenda is a lot fuller. Under the theme of “Shaping the industry’s future”, we will be looking at the forces impacting the supply and demand scene, identify the key players in this new world and their response to the challenges they face. A significant portion of the programme will address climate change. We will also receive input from disruptive technology experts as well as new financial players, see how the lower prices have been dealt with and how the gas industry will cope in this environment.

I am particularly looking forward to the discussions with OPEC, the reactions to political developments in the US, Russia and the ME, the role of natural gas and specifically of LNG, the importance of the Far East and Africa on the demand curve and of course how the unconventionals have fared.  The climate change sessions should also be particularly interesting.  It will be a busy and I trust very engaging programme – it will also be great to catch up with so many colleagues and make new connections over the three days of IP Week activities.

I leave you for now with a scene setter from BP, who have just released their Energy Outlook report, which reviews long-term energy trends and develops projections for world energy markets over the next two decades

‘The global energy landscape is changing. Traditional centres of demand are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns. More than ever, our industry needs to adapt to meet those changing energy needs’ – Bob Dudley, BP group chief executive.

I look forward to welcoming you at IP Week 2017.

 

Empowered by our members

Dr Joanne Wade FEi

Dr Joanne Wade FEI, Chair, EI Energy Advisory Panel

A core aim of the Energy Institute (EI) is to support our members in achieving their professional and learning goals. But equally,  EI members support us as we work towards improving the energy system. By sharing their knowledge, they help to shape the messages we use to drive progress and engage with policy makers and wider industry. The Energy Barometer survey is one of the most powerful mechanisms through which EI members can provide this vital input.

The 2016  survey, conducted in February, was launched just days before the referendum on UK membership of the EU. The general mood in the country of uncertainty and concern about the future was reflected in many of the survey responses, including important detail about areas of concern for energy professionals.  After its launch in Westminster, the report and its findings – particularly those around the potential energy-related impacts of exiting the EU – were picked up by the BBC, Telegraph, Guardian and others. It was recognised as bringing unique insight into the expectations of those working at the heart of the energy industry.

Post-referendum, attention has shifted to the future. The EI has endeavoured to offer an evidence base to policy makers as they set priorities for Brexit negotiations, heat decarbonisation and future industrial strategy.   They welcomed this knowledge, which again was gathered through the support and engagement of EI members contributing to this vital input through written evidence, our recent Brexit debate, and presentations to the Parliamentary Group on Energy Studies.

The EI has also collaborated with the Royal Academy of Engineering and the Association for Decentralised Energy to provide cross-sector recommendations on industrial strategy and productivity, two high priorities for Theresa May’s government going forward. The EI’s submissions continue to be underpinned by the expert contributions of our members which form the narrative carried across these activities.

During the next, crucial, year for the development of UK energy policy, we will continue our efforts to support Government decision-making with a solid evidence base. To be effective, we will rely on our members’ on-going  participation in initiatives such as the Energy Barometer. Collaboration will be increasingly important next year as two new Government departments – DExEU and BEIS – finalise their strategies and begin putting them into action.

Thank you to those who have shared your insights so far. I hope you will continue to support this important work if you are invited to take part in early 2017.

Invitations to join the EI College will be emailed to a limited number of members in early January. Those who accept will be sent the Barometer survey in February. For more information, visit www.energyinst.org/energy-barometer.

Recognition creates inspiration…still, and is so very necessary

Louise Kingham OBE FEI Chief Executive

Louise Kingham OBE FEI
Chief Executive Energy Institute

 

 

The Karen Burt Award was launched in 1998 in memory of Dr Karen Burt, an eminent physicist and active member and Council office holder in The Women’s Engineering Society. She campaigned tirelessly to promote the recruitment and retention of women in science and engineering – a cause which is still very much alive and important today as it was when she first began simply because of the scale of shift we have to make.

This Award in particular recognises the best newly qualified female Chartered Engineer and aims to encourage more women to achieve Chartered Engineer status in either engineering, applied science or IT. This year’s winner, Clare Lavelle, was nominated by the Energy Institute so we were especially delighted for Clare when she won.

Clare works as an energy consultant for Arup, specialising in offshore energy: offshore windfarms, wave and tidal as well as oil and gas decommissioning. She inherited her interest in engineering from her father and his enthusiasm for technology.  She studied physics and maths and enjoyed the discipline and rigour of those subjects. Luckily, Clare had a reasonably rare influence in her life which many do not, so we still struggle to undo societal norms that work against the promotion of STEM careers to girls in particular – those influences which comes from our parents and the teaching profession largely who can often themselves be unaware of the real opportunities a STEM-based education can provide.

Clare finds working in the energy sector very rewarding because energy professionals and the decisions that they make have real impact on society, climate change and people’s quality of life.  So, rightly, she feels she is doing work that has meaning. Very many congratulations to Clare who now becomes an important role model for others to see and hopefully recognise a bit of themselves in.

All change please…

Louise Kingham

Louise Kingham OBE FEI,         Chief Executive, Energy Institute

 

 

 

In the last few months I’ve been involved in various settings – apparently co-incidentally- discussing how the energy industry is set to change and in some cases why it needs to, as well as what those drivers for change might be. For me this obviously directly leads to discussion about how the EI as a professional body and learned society with a unique proposition promoting and advancing energy knowledge, skills and good practice should prepare. The fora for these discussions have been varied – workshops about the role of a 21st century Institute; our own Brexit and Energy debate, listening to a keynote speaker talking about the outcomes of the CMA report, taking part in discussions promoting diversity of thought and better balance in energy companies, engagement in a review of how the engineering community is organised and of course the EI’s own consultation process with members and other key stakeholders about its future strategy. These are conversations I relish because they make you think and challenge the status quo. Some would say I like them too much but I think it’s what keeps you relevant and ready to adapt when it’s right to do so. They also challenge your creativity.

But it’s important to recognise that many fear change – in quite a natural way because it’s a fear of the unknown and a disruption to a comfort they understand. But for the energy industry, I believe there are some real challenges which mean there are opportunities to harness. Whether it’s putting the customer at the heart of the electricity system in a way which is ‘smart’ and makes best use of technology, or whether it’s new lower carbon business models for organisations heavily invested in fossil fuels. And there are many more I could mention. The point I leave you with is that the EI thinks long term, sees the opportunities and is ready to support energy professionals and their organisations on their journey.

P.S. Change can also bring frustration so if you have downloaded the latest apple operating system on your iPhone and iPad and now find your email tricky to work with go to settings, mail and switch off ‘organised by thread’. Members I’ve shared that one with this week have been delighted!

 

The three S approach to uncertainty

Ian Marchant

Ian Marchant FEI, Immediate Past President

Life seems to be getting more and more uncertain. We are being warned about a Brexit rollercoaster and the oil price, at least in percentage terms, seems to be doing a good impersonation of an elevator; up one minute, down the next. All this uncertainty makes decision-making complex , especially when they concern long-life assets.

Against this background I have been thinking about the question of energy independence. Whilst, in my opinion, this isn’t necessarily a good goal at the national or even local level in its own right, I do believe that investing to reduce one’s dependence on and exposure to both the volatility of the global energy markets and the resilience of local energy distribution systems is something to be considered.

This is where, I believe, a combination of three Ss comes in: solar, storage and software. The cost of solar panels has come down enormously over the last ten years or so but the economics still depend upon support mechanisms, partly because of the profile of solar production. That problem will always be with us and that is where storage comes in.  Installing a suitably-sized lithium ion battery in the home or office allows much more of the solar power to be used on-site and this significantly improves the economics of the whole installation. The third leg is energy management software that can optimise on-site demand (which could include decisions on when to recharge a plug in an electric vehicle), to match the availability of locally produced or stored electricity. The same software can also be used to decide when electricity should be exported and when imported from the grid, an increasing source of value as we move to time of day pricing. Finally, the same software can work out when the stored energy can be used to provide support services such as frequency response to the local grid or through aggregation to the national grid. It really is the combination of the three that makes all this work.

Investing in solar, storage and software may not mean complete energy independence but it will certainly reduce exposure to energy uncertainty and will be an increasingly good investment in its own right. We are seeing commercial offerings starting to emerge in this space and I’m sure there will be more to come.