Energy Security: the urgent wake-up call for decarbonisation

Introduction

Putin’s invasion of Ukraine has dramatically changed the energy landscape and confronts our attitudes and emphasis towards decarbonisation which I believe is now nothing short of critical.

Giving new meaning to the energy transition

When I set-up geo (Green Energy Options) in 2006 my co-founder and I aimed to “make energy visible” to help people understand and manage energy.  As Founders, we wanted to address climate change but alongside this I held a strong belief that we were more likely to have to face the effects of wars over scarce resources such as energy, water, and rare materials than combat rising sea levels. Back then, this view was often seen as pessimistic but regrettably, 16 years on Putin is demonstrating exactly what concerned me.

I say Putin as it’s individuals, not countries, that start wars however it is people who end them. The reason may be physical, economical, or mental, but it is only when leaders lose the support of their populace that they will be defeated or sue for peace. Putin is driving us into a second Cold War which I believe will primarily be an economic war with energy supplies being both his strongest weapon and the source of his financial strength. Consequently, Europe will feel its effects more than the West as a whole: the longer Europe requires Russian energy imports the longer this Second Cold War will continue and deepen and the greater its effects on Ukraine and the rest of the World.

Which brings me to the Energy Transition. The Energy Transition is all about decarbonisation and so far, its rationale has been almost entirely on climate change. Hence, for many people and businesses it has been of moderate, even secondary importance and progress has been disappointingly slow. With clear threats being made to supply, I suggest that energy security and reducing our dependence on Russian and Russian influenced imports should become its main focus. Energy security, the very thing that ensures the continuity of our comfortable way of life, our productivity and creativity is under threat.  Never have we needed to ensure the ramping up of the Energy Transition as now.

Reducing our dependence

The UK imports just 3% of its gas requirements from Russia whilst Finland imports 99%, Estonia 77%, Germany 47% and France 24% (Source Spectator/ICIS). But should Russia slow supply or the West reduce demand then the demand for gas from other sources will increase and competition may lead to further strife. It is therefore important for each country and for Europe as a whole that we reduce our requirement for gas.

Many measures are actively under consideration: from recommissioning power stations, to increasing the installation of solar panels, to encouraging people to dress warmer and drive less.  In the words of Claude Turmes, Luxembourg’s energy minister at an online panel earlier this month “If you don’t want to act on going one degree lower for climate change, do it against Putin”.

But just how considered and how sustainable are these measures? They may well have an essential role to play in preparing for next winter, but we need to act coherently to make a lasting difference and not just give a boost to pollution and polluting businesses.

One of the biggest challenges is the engagement of consumers. Demand sits at the heart of the energy industry and often its importance is over-looked because, in general, the industry is set up to supply all that is needed in the cheapest manner. Decarbonisation is seen as expensive and inconvenient - it is hard to encourage consumers, both residential and commercial, to spend money and change their behaviour when they see little value in doing so. Consequently, it is the early adopters who can afford to be interested that are acting – and they are nowhere near enough in number to reduce our dependence on Russian energy.

This is one area in which The Traxis Group is working via its Traxis Energy arm, tackling the problem from the opposite end – the consumer. How can we make decarbonisation a valuable and attractive proposition for residential and commercial property consumers?

Landlords, property owners and developers all face a highly fragmented market from investment through to ISS (Installation, Service and Support) whereas for a hybrid car everything is integrated. There is still no such thing as a hybrid home. Traxis Energy, its Advisory Council and UK Affiliate Group are working to change this and have been developing a Residential Distributed Energy Asset Management (REDEAM) model which consolidates the lessons from multiple trials and pilots to generate a commercially viable business model that can be initiated now and scaled rapidly.  

Scaled rapidly? Referring to how quickly we were able to respond to the Covid pandemic has become a cliché but is nonetheless true. This crisis is as challenging to our way of living as Covid has been. The difference is that whilst the response to Covid has been at a massive economic cost, a rapid response to the energy crisis would be a sustainable and valuable economic gain.

This is something we can and must do. Consumer actions need to be front and centre in our response to this crisis. To take the Luxembourg’s energy minister’s quote and play with it: “If you don’t want to act for climate change, then do it to keep the lights on.”

Author: Simon Anderson