VIEW THE 2011 CONFERENCE PROGRAMME HERE
OVERVIEW OF EFEF 2011
The idea storm
Inspiration – building the vision
The different discussions around climate change have shown the importance of new energy sources and the development of existing ones. The challenge of the coming years will be how to implement them and even more so to understand what will be the disruptive elements.
During the official opening of the EFEF 2011, Micheline Calmy-Rey, Swiss president, gave a speech about the challenges Switzerland is currently facing after its recent decision to pull out of nuclear energy. Dr. Sultan Al Jaber, CEO of Masdar, addressed in his opening speech that in the field of new energy, 'Progress is being made, but there is still much to do'. According to Morten Albaek, Senior Vice President of Group Marketing and Consumer Insight of Vestas Wind Energy, things are moving faster than we think in climate change, hence, 'We need an energy revolution rather than an evolution, simply because 7 billion people are in need of it'.
Bertrand Piccard, Project Initiator and Chairman of Solar Impulse, called upon individuals:
'Do not wait for the other to change something, go out and change something yourself'.
Innovation – changing the future
To develop an understanding about future evolutions of the energy landscape and to see where disruptive new technologies will change the competitive business environment, very innovative and cutting edge technologies and ideas were presented.
Policy & Regulation – building the framework
We all know that we will need to increase the use of new energies. But how do we meet targets for future energies without deteriorating the competitive environment for business, through regulations (stick) or through incentives (carrot)? Public private partnerships ('PPPs') are used as the answer to many problems, so are they in the field of new energy. But are PPPs hype or reality? How and where to better use PPPs in the renewable energy sector?
- PPPs are believed to be reality rather than hype: they are considered to be an efficient formula to overcome inefficiencies (funding, regulation) in the field of new energies, Yet, more focused actions are needed to increase credibility: collaboration is vital. Further, there is a need for a sustainable and predictable regulation framework
- However, to date, there is no general, globally accepted framework available to achieve energy targets (lack of uniformity in energy regulation). Further, governments often lack behind in creating effective and efficient funding and regulation mechanisms. For these mechanisms to be effective and efficient, governments have to take into account the principle of territoriality: local regulation can have a global impact
- It is commonly agreed that a distinction between sticks and carrots is too simplistic as there is a diversity of policy measures. Further, before one can speak of sticks and carrots, one should discuss removing obstacles as most countries are currently energy dependent. Finally, one cannot manage what one cannot measure.
During the debate, it is argued that new energies will trigger a paradigm shift in the energy market: from a centralised market system to a decentralised market system. Yet, some argue there is no new energy market as, in fact, there is no competition: new energies are highly subsidised. Walter Steinman, Director of the Swiss Federal Office of Energy, said in this regard that he has 'the feeling that Europe is not playing the game of building an integrated market for energy as they are not only subsidising new energy, but nuclear energy as well'.
Infrastructure – feeding the need
When starting to roll out renewable energy, we are often confronted with the challenge that this energy is not always available at the time we need it, or at the location we need it. This raises the question on what premises the infrastructure has to be build to assure efficient energy distribution and storage mechanisms. Further, we want to look at the changes the future energy will bring to cities and how urban development has to be rethought and redesigned to be ready to address the challenges of tomorrow.
- To provide new solutions and ideas stemming from future energies for the cities, we need standards, smart systems by design, more collaboration, and policy & ethics
- In doing so, software can make the difference. Yet, in order to grow, we need to leveraging information to make better decisions, anticipating problems to deal with them and coordinating resources to operate effectively, while being flexibility as well
- To create smart (liveable, efficient & sustainable) cities. we need a strong cooperation between people, public governance and business coalitions
Finance – assuring return on investment
We need to improve private and public funding for future energy solutions, but we still sometimes struggle to find the best funding structure for such projects. In spite of the fact that everybody is talking about Cleantech and regarding it as the business opportunity not to miss, one should wonder whether or not Cleantech is regarded as hype or megatrend. We want to better understand what kind of business models are successful in the area of future energies and what we can learn to learn to develop successfully business for green development.
- We need to find new investors to develop new energies. While new energy has a multifold return, debt leveraging is considered a problem. Investors tend to wait. Moreover, new energies are suffering form over-evaluation and too much enthusiasm. Finally, finance solutions have to be tailor-made
- Cleantech is considered hype rather than megatrend. There are many long term macro trends (population, GDP per capita), and many constraints (CO2, water), which are the drivers behind Cleantech. Future challenges are related to its deployment: managing social and political issues, venture capitalist issues and the issue of closing the knowledge gap to erase the market disruption it is currently triggering
- To make Cleantech a success we need renewable and efficient technology, an integration system as well as a market-adoption strategy and a facilitation framework (policy, financial, legal, etc.). Collaboration is the only way to deliver solutions to very complex issues in a timely matter. In creating the right business model, ownership models are considered to be crucial, finance-based business models key.
Future energy mix – a recipe for success
Renewable energies have increased very much in importance. Many different possibilities exist and it is clear that there is a need to match each user`s framework with the appropriate renewable energy. Solar is a crucial component of renewable energies, wind and hydro are becoming a crucial component of renewable energy. What are the opportunities and challenges with regard to these sources? Yet, beyond these sources, there are many other opportunities for renewable energy. Which one? What are its opportunities and challenges?
- To date, from an investor`s perspective, it is believed that there is an unsustainable demand for fossil fuel energies. Hence, there is a rising for spending new energy sources. It is expected that solar and (offshore) wind energy will have the highest annual growth rates, particularly in four growing markets: China, USA, Japan and India. Yet, the industry will face challenges with regard to technology: integration of wind energy into electrical grids) and (cost) competitiveness
- Today, there is only limited community engagement/local participation in decision making with regard to wind energy. To be able to lessen social conflict around wind farms for affected communities and better renewable energy transitions, one should create a place-change policy design through social mapping, collaborative 'partnership' public engagement, and institutional policy redesign
- Apart from poor community engagement at the front end, there is a lack of community embedment and a mismatch or disconnection of on the one hand communities, who focus on process, and on the other hand developers, who focus on outcome. Developers should refocus on process, local authorities need to prepare to the ground better through initial and inclusive public consultations through partnerships
The wrap up
In light of the above, in order to meet future energy challenges we need to:
- Transmit the new energy mission through speeding up its process, scaling up its production to lower costs, and creating awareness and knowledge amongst people to change their mindset and behaviour
- Bridge the gap between aspirations (71% of people want more use of renewable energy) and solutions: we need to inform and involve people better: engage society
- Govern in order to create a stable and predictable new energy regulation framework to facilitate investors to take risks. Yet, one size does not fit all
- Build more partnerships through creating a holistic approach and integrate new energy solutions. Collaboration is vital in this respect
Inspiration – building the vision
During the closing plenary, Juan Araluce y Martinez de Azagra, President of Vestas Mediterranean, presented six recommendations to speed up the new energy process: 'Start considering the cost of all externalities, allow free trading of goods and services, improve R&D expenditure, eliminate fossil fuel subsidies, implement stable and predictable new renewable policies, continue the debate with society'. Professor Steven Griffiths, Executive Director of the Office of Institute Initiatives of the Masdar Institute of Science and Technology, argued that 'strategy and context should come together in the deployment of new energy'.
The presentations are available for participants. They published on the EFEF 2011 website: