Energy security doesn't have to cost us the planet

The era of abundant and affordable energy is over, and energy security is quickly becoming a concern for people and governments everywhere.

The shocks of the COVID-19 pandemic, paired with the war in Ukraine and escalating climate change, have rattled the global energy system.

The need to transition to clean, reliable and climate-neutral energy sources further complicates this challenge — it is simply not good enough to dig more coal or burn more natural gas; we must find a way to deliver energy security without endangering the planet and those that live on it.

While difficult, this challenge is surmountable. Already, promising technologies have emerged that, when combined with a degree of behaviour change and smart regulation, could deliver us energy security for the long term.

Clean hydrogen, for example, could replace many of the polluting fuels that we use today and that leave such damage in their wake when burned on a global industrial scale. The cost of renewable energy like solar and wind is rapidly dropping, increasingly competing on price with legacy fossil fuels.

Currently, none of these technologies alone are equipped to bridge the vast (and growing) global gap between the sky-high demand for energy and the underwhelming supply.

A transition at this scale cannot be completed by any one government or sector alone, and so public-private partnerships are key in delivering change at the rapid pace required.

The Forum spoke with 6 leaders from the private and public sectors on how they view the energy transition, and how to meet skyrocketing demand for energy without accelerating climate change.

Roberto Bocca, Head of Energy and Materials, Member of the Executive Committee, World Economic Forum

Energy is the lifeblood of an economy. Everything moves and everything is transmitted thanks to energy. We remember the importance of energy when we have a scarcity of it.

An energy crisis is an opportunity to make a step change — but we shouldn’t be complacent. There is no time to lose. The energy transition does need to be accelerated.

We need to understand that energy is not only about supply ... how we address efficiency and the demand side is really critical to the energy transition.

The good news at the moment is that we understand the problem, and we have great minds and a lot of available capital.

Anna Borg, President and Chief Executive Officer, Vattenfall

We cannot afford to exclude any fossil-free technologies, given the magnitude of the challenge.

Short to mid-term, the technologies are wind and solar, but mid-term I think that nuclear is an excellent solution to bridge the gap between supply and demand, especially with the help of small modular reactors.

It’s about making sure that we actually make a reality out of the technology, and the knowledge and the capital that is there to run it — and we need to increase the pace, now.

Andrew Forrest, Founder and Chairman, Fortescue Metals Group

We have the technology right now to produce way more energy than this world will ever need, to bring the cost of energy down, and the supply of energy up. We simply need the leadership.

Greater than technological advance is the advance of leadership. The energy transition is the economic opportunity of today, and we need leadership to grasp this. We need leadership to stop thinking in their standard, rear-vision way of managing.

Leila Benali, Minister of Energy Transition and Sustainable Development, Ministry of Energy, Government of Morocco

This trilemma that we all have in our minds — sustainability, security and affordability of energy — is something that became quite alive this year.

In the 21st century, particularly in Africa, the infrastructure game is the one that has to be won. We have 600 million people in Africa who do not have access to electricity or modern forms of energy. In the $3.4 trillion investment gap to finance the climate challenge, we need more than $100 billion to fund the infrastructure gap in Africa alone.

Closing the gap between the funding and the investment opportunities is quite important.

Conrad Keijzer, Chief Executive Officer, Clariant AG

What is very critical in the chemical industry is that we work together. So, if you want to decarbonise a complete value chain, it’s very hard for one player in the industry to do that alone.

I’m optimistic because I see that the technology solutions are there. What we do need to recognise is that a lot of these come at a cost premium. Climate change is happening. Fighting climate change is a necessity, so we basically have to make it happen.

Fatih Birol, Executive Director, International Energy Agency

Our world has never ever witnessed an energy crisis of this depth and of this complexity.

What we are seeing today is that the current global energy crisis is an accelerator for clean energy transitions. In the past, these green energy technologies were driven mainly because of climate change reasons — now energy security is a very important driver.

The first thing investors look at is whether or not they get enough returns, and whether or not they have predictability of the projects. So governments need to make the necessary arrangements so that investing in clean energy is a predictable business, and at the same time, it provides lucrative returns.