Franco Albi is a director at an energy utility in the west. He has over 25 years of experience in the energy industry with increasing responsibility spanning engineering to corporate strategy. He has written this article in his personal capacity.
Our Energy Transition Paradox – The Challenges of Leading for Systemic Change in an Execution Environment
Knowledge is powerful. It can both propel society forward and hold it back. This paradox is strikingly present in the ongoing transformation in how we power our society.
Increasingly intense and frequent weather events remind us of the existential risk of unabated climate change. Yet, our resolve in addressing this risk is challenged by other risks such as those related to unproven technological solutions and the costs to bring them to fruition. Both types of risk are real at the same time, a paradox which raises the questions, “How do we navigate short-term risk in a way that also addresses long-term risk.” And, “How do we create systemic change in an execution environment?”
The shift towards electrification to support decarbonization has been underway for decades, with many factors contributing to the pace of progress. It’s ironic that climate change wasn’t even the initial catalyst for the transition to clean energy; it was the economics of the execution environment of the 1970s, and economics is often cited as a reason to slow the clean energy transition today.
In the 70s, the rapid increase in the cost of oil resulting from the embargo imposed by the Organization of Petroleum Exporting Countries (OPEC) accelerated several countries’ exploration of alternative ways to supply energy. The United States increased focus on its energy independence, created the Strategic Petroleum Reserve, and accelerated research and development on energy efficiency and renewable energy.1 Denmark, today a leader in clean energy, applied their expertise in shipbuilding and mechanical engineering to develop and expand the use of wind power in response to the embargo.2 These responses to factors in the execution environment both propelled and hindered the systemic change needed to advance our clean energy future today. Both the availability of wind and solar technology at scale today, and the continued reliance on fossil fuels, are due to decisions made in the 1970s in response to the oil embargo.
We face many analogous challenges today. The way we respond to changes in the execution environment will be fateful for the future of wider systems that affect all of life. Today, one cannot address any major topic without attending to the impact of Artificial Intelligence. The exponential growth in the capability of large language models is undeniable. The potential for AI to enable and accelerate innovation is hard to contextualize, but the effect on energy consumption can be calculated. A single ChatGPT query requires ten times the energy of a traditional Google search (2.9 watt-hours of electricity for ChatGPT, compared with 0.3 watt-hours for a Google search3). This comparison not only shows the potential increase in energy demand, but it also brings to light what is driving the demand. It is not large data centers or big manufacturing companies; it is us. With every search, post, and reaction, we are using the internet to learn from and influence each other, and driving the increase in energy demand. Decisions we make in response to this demand will have a significant impact on the pace of our clean energy transition, the results of which will only be measurable in hindsight.
This paradox – how our decisions today both propel and hinder advancement tomorrow – highlights the importance of leadership. Leadership requires maintaining clarity of purpose. Advancing society through the transition to clean energy presents opportunities for economic revitalization and job creation in new sectors, but it also poses risks of job losses and displacement for sectors that have been around for over 100 years. In navigating these challenges, considering the systemic changes we want while making decisions in our execution environment is vital.
The path on which our knowledge takes us is carved through time by many seemingly independent decisions. The path is complex and fraught with uncertainties, but the imperative to act is clear. By embracing the reality that individual decisions we make every day influence the long-term changes we want, we can accelerate the transformation of our energy systems toward the clean energy future. Leaders that act with purposeful intention while navigating the duality and complexity required to make systemic change in an execution environment will amplify progress.
Knowledge is powerful, but it is not static. To advance society, we must increase the power of knowledge through continuous learning. In doing so, we will be able to look back at our results and say, “That’s how we create systemic change in an execution environment!”
1. https://history.state.gov/milestones/1969-1976/oil-embargo
2.https://unfccc.int/ttclear/misc_/StaticFiles/gnwoerk_static/TEC_NSI/63eb6ced5b1e43429a6eccdef95ff61e/85bd141304c5486fb7f2ef71f8d2d45f.pdf
3. https://www.goldmansachs.com/insights/articles/AI-poised-to-drive-160-increase-in-power-demand
