How China can shape the future of energy

In the evolution of humanity, securing access to energy has been a critical enabler of development and improving quality of life. The possibility to have secure and sustained energy access has been the primary objective of people responsible for energy systems.

Beyond access, energy cost and affordability was the second element on the attention of the energy planners across the world and now, relatively recently in the context of history, environmental sustainability has created the third leg of what we call the energy triangle.

What an energy system has to deliver to society is, in fact, secure access to sustainable and affordable energy, and what binds together the three elements of the energy triangle is technology.

New technologies enable countries to reduce the amount of energy lost during transmission, intelligent distribution systems enable a more efficient calculation and use of energy supplies, and digital devices allow users to switch on and off devices at “just the right time”.

In the recent past, China has led the world in enabling energy access at a very fast pace to a very fast growing population. The relatively low price of oil makes the relative affordability an opportunity for investments, instead of a necessity, in a world where the focus on sustainability is becoming increasingly relevant.

China’s opportunity is to innovate on both technology and behaviour, bringing them together to boost the next phase of economic and social development. The key is to take advantage of current conditions for large-scale investments in technology focusing on innovation in sustainability. Today, China is the centre of world manufacturing, so could it lead to become the centre of economic, environmental and social innovation?

In the current context there are six critical factors that are affecting the energy system transformations:

  1. Modern technology can enable the decoupling of economic growth from energy consumption
  2. The digitization of the energy systems has become a reality
  3. Environmental consciousness is growing
  4. Renewable energy has reached the next level of maturity and has become mainstream in the energy portfolio
  5. Society is progressively more urbanized
  6. Global population is growing and the middle class is expanding and, with that, increasing demand for better quality of life and energy

The economic and digital revolution that we are going through is calling for a new economic and social system. For the reasons listed above – and more – we will need to create a society where the abundance of resources is not the name of the game but the abundance of data is. This will require a long-term vision and courage to take steps that may be costly in the short term but will allow long-term peaceful prosperity.

The investment decisions taken today in energy and infrastructure will have an impact on society in the next 15-25 years.

For energy in particular, the opportunity to innovate both in technology and behaviour will enable a better use of energy and a different way of conceiving energy.

A better use of energy leverages existing and new technologies to enable energy efficiency and conservation at scale. The peak of energy consumption can be reduced by intelligent use of data and adapting the behaviours to a new model that is not only centred on individual needs but also collective consciousness and optimization.

Technology can also render current energy transmission systems far more efficient. Energy lost in long transmission lines can be reduced thanks to new technologies and because energy production and consumption are closer through distributed energy.

A different way of conceiving energy looks at how and what to measure in terms of energy. Most energy systems focus on the supply side of the value chain, always ensuring sufficient energy, at any time, for peak needs, the critical factor being to deliver the number of electrons needed by the demand. Thanks to digitization, technology can now also bring the focus to the benefits that energy provides rather than electrons per se.

This is the great opportunity for China in a new era in which rapid technology innovation will have to be combined with a change in consumption behaviour to deliver a fair and better society for everyone. Can China innovate on both technology and behaviour, bringing them together to boost the next phase of economic and social development? Any change China makes will certainly have a global impact, and the right combination will place it in a leadership position.

The Annual Meeting of the New Champions 2015 is taking place in Dalian, China, from 9-11 September.

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This article was originally published in China Daily

Author: Roberto Bocca, Head of Energy Industries, Member of the Executive Committee

Image: Employees climb up an electricity pylon next to a windmill to carry on a routine inspection at a wind power plant in Mingguang, Anhui province July 8, 2013. REUTERS/China Daily

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