Looking back to look forward - Prof Jim Skea


Courtesy of Courtesy of Energy Institute (EI)

In 2014 we are celebrating the 100th anniversary of the founding of the oldest of the Energy Institute’s predecessor organisations, publishing interviews with eminent figures from the world of energy, reflecting on how the past can inform the future. This month, Professor Jim Skea CBE FEI.

From your own perspective, how would you characterise the key challenges facing the energy industry and society today?

The overarching challenge for energy globally is how to reconcile resource abundance with environmental constraints, particularly those associated with climate change. Arrays of technologies, renewable and non-renewable, current and prospective, are available to meet our energy needs. The challenge is an abundance of choice rather than lack of it.

The recent IPCC reports are unambiguous about human influence on the climate, the consequences of business-asusual for physical systems, ecological systems and infrastructure and the radical transformation of the energy sector needed if these impacts are to be avoided or reduced. Acting on that advice poses huge challenges. How should the costs be distributed? How can technology cooperation contribute? Should holders of devalued assets and stranded investments be compensated and, if so, how?

How do you think the industry can use past experiences to plot the future?

The most important lesson from history is that people seldom apply the lessons from history! And that’s a shame. I started in the energy sector at the height of the 1970s oil crises and I’ve personally learned quite a few lessons since then. Having been almost brainwashed into the notion that energy resources are finite and that, by the year 2000, scarcity would drive radical change in the energy, I am now much more persuaded about the capacity of human ingenuity to unlock new resources and, at the same time, the persistence of existing systems of energy supply.

The unique feature of the climate change challenge is that past developments in the energy sector provide little guidance as to how to proceed. The recent IPCC report demonstrates that historic trends need be broken if the UN objective, of keeping global temperature rise below 2°C, is to be met.

Technological transformations involving steam and the railways, oil and personal transport, and mobile communications took place when entrepreneurs figured out ways of meeting human wants and needs that had previously been unanticipated. Climate change is different. It’s about continuing to meet individual needs and wants while achieving a goal that is a common good. There isn’t really a precedent for that in the energy domain. Any lessons to be learnt are probably from other fields such as industrial safety and the 19th century Factory Acts, or even the abolition of slavery.

What do you think are the crucial factors to solving the energy trilemma of balancing supply security, affordability and sustainability?

These three terms are wonderfully ambiguous. Affordability is perhaps the easiest because we all have a notion of balancing the household budget or keeping down business costs. Security has several dimensions. We need to build enough infrastructure to ‘keep the lights on’. We also need to be aware of the geopolitical risks associated with energy supplies from vulnerable or unstable regions of the world.

We really need to be clear about what we mean by security. For me, it is too often conflated with reduced import dependence. This is wrong for two reasons. First, many of the events that have threatened UK energy security have been entirely home grown. Think about the miners’ strikes, the tanker drivers’ disputes or accidents at North Sea gas terminals. Second, trade and economic interdependence normally promote rather than inhibit wider international stability. Why should energy be different? Without being naive about the realities of global energy markets, the UK could gain a lot from improved gas and electricity connections to continental Europe, for example. It would certainly lower the cost of meeting other energy policy objectives.

Finally, sustainability is probably the most slippery term of all. It’s often used as code for lowering greenhouse gas emissions but, using the classic definition, it’s about balancing economic, social and environmental factors, a trilemma within a trilemma. Environmental factors themselves cover air quality, water, land use and biodiversity as well as climate change. The key challenge is to be clear what we are talking about and, while not losing sight of the big picture, break the problem down into manageable bits. And let’s not forget energy efficiency! However you look at it, efficiency addresses all elements of the energy trilemma, and even the trilemma within the trilemma. It’s the most cost-effective solution to almost any energy problem and it’s available in the short term.

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