While the global economy uses huge volumes of oil every year we are currently working on small-scale projects to develop renewable fuels and transport systems based on those. Instead we need to develop strategies and plans for the large-scale implementation of new systems. The new systems need to be competitive with existing petroleum based systems at a very early stage. This is because large shares of vehicle buyers need to be able to invest in vehicles for renewable fuels or electricity in order to minimize the volume of subsidies that need to go into the transformation.

Investment volumes will be huge anyway and there will in any large country exist an opportunity to save tens of billions of dollars or euros in terms of investments by choosing capital- and cost-effective systems structures and technology solutions.

We need to start to view future fuels and transportation systems from the point of view of systems efficiency, and this needs to include energy efficiency, capital efficiency and cost efficiency.

We need to build competence in society around these matters. We need organized analysis capacity and decision making power. In my new book I use the concept of “orgware” to describe these analysis and decision making resources. At present in renewable fuels areas we have plenty of technical orgware, but we need to develop market, financial and political orgware in order to handle the business development and large-scale investment aspects of the transformation.

The book “The Business of Global Energy Transformation” will be published by Palgrave Macmillan in September of 2012.

I strongly believe that everything we do in this area will become scrutinized by posterity. Let’s now join forces and get the transformation on track towards large-scale goals!

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There is also the need, in some cases, such as in the case of electric vehicles and gas vehicles, to build new infrastructures for charging or for the distribution of gas to vehicle owners through gas filling stations.

With the use of plug-in hybrids there is no such need. Vehicle owners can charge at home and at work, and use petrol and diesel to get unlimited mobility. The later alternative is straight-forward from a business perspective. Vehicle owners use existing electricity and petrol and diesel distribution infrastructures. In the case of electric vehicles large and risky investments need to be made in complex systems and infrastructures.

In the new book I analyze these different alternatives from a business and financing point of view. The book will be published later this year by Palgrave Macmillan in the US and the UK.

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http://www.bbc.co.uk/news/world-europe-15134136

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Cheap energy is the basis for our affluence. Without it we could not produce large volumes of products and services and transport goods and people to customers on a large scale.

Like in ancient societies when donkeys and horses carried grain to markets they had to eat of the grain on the trip, and if the market was far away the load may only have been three thirds the size when the farmer arrived to the market and he had to save some grain for the journey home and only sell part of the remaining volume.

With a society that has become used to cheap energy we need to develop new cheap energy sources to maintain our affluence.

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Currently only about one per cent of our fuels for transportation come from renewable sources. We use 86 million barrels of oil every DAY and we have passed the global peak in oil production.

Still people, regardless of political back-ground, training, or other social and individual characteristics, act as if our future is not worth fighting for. The problem will not go away if we ignore it. It will only get worse the later we start to act to transform energy related systems on a large scale.

Who can we blame when the economy starts to decline due to decreasing supplies of energy? At that point we will need several years of struggle to develop the renewable fuels systems that we will desperately need, and this will have to be done in a very hostile economic environment.

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We are increasingly falling behind and even people who understand this usually do not understand that we can do something about it. We need to drive energy systems transformation in a planned and managed fashion. This is the only possible and economically efficient way.

The big problem is the global peak in oil production, “Peak Oil,” which threatens our economy and our whole way of life.

Doing nothing to inform decision makers about the need to develop strategies and plans to coordinate change efforts is not a good alternative. We need to start to debate the need for change, and which activities we need to initiate short term. One of the first needs to be the development of strategies and plans to drive change forward.

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- It seems as if people primarily learn collectively. Informing single individuals about Peak Oil or climate change and the need to reduce our dependence on oil is not likely to make them change. It is not until we start to debate the need for large scale energy systems transformation that people feel the urgency to change.

- Even if we know that we need to change in principle we may not know which exact details in our lives we can change. Telling people we need to change will not create a result. We need together to work out exactly what we can do differently, and start with the things that really matter. Most important at present is to contribute to systems change. Reducing your own oil use will have little effect, but getting one hundred or one thousand people to change theirs in a productive way is also likely to start a snow-ball effect.

- The capacity of existing systems based on renewable fuels or electric cars etc is often very limited. We need to expand these systems and make them easy to use and increasingly attractive. This can be done either incrementally by reacting to market signals, or it may be done based on national or regional strategies to transform energy systems on a large scale. The market based alternative is likely to be slow and costly, because investments in systems expansion need to be coordinated between several players. Even if we believe that market based action is more efficient, it is not the case in this case. Having too little fuel for transportation, due to “Peak Oil” is likely to lead to recession and depression that most people are likely to consider to be more costly than to invest in systems for renewable fuels and electric vehicles to avoid a large scale economic crash.

We need to drive change by developing strategies and plans for large scale energy systems transformation. Individual action will come too late and be insufficient from a number of perspectives.

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There is a need for large-scale investments in order to accelerate Global Energy Transformation and replace oil and old technologies on a large scale. This will require the dedication of large financial resources by large companies and governments.

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In the case of renewable fuels and electric cars this situation will change. We use, on a global scale, 86 million barrels of oil every day and the systems and business challenges, as well as the technical challenges of replacing a large share of this volume by renewable fuels and electric vehicles will demand levels of transformation that we have not experienced up until now.

For instance, garbage and biological waste are resources that we will need to use much more efficiently than we do at present. People from countries all over the world visit Sweden and other European countries and are told about our well organized systems of waste management, where waste is sorted into different fractions and recycled or burned to produce heat that is distributed to companies and households via district heating systems. Many people from the large number of companies that lack such systems think that the use of waste to heat buildings is a very good idea, but often the question is asked: “Where do you get the garbage?” The systems we have developed for waste management are very intricate and in countries where we have them we think of them as a natural part of modern society. In countries where they don’t have them they will need to build these systems from the ground up, creating new companies and entire sectors of society and the economy in the process. Of course the waste management companies will need suppliers of vehicles, district heating equipment and other necessities. Some of these things, at least initially will have to be imported, but some need to be supplied locally.

In the same way the large scale production and use of biogas will require an entirely new business sector that produces huge volumes of biogas every year. In no country there is such a system in existence. In the small country of Sweden with 9 million people we use 200 terrawatthours of oil every year for transportation. We produce 1.5 TWh of biogas, and most of this is used for district heating. In order to dramatically increase the volumes of biogas for transportation we would need huge production plants for biogas that produce 300 to 500 GWh per year. Even with this size of plants we would need 400 units of 500 GWh plants to replace oil in the transportation sector. In the entire Swedish agricultural sector there is an estimated 34 TWh of biological waste available that can be used for biogas production. In order to introduce biogas on a large scale we need a number of new types of businesses that together will make up an entirely new biogas sector in society and the economy:

- Collection of biomass, including the technologies that are necessary to harvest biomass at farms, sea and in the forest on a large scale.
- Transportation of biomass to plants.
- Transportation of waste from biogas production back to farms as fertilizer.
- A closely knit distribution network for biogas from production to customers.
- Suppliers of technology and other necessities to all these sectors.

In the same way, in the electric vehicle sector we will need large numbers of entirely new companies, to some extent similar to the mobile phone industry of today. Among the new companies needed we will find electric vehicle systems operators, hardware and software suppliers to such systems (exist already to a large extent, but are at present focused on ICT).

These sectors will gradually grow in numbers and volumes, and we need to start build them by investing large amounts of money in creating this growth. With increasing numbers of people who are becoming aware of the need to implement renewable fuels on a large scale to replace oil we should start to debate how this can be done in the most efficient way.

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Similarly, in order to implement new energy technology on a large scale in a country the same set of key factors seem to be relevant:

- Hardware
- Software
- “Orgware”

While the first is relatively self-explanatory, the term software refers to computer programmes, but also to competence and other factors that need to be available in the organization. “Orgware” represents the institutional factors in society, on the national, regional, or local level that need to be in place for technology transfer or the implementation of new technologies.

In many energy areas transformation will to a large extent be a matter of building infrastructure across municipalities, regions or countries.

In the discussion of energy transformation we can learn many things by taking into account our experiences, as individuals, of using infrastructure in other areas, such as electricity, trains, or mobile phones. When we bring electric equipment to other countries we need to make sure that our plugs are compatible with the sockets used in the country of destination. When we use our mobile phones we need not only to make sure that our phones work in the other country, but we also need to gather some information about the tariff systems used for roaming, in order to make sure that we will not be charged an exorbitant amount for a call or for using the Internet. When we travel by train across Europe we may wonder why it takes so long to build pan-European high-speed train networks. Issues related to control systems that are not compatible between countries form part of the explanation.

When we discuss the construction or expansion of energy related systems there are issues of the same type that need to be dealt with on the local, regional, or national levels. The levels that are relevant depend on the type of system we have in mind, and the need to connect (now or in the future) local or regional systems to national or international networks.

District heating systems are largely local or regional. These systems do not need to be connected across large areas which makes transfer, expansion, or improvements somewhat less complex than in several other energy related cases. In the case of district heating there is a need for national legislation that creates equal opportunities for district heating compared to other alternatives, and that forms a basis for market based competition. This includes the possibility to charge relevant and competitive amounts of money for the various services provided, and to develop new services that can be paid for separately by the customers who use them, or provided for free in case this is relevant from a business perspective. There needs to be a high enough level of interest, attention, and competence among key decision makers in municipalities, regions, and district heating companies, in order to evaluate alternatives, and make decisions. There also needs to be a regular, and reliable supply of fuels to incinerate or burn. In addition to these factors there is a need for financing of the relatively large investments that will be necessary, but in the case of district heating these systems can be expanded incrementally. There is little need to offer all households or commercial users across a city, identical offerings at the same time. The adoption of new technologies in district heating can be gradual and un-even.

In the case of transportation fuels the situation is different.

There is an opportunity to start implementation of bio-fuels or electric vehicles in regional systems on a small scale, but sooner or later further expansion will demand regional, national, or international systems coverage. This means that the expansion of biogas, or electric vehicle systems will benefit from strategies and coordination on a national, or supra-national level even at a very early point in the expansion.

In the case of biogas large scale expansion, even in a small country like Sweden, which uses only 200 TWh of oil for transportation per year, this translates to 165 000 barrels of oil every day. In order to significantly expand the use of biogas as a transportation fuel we would need quite large volumes of biomass to use as substrate on a regular basis. It has been calculated that Swedish agriculture could supply 34 TWh of biomass from waste products every year, but these would then have to be harvested, and transported to production sites.

There is also a need for both hardware and systems for the distribution and logistics of the finished product, biogas, to biogas stations, that are now few and far between, compared to petrol stations.

Unlike district heating, the expansion of renewable fuel systems needs to be coordinated across regions, so that the supply of renewable fuels, or the charging opportunities for electric vehicles, can be relied upon by travelers. Otherwise vehicles need to be equipped with multiple-fuel technology, which is often the case at present. The ambition to transform energy systems on a large scale, however, will in itself demand wide-spread distribution of renewable fuels in a country, so even if vehicles can use multiple fuels, the need to sell large volumes will demand a certain degree of geographical coverage of distribution, and large scale production will demand a geographically wide-spread production system, and supply of biomass as well.

The aspect of “orgware” of energy systems that is most difficult to grasp, is probably the link between large scale supply of energy and our local, regional, and global, economic activities.

This link is unfortunate, and a sound and level-headed analysis is sometimes made more difficult by the political dimensions of the issue. Arguments range from “We will need to give up the global economy in the future anyway, so we do not need to take global economic aspects into account. The sooner we are made to realize this, the better.” to the view that “The market forces will always bring forward new and creative solutions to any problem, regardless of the magnitude, and we only need to wait for energy prices to get high enough for this to happen.”

Both these views are highly simplified. We are dependent on economic systems to produce the financial resources that we need to go through with the very large investments that will become necessary in order to build the renewable energy infrastructure that we will need in the future. Previous attempts to transform national economies to radically new systems have failed due to the lack of understanding among reformers of the intricate, and invisible, and sometimes highly abstract, linkages that are present in modern economies. We will need to reform both economies and energy systems, but we need to do this based on sound analysis of the opportunities, and possible pit-falls.

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