Investors in global markets will realize this, and they will evaluate the prospects for future economic growth accordingly. Normally, it takes decades to develop and introduce new technologies on a large scale, and investors will realize this, and this will likely lead to a financial crisis.

The only way to reduce the impact of such a crisis will be to develop large scale programs for the introduction of renewable fuels and technology and systems that reduce our dependence on oil for transportation. If we do this in a way that will convince investors there is a possibility that the financial crisis will only be temporary. In the absence of large scale efforts to reduce our dependence on oil, investors will see a very bleak future, and the value of stock markets and currencies is likely to plummet.

Governments need to act decisively in order to reduce the risk of this type of development.

Bookmark It

We now need to spend more time discussing the solution than the problem. The solution, however, does not lie in the realm of sustainability or pollution. The solution will be found in the systematic and large scale development and implementation of new clean technologies and renewable fuels. It is unlikely that the people who have become experts in areas related to sustainability, and who are now dominating this field, will be able to make the right decisions, or manage and finance the large scale energy systems transformation projects of the near future. From now on we need strong voices, rooted in the principles of business and management of technology at various levels that analyze, forge, and debate the principles that will guide Global Energy Transformation.

The energy transformation challenge is the biggest challenge that mankind is facing right now. We need increasing volumes of energy in order to fuel the global economy and facilitate economic growth and continued affluence on this planet. This issue has emerged over the past few years and it is clearly more pressing than the need to reduce pollution. This is because we will hardly be able to master the huge investments in the development and implementation of clean energy technologies without economic growth and an overall positive trend in the global marketplace.

Despite this extreme challenge we find that business development and technology management related to the energy transformation are given a back-ground position when the future of business and of our economy is discussed in the media. As an example the Swedish business weekly Veckans Affärer in issue no. four of 2011 has identified 101 young “super talents” in Swedish business. None of them apply their talents in the areas of energy technology management or in energy business. As number five on the list there is a young professor from the Royal Technical University (KTH) in Stockholm. She is portrayed with the quote “The dream is a home robot.” Number 20 produces women’s fashion the style of the classic Swedish “lovikavante,” a glove that has never been out of fashion, but never very fashionable either, and number 28 has started a company selling wigs. Number ten is Lena Bertling a professor at Chalmers Technical University, who is studying sustainable power systems. She is the only person profiled with a link to energy technology. Again, there are no super talents that are working with the immensely important management issues of transforming global energy systems on a large scale!

Starting in the next few years we will experience an annual decline in the oil supply of between one and three million barrels of oil per day, every year. We use, on a global scale, 86 million barrels of oil every day, and by 2015 it is possible that the volumes supplied have decreased to well below 80 barrels per day. A sustained small annual decline in the area of one per cent, representing close to one million barrels per day every year would be a rather pleasant surprise for the people who have studied Peak Oil. More likely we will need to increase production volumes of renewable fuels and reduce our dependence on energy by substantially more than one million barrels per day only to maintain our global economic activity at the present level. It is not that we need to abandon all hope of a good life in the future with household robots, wigs, breast implants, and silly reality shows. It is only that we need to understand that in order to maintain all these hopes and dreams we need to develop and implement huge volumes of renewable fuel technologies, and renewable fuels, in the near future. This, again, will be the big challenge for our business and technology management super talents in the years to come.

We need not only our young business talents, but business talents of all ages, to turn their attention to energy related issues. A positive signal, showing more insight into the developments on the global business scene than the article in Veckans Affärer, comes from President Obama. Last week he appointed Jeffrey Immelt, CEO of General Electric, to become his chief economic adviser after Paul Volcker. Mr. Immelt has been a strong advocate of the development of clean technology. During his time as CEO of GE he has started the project Ecomagination, which started by investing 400 million dollars annually in the development of green technologies, and accelerated this to an annual investment of 1 billion dollars. He has also, together with Microsoft founder Bill Gates, venture capitalist John Doerr, and a number of other high level managers of large US companies, started the organization American Energy Innovation Council (www.americanenergyinnovation.org). The appointment of Jeffrey Immelt indicates that energy transformation and green technology are high on the political agenda in the United States.

The list of super talents in Veckans Affärer indicates that someone, and probably a lot of people on the eastern shore of the Atlantic Ocean, have got their priorities badly wrong. Most worrying may not be the list itself, but rather the lack of reaction among the readers of Veckans Affärer, and among journalists and people who debate energy and sustainability issues that there is something deeply flawed in the way that the energy transformation is handled in our society at this important point in time. We need to put every effort into energy transformation, and yet we laud the opportunities of household robots, wigs, and fashion based on the ancient patterns of “lovikagloves.” Most of all, we need business people and experts in disciplines related to the management of technology to turn their attention to the management issues related to Global Energy Transformation.

Bookmark It

http://www.iea.org/speech/2010/tanaka/AustraliaTanakaWEO2010.pdf

This will change everything. And we are not prepared.

Bookmark It

We need to make people aware of the link between energy consumption and affluence. Economic growth can be questioned, but the universal wish of people to live reasonably comfortable and safe lives cannot.

With reducing volumes of oil both the comfort and safety of the present and future generations is at peril.

Decision makers and other people in high positions need to rapidly understand the links between energy supply, affluence, comfort and safety. We can have all of this with a decreasing supply of energy, but only if we manage the transformation.

Bookmark It

Around the year 2000 many companies had invested in new integrated business systems, but after the implementation of the systems they realized that the systems in themselves would not realize the savings potential or earn them more revenue. Instead, projects focused on change management efforts, directed at improving the work processes of the organizations, were necessary in order to realize the substantial improvement potentials. These projects required an entirely new cadre of professionals – change management consultants and managers with change management competence.

Up until then the IT-industry had been dominated by people with an IT-background. Now IT-consulting companies started to recruit people with a business background, who could understand how the complex IT-systems could be used in order to reduce cost and increase revenue. These people could also draw up project plans, and manage the six to twelve month projects that were necessary in order to realize the potential. Soon companies started to recruit management counterparts to these consultants to fill slots in the organization charts where a combination of business and IT competence was necessary.

Companies and research institutions have now developed new energy technologies for a few decades. This development has been driven by the need for new energy technologies, and the development of any energy technology with a savings potential or the potential to make use of renewable fuels has been funded. Now it is time to realize that we will never be able to realize the full potential of these technologies without the massive deployment of change management competence and resources. We have a large number of different technologies in development and in early stages of usage, but the amount of energy we receive, and the savings we generate, from such technologies are still minuscule. Many of them will not rapidly come to wide-spread use without focused energy transformation programmes that are aimed at energy or business sectors, or household users, in which technologies are combined with incentives for implementation, and managed change efforts.

In order to achieve this we need national strategies for energy transformation and also market driven development of integrated systems offerings to various customer categories. These two developments need to support one another.

Bookmark It

The process has be very interesting. What an effort by both GE and the entrants! Of course GETI entered by offering How to Smartly Deal With the Intermittent Nature of With Wind and Solar Power and Pilot Study –How Intelligent Systems Integrators Will Make the Grids Smart(er) for America and the World.

But this post is about the winners, and here they are with their $100,000 winning ideas. Congratulations, good luck and thanks for your contribution to smarter energy.

• Capstone Metering: Intelligent Water Meters – Carrollton, Texas: Capstone Metering applies remote communications technology to the century-old water meter. The company’s IntelliH2O is self-powered and delivers real-time water system management, which helps conserve water and eliminates the need for manual meter-readings (www.capstonemetering.com).
• ElectricRoute: Secure Communications Network for the Electric Grid, Salem and Hollis, New Hampshire: Recognizing the substation’s unique location in the electric grid, ElectricRoute created a communications gateway point for transmission and distribution systems. Its cyber-secure, communications network infrastructure eliminates duplicate sensors and thousands of copper lines running inside the substation.
• GridON: Controlling Power Quality in Electric Grids, Givatayim, Israel: – GridON created a fault-current-limiter to protect the electric grid from disruptions and power outages, increasing the grid’s reliability and enabling load growth and generation expansion from alternative energy sources. This technology was developed in collaboration with Bar-Ilan University and Ricor Ltd (www.gridonsystems.com).
• IceCode: Wind Turbine Blade Anti-Icing and De-Icing, West Lebanon, NH – Seeking to break one of nature’s strongest bonds, IceCode’s technology removes ice by using high-power pulses to apply heat from the inside out. Employing this technology for wind turbines substantially reduces the amount of energy used for de-icing and eliminates downtime for ice removal and inspection. Developed in collaboration with Dartmouth College (www.icecode.com).
• WinFlex: Inflatable Wind Turbines, Kiryat Yam, Israel: – WinFlex produces rotors for wind turbines from light, flexible and inexpensive cloth sheets made out of composite materials. This flexible rotor design reduces installation costs by at least fifty percent and shortens the return on investment to three-four years, without subsidies (www.winflex.co.il).

Bookmark It

Now cotton prices increase dramatically, and there seems to be little evidence from the clothing industry that customers switch their preferences to wool, linen, nylon, perlon, or other alternatives to cotton in order to buy as many garments as before. Instead companies in the clothing industry seem to fear that customers may decrease their purchases and try to absorb price increases as long as possible, which reduces their margins. One medium sized Swedish cloth producer has already gone bankrupt because of this development.

http://abcnews.go.com/Business/rising-cotton-prices/story?id=12120858&page=2

In the energy sector customers may not have specific preferences for particular energy sources, because of fashion or feel. Instead, demand is built into other structures that are more difficult to change, than consumer purchasing patterns in fashion, namely engine types and the need to travel to work, to travel to shopping malls, and to travel for other purposes.

Customers or producers of fuel cannot easily switch to other energy sources, because their cars run on gasoline, heating is set up with a gas boiler, etc. The only thing for many to do short term is to reduce travel, reduce heating, or reduce activity in other areas where energy is used, such as reduce consumption in order to afford to still take the car to work.

Energy systems are much more complex in terms of mutual dependencies than the system of clothes and cotton production. In order to be able to substantially reduce energy use in production and distribution systems companies need to make a large number of changes, that often need to be discussed and planned between companies, or managed at a higher level entirely. In order to introduce renewable fuels on a large scale we need vehicles, fuels, distribution systems for the fuels, including distribution technologies like pumps etc, which requires cooperation on a large scale.

The coordination of such changes does not happen automatically or by itself. We will need national strategies and large scale planned transformation programs

Bookmark It

Experience shows that this is very difficult. Almost regardless of the situation, people tend to hold each other back and make change difficult. This happens in companies when single employees have been to a training course and learned new things. Such new learnings seldom get applied because one individual is seldom able to get the colleagues to change, and in an organization, or in society, one individual cannot change anything without the consent of his or her peers.

The invisible fabric of organizations and society makes sure that things remain stable. No matter how logical the change, it will still be difficult to go through with if people in the environment want to remain the same. The only time when change is easy is when change is highly desirable for all, or most, of the members of a group, like when we have learned to increase our consumption as we have become more affluent over the past century.

The only way to drive successful change is to transform entire companies, societies or groups at the same time, providing information about the logic of change, and providing the means to change together with this information.

This is perhaps the most important reason why we will need to run large scale transformation projects in order to transform energy systems on a large scale. Regardless of if the people who need to change are purchasing managers who need to start to use new criteria for purchasing, politicians who need to weigh in factors such as the need to rapidly transform large parts of society toward a reduced need for energy and increase the use of renewable fuels, or if the group that needs to change consists of individuals who need to buy more energy efficient cars, appliances, or locally grown produce, these groups need information and support for the individuals to be able to change in the desired way.

Bookmark It

These people seem to have forgotten an important pre-requisite: In order to have more of the luxuries of today, that increasingly become the necessities of tomorrow, we need economic growth. And in order to achieve economic growth we need increasing volumes of energy, in particular oil, which is now approaching its global peak of production.

We will have to struggle to realize the vision of the theorists of the future with a decreasing supply of oil.

Bookmark It

http://www.peakoil.net/

The lack of arguments in favor of managed transformation programs is conspicuous. Several sources high-light the alarming consequences of Peak Oil and it’s getting increasingly clear that the market mechanisms will not suffice to drive large scale energy transformation forward at a high enough pace and with precision. We need managed transformation programs.

Bookmark It