The Energy Transition: how can we accelerate it?

The Energy Transition: how can we accelerate it?

Groningen 10 December 2013

Prof.dr.ir. Jan Rotmans

www.twitter.com/janrotmans

we do not live in an era of change

but in a change of eras

Crisis from transition perspective

Current crisis is a systems crisis

financial crisis is a symptom of systems crisis

energy crisis and climate crisis yet to come

systems crisis is deeply rooted in

production & consumption exhaustion of natural resources

only transformative change will help

Concatenation of Crises

till 2020: financial-economic crisis

after 2020: ecological crises

resources & materials

energy

climate

Raw Materials Crisis

era of easily exploitable raw metrials is over

17 critical earth metals are getting scarcescandium, neodymium, dysprosium, gadolinium, lanthanum

wind mills, electric cars, smartphones, solar cels

expected growth of these earth metals is > 1000%

97% of these critical metals is in the hands of China

the real crisis is yet to come

that is a blessing in disguise

Blessing in Disguise

back to the core in an innovative manner

new sobriety

eruption of creativity and innovation

human scale

Society is at Tipping Point

Tipping Point

period during which many changes take place

is rare in modern human history

example: end of 19th century

modernisation process: basis for Europe

education, health care, voting right, social structures

Indications of a Tipping Point

unheimisch feeling no clear direction

chaos & instability

bottom-up revolution new power emerging

conflicts between existing and new order

20 - 30 years

Throughdevelopment phasePredevelopment phase

20 – 30 years

Transition to Society 3.0

New paradigm”

New institutions

New companies

Tipp

ing

Poin

t

Old paradigm

Old institutions

Old companies

Time

We are here

Consolidatiion

Society 3.0

do it ourselves society

bottom-up society

participation society

citizen power social do-it-self

Tipping Point Phaseenergy companies in trouble

home care organizations in trouble

welfare organizations in trouble

building companies in trouble

housing corporations in trouble

“ speed by which Europe builds windmill parks

& solar panels needs to be slowed down. The

situation is untenable. It kills our business ”

Gérard Mestrallet, CEO GDF/Suez

Paradigm Shift

old worldview new worldview

exploitation model co-operation model

economic profit societal profit

linear processes circular

deriving values creating values

individual-driven community-driven

Shift in Values

Old Values New Values

effectiveness attention / time

efficiency trust

control, maintenance space

rules & laws choice of freedom

quantity quality

Evolutionary Revolution

silos are broken down

new institutions arise

people break through structures

Creeping Revolution

numerous entrepreneurs break through the systems

break through existing order: burglars in common order

‘do it themselves’ in collective (digital) networks

bottom-up movement from passion and inspiration

glocalisation

Where are these changes visible?energy

from central, fossil to decentralized clean

construction from supply & product to demand & service

health care from effective & efficient to human-oriented

food from global, industrialized to regional, sustainable

humans central

Transition

Transition fundamental change of structure, culture and practices in societal (sub)system

– structure: physical infrastructure, economic infrastructure (market, consumption, production), institutions (rules, regulations,

actors)

– culture: collective set of values, norms, perspectives, paradigms

– practices: routines, behaviour, ways of handling, at the individual level

incumbent structure, culture and practices need to bebroken down and new ones need to be built up

Transition is Evolutionary Revolution

evolutionary

old institutions die out, new institutions arise

labor unions, political parties versus communities and cooperations

revolutionary

process of radical, irreversible societal change

society 3.0 will become radically different: glocal, bottom-up, decentralized

Decay & Build-up

Transition = Power Shift

regime: dominant structure, culture and practices with power and vested interests

niche: emerging, divergent structure, culture and practices at a small scale level

niche wants to develop power and take over incumbent regime regime protects itself against this through absorption, assimilation or elimination of niches

transition = regime-change = power shift

Transition = Battlefield

evolutionary revolution

3 out of 5 companies will die out

not the biggest but the most adaptive will survive

Transition Management

Transition Approach

provide incentives for radical innovation

create innovation spaces for radical innovation

bring together frontrunners in innovation spaces

start portfolio of transition experiments

Transition Management Cycle

vision, pathways,transition agenda

transition arena

transition experiments

evaluation, monitoring learning

Transition Arena- long term- front runners- system innovation- problem / goal seraching

Different Arenas

Political Arena- short / medium term- peloton - incremental changes - problem- and goal oriented

Market Arena- short term- efficiency- profit / growth

Transition Arena

– protected but not closed innovation network

– majority is niche players, minority is regime players

– dynamic learning network with temporary status

– 10-15 participants, frontrunners

– from society, business, government, science, NGOs

facilitating

- creating radical innovation spaces

- removing barriers

- forming coalitions around frontrunners

- stimulating financial arrangements

Transition Policy

challenge market, mobilize society

phase 1 searching, learning, experimenting

phase 2 selecting, scaling up

phase 3 integrating in primary policy process

frontrunners

Transition Policy

Transition to Green Economy

Green Economy

1. clean and safeclean production of goods, materials and energy

2. circularwaste is resource for new products: closing

loops

3. bio-basedgreen resources as basis: plants and rest

products

global economy around ‘clean tech industry’

fastest growing industry in the world

2012: 300 billion dollar (30% growth t.o.v. 2011)

China 60 billion Germany 45 billionAmerica 40 billionItaly 17 billion

Netherlands 2.5 billion

Green Economy is ‘booming’

Clean Energy Technology growth rates per country

green economy of crucial importance for Europein potency 22 million Europeans involved

in 2013: 2-4% of total employment

in 2020: 5-10% of total employment

Germany is the frontrunner

Denmark performs well

England is improving

Netherlands is starting up and underachieving

Green Economy in Europe

Green Economy = ca. 4% of Total Economy (GDP)

Clean Tech = ca. 2% of Total Economy (GDP)

by now 2-4% of total economy

in 2025 11 - 21% at 15% growth per year

in 2030 22 - 43% at 15% growth per year

Green Economy in the Netherlands

Energy Transition

Global Energy Supply Systemecological

– harmful emissions for humans and nature – contributes substantially to climate change

economic– dependent on politically/economically instable countries– vulnerable to disturbance of energy supply

social– affordability for households / companies under pressure– 2 billion people have no access to modern energy

current global energy supply is not sustainable

Global Energy Dynamics

abundance of fossil fuels

– shale gas and unconventional oil in the United States – surplus of cheap coal to Europe

huge CO2-emissons and environmental pollution

emergence of clean tech

– China is the big motor behind ‘clean tech’– China plays double role, big investments in fossil fuels

still small, but fastly growing

Global Energy Transition

is at a Tipping Point period

huge dynamics, instability and turbulence

battle between vested and emerging power

battlefield

Tipping Point Indications

3 years ago: nuclear renaissance by now: nuclear pathwork

5 years ago: US largest importer of gas by now: US exporter of gas to Europe

4 years ago: price of solar panels high by now: price of solar panels 60% lower

Global Energy Power Struggle

Obama

“ The country that will dominate the clean tech economy

will be the country that will dominate the world economy

and America needs to be that country ”

Global Energy Transition

not driven by scarcity, climate, environment

but driven by geo-political forces

power shift arguments

price developments

no vision and no strategy

other global world power blocks are pro-active

Europe is not on a route to energy-autonomy

Europe does not have a clear strategy

Germany is the absolute frontrunner in clean energy

influences the energy price in other countries

more and more big power plants are closed

big European energy companies will die out

Europe is divided

Energytransition /

Energiewende

Figures & Trends

Energymix Germany versus Netherlands

Germany Netherlands

coal 25% 7%

oil 34% 56%

gas 21% 32%

nuclear 8% 1%

sustainable 12% 4%

Electricity Germany versus Netherlands

Germany Netherlands

sustainable electricity 25% 10%

biomass 33% 60%

wind 40% 40%

solar 26% 0.1%

Speed of Sustainable EnergyGermany

2003 - 10% sustainable electricity

2013 - 25% sustainable electricity

2020 - 35% sustainable electricity ?

Netherlands

2003 - 4.5 % sustainable electricity

2013 - 10 % sustainable electricity

2020 - 40 % sustainable electricity ?

Energy Price Germany versus Netherlands

Germany Netherlands

elektricity 30 cent /KwH 23 cent / KwH

15 cent stroomprijs 7 cent stroomprijs

8 cent BTW 3.5 cent BTW

6 cent ECO-toeslag 12 cent belasting

0.4 cent financiering

nieuw energienet

Financing Energiewende

small end users finance the energiewende

for the big companies

Story behind Figures

History Energiewende

1970-1980 broad green social movement

1980-2000 green government coalitions

1998-2001 fiscal greening: feed-in tariff

2011 Fukushima: political wende

History Energy transition

1970-1980 broad environmental consciousness

1980-2000 environmental policy

2000-2010 project energy transition

2013 National Energy Agreement

Essential Difference

Germany

first social movement, then policy/politics

Netherlands

first policy, then broader movement

Energy Transition partly failed

– in 2001 start by the ministry of economic affairs

– started with a small group, develops into a large network

– long-term vision developed [‘where do we want to go?’]

– 7 main themes selected [platforms or arenas]

– 26 transition pathways designed [‘how from here to there?’]

– 600 transition experiments [‘implement pathways?’]

Vernieuwende energie- en technologiebedrijven en onderzoeksinstituten

6 ministeriesInvloedrijke personenuit de energiesector

(Ministerie van EZ)

SENTER NOVEM

TRANSITION-PROJECTS

Platform-secretarissen

Regie-orgaanEnergietransitie(vh taskforce)

PLATFORMDUURZAMEMOBILITEIT

UKR-ondersteuning

Koplopersloket

PLATFORMGROENEGR.STOFFEN

PLATFORMKETEN-EFFIICENCY

PLATFORMDUURZAMEELEKTRIC.

PLATFORMGEBOUWDEOMGEVING

PLATFORMNIEUW GAS

26 26 TransitionTransition-paths-paths

11 Long term Long term visionvision

600600TransitionTransitionexperimensexperimens

PLATFORMKAS ALSE.BRON

IPE Onder-steunendestaf

“6 DG”overleg

InterdepartementaleProgrammadirectieEnergietransitie

Energy Transition

77 TransitionTransition themesthemes

What has been achieved?

• new discourse from a broad energy innovation network

• high ambition level related to a long term goal

• shared future perspective from a longer term orientation

• financial impulse via innovation agenda rooted in regime • portfolio of transition experiments

unique policy experiment

Organizations involved per platform

0%

20%

40%

60%

80%

100%

Duurz

ame

elektr

icite

it

Duurz

ame

mob

iliteit

Gebou

wde o

mge

ving

Groen

e gr

onds

toffe

n

Keten

effic

iency

Nieuw g

as

Taskfo

rce

(exc

l plat

f. vz

)

Geen gevestigde,belangrijke speler

Gevestigde,belangrijke speler inandere sector

Gevestigde,belangrijke speler inenergiesector

Organizations involved in Energy Transition

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Experimenten Platform Taskforce (exclplatf. vz)

Grand Total

Geen gevestigde,belangrijke speler

Gevestigde,belangrijke speler inandere sector

Gevestigde,belangrijke speler inenergiesector

Woning-corporatiesen middel-grotegemeenten

Dutch Inertia

1.fossil energy is in our genes [DNA]

2.power of the energy regime

3.over regulation and bureaucracy

4.failing sustainable innovation policy

5.lack of political leadership

German Speed

1.energiewende rooted in years 70-80

2.powerful movement from bottom-up

3.‘feed-in’ tariff introduction

4.political inlfuence of the ‘Grünen’

5.political leadership: Hermann Scheer

Consequences for Germanyviolent battle and clash of interests

chaos and turbulence and protest

panic among big energy companies

chance on instabilities and ‘fall-outs’

spectacular break through of sustainable energy

build-up of green economy [400.000 jobs]

Consequences for the Netherlandsharmony and consensus

poldermodel with compromises

energy-intensive companies not dealt with

no radical breakthrough sustainable energy

Netherlands one of the leggars in Europe

no build-up of new economic structure

European Position of Netherlands

sustainable energy total : 24ste of 27 countries

sustainable energy per head: 20ste of 27

sustainable energy per GDP: 23ste of 27

EvaluationGermany

takes big jump, gambles and chooses radically

creates chaos & resistance, also green economy

Netherlands

takes little jumps and chooses gradually

harmony but also chaos, influenced by Germany

in Germany a power shift

in Netherlands status quo

in Germany energy gets

into hands of citizens, in

the Netherlands not yet

What does this mean?

Netherlands is in a fossil lock-in

coal fire plants, power plants, CO2-hub, gasrotonde, CCS

electricity surplus : 120% in 2020: 80%

dominance of fossil fuel energy-intensive industry

huge amounts of heat loss, little sustainable heat

emergence of decentralized sustainable energy, small capacity

Netherlands Fossil Guiding Country?

Dutch energy supply is one-sided and gas-oriented

Dependent on politically and economically instable regions

gasfields empty around 2025-2030, no clear alternatives yet

green gas has relatively small volume, shale gas not atractive

Netherlands as gas roundabout is financially not attractive

Dutch energy supply is far from sustainable

Strategy of the Netherlands

sustainable energy supply system is possible in 25 years

natural gas can be used as transition fuel for the next 10-15 years

break down natural gas fast while stimulating green gas

offshore wind, solar energy, sustainable heat, built environment

transition to biobased economy for industry /agriculture/transport

Centralized Energy Supply

accelerate transition to a green economy

- CO2-poor/free

- circular economy

- biobased

Energy sector will disappear

chemistry / agrifood points fully at energy

for transport sector energy becomes more important

building sector competes with energy in built environment

Decentralized Energy Supply

energy neutral built environment

smart grid infrastructure

scaling up local energy initiatives

Energy Agreement

polder compromise

covers only 25-30% of energy usage

shortest route to minimum 2020 goal

does not accelerate the energy transition

no fiscal green incentives

does no harm and is budget-neutral

Conclusions

energytransition demands courage & leadership

if NL is willing it can be energy neutral in 25 years

critical factor is not technology but willpower

Netherlands is forced to choose