Tuesday, May 26, 2020

The pandemic’s long-term impact on the energy transition

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Since the COVID-19 pandemic halted normal life across the world, images showing the decrease in pollution have gone viral. The air improved dramatically everywhere from China to India to here in the United States. But these are short-term changes. What does the future look like for the energy transition? How will the pandemic ultimately affect efforts to move away from fossil fuels?

To discuss this, Pink Petro founder Katie Mehnert held a web event with two people whose work focuses on this arena: Allyson Anderson Book, vice president for energy transition at Baker Hughes, and Marcius Extavour, lead for environment, energy and climate at XPRIZE.

Extavour cautioned against assuming that the pandemic will trigger rapid acceleration for the energy transition. But he does predict a slight acceleration.

“The real question is going to be: Do the players that make major long-term purchasing decisions engage in those decisions now?”

“Something that might hold the transition back is not a lot of people right now seem to be in a position to make major capital outlays,” he added. “So maybe there’s an opportunity to invest in a new direction, but who has the balance sheet to actually execute that today?” Perhaps some governments that focus on “green recovery” will launch new investments in renewable energies, Extavour said.

Still, this time provides businesses “an opportunity to look at efficiency gains,” coupling cost savings with “energy savings or with a decarbonization piece,” Anderson Book said.

Change is always incremental, and difficult times can often inspire “forward thinking approaches,” she added. “We are a society that does more when times are lean usually in terms of how we innovate.”

Recent weeks have shown that businesses can innovate and adapt more quickly than many people thought, Extavour said. “This experience has shocked everyone and it’s made us see things that we didn’t think were possible happen so quickly.”

But the future of the energy transition won’t just be decided by governments and businesses. To a large extent, it’s up to individuals, they both said.

“Don’t underestimate the power of a lot of people doing small things,” Anderson Book said. “If you get people to change behaviors, that is where you get the biggest cuts… Are we willing to make that commitment ourselves?”

Even just a small action to save energy can serve as “a trigger for social change,” Extavour said. It can lead to conversations — and to actions that change society. “Regular people have two very important things: purchasing power — remember, the United States is still a consumer spending-driven economy — and political power. Most people — or, some people — vote. And cultural change through purchasing power and electoral process, those are huge factors that we need in any kind of energy transition.”

To hear them discuss much more, including how the United States and Canada really stack up against China in bridging toward the future of energy, watch the replay above.

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