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Can technology save the planet? This is one of the big questions that we will grapple with in 2022.
COP26 in November 2021 set a new urgency to the drive to decarbonise and keep global warming to no more than 1.5C of 1990 levels, in alignment with the Paris Agreement goals, but how we do that is yet to be agreed.
We know that coal use is to be ”phased down”, renewables to be phased up, but what constitutes the energy source of the future – renewables, hydrogen, nuclear, generation versus storage – is still a topic of strong debate.
That debate will get hotter as we move towards COP27 in November 2022, when countries will be expected to come to the Egypt conference with far more stringent Nationally Determined Contribution targets (NDCs) for how they will cut carbon.
“As an investor in transformational technology, we see the reality that digitally powered renewable energy systems can bring. We also know that it can be done now”
The debate is split into two camps, as so vividly detailed by Charles C Mann in his book ‘The Wizard and the Prophet’: those that believe catastrophic global warming is coming and we have to significantly cut our carbon output and consumption patterns in response; and those that believe in the power of technology to solve the global warming issue, finding new ways to generate and use energy and save the planet.
In our view, 2022 will see both concepts embraced. We have the technology we need today to re-shape the global energy mix and to change the way we generate and consume power. Digital technologies, enabling the digitisation of homes, businesses, transport and cities, provide the platform for change.
By better understanding our energy needs, by managing our infrastructure and systems more effectively and enabling us to manage the supply and demand of energy more efficiently, digital technology will allow us to cut energy usage and electrify our infrastructure now. We don’t have to wait for future technological developments.
As an investor in transformational technology, we see the reality that digitally powered renewable energy systems can bring. We also know that it can be done now.
Driven by those who think differently and have the vision to see how they can use technology to drive real environmental impact, 2022 could be the year of the entrepreneurs, the disruptors, for those in big organisations or governments who accept the science behind manmade climate change and commit to doing something about it.
Another big development that emerged from COP26 and will shape behaviours in 2022 was the vast amounts of investment now being lined up behind sustainable and ESG-focused projects. Mark Carney’s Glasgow Financial Alliance for Net Zero (GFANZ) has corralled $130 trillion in private finance to fund the transition to net zero, while experienced investment firms, such as Future Energy Ventures, are already backing the start-ups looking to transform the traditional energy value chain and accelerate the transition.
As a result, the green tech space is booming. As of March 2021, European green energy start-ups attracted over in funding and the number of climate tech start-ups reached over 800, according to Sifted. These innovators will be fundamental to the transformation to a new energy future, and have never had as much opportunity as they do today to get the backing and support they need to bring their ideas to reality.
Yet success requires more than just money. Wider systemic change will be driven by collaborative approaches among promising start-ups, investors and ecosystem partners – technologies and ideas feeding off one another to create a network of symbiotic relationships to advance decarbonization and digitization.
As we look ahead to COP27 we need to free our thinking to look at ways we can decarbonize now by adopting technology that works with our current energy mix and also provides the flexibility to adapt to a future when energy demand and use will evolve.
As we electrify our transport, homes and industry, demand for electricity will soar. We need to plan ahead for how we will manage that demand, generate more clean energy, store excess energy, enable buildings to become microgeneration platforms and cars to become battery storage systems, and connect every layer of a city to the broader energy eco-system.
That is the mission for 2022. It’s our mission and it should be the mission of the business and political community at large.
It can be done. There is no excuse or need to wait for the next breakthrough technology. The technology exists today and there are numerous examples of innovative organisations using technologies such as IoT, AI and blockchain now to shape a more sustainable future. Recent examples include Bidgely’s Utility AI which connects homeowners and utilities, helping them to predict energy needs and manage demand accordingly; gridX which uses cloud technology and IoT to create distributed energy resource management systems; WePower in Lithuania using blockchain technology to make renewable power tradeable and accessible to anyone; and Lumenaza’s Software as a Service platform, which enables green utilities to start, grow and evolve their business by connecting producers and consumers of green distributed energy.
We can be both prophets and wizards in the race to net zero. The technology to get us there exists, the imperative to deploy it is widely acknowledged. If we now have broad acceptance that we have to meet Paris Agreement goals to limit global warming to 1.5C by 2050 then we need to lean in now.