Energy Citizenship: Redefining Leadership in the Global Energy Transition

You have been in the energy sector for decades. How have you seen the global energy market evolve, particularly in the transition from fossil fuels to renewable energy sources?

We are living in one of the most incredible times when it comes to energy systems and the redistribution of global power. I have been very lucky to witness first-hand and from a privileged viewpoint how the energy markets have evolved over the last few decades, and I am convinced they will continue to transform. The drivers of the transformation include rules, regulations, technology, policies, politics, climate, public opinion, and financial incentives. Each has impacted the markets in many ways, sometimes contradictory. For example, satellite communication systems, digitalization and blockchain technologies brought substantial transparency in the energy markets. However, geopolitical frictions have led to substantial opaqueness, and digitalization has created new vulnerabilities in the form of cyber threats. For the future, a few trends are emerging. Energy markets are becoming more regional. New infrastructures in the energy supply chain are being built. As a consequence, prices of energy commodities, including metals relevant to electrification, are likely to remain volatile.

When it comes to the transition away from fossil fuels, the journey has just started, and the outcome is not a given. Historically, sources of energy supply have piled up, rather than replacing each other. Will this pattern repeat this time around? One thing that differs from before, is that a growing number of people across society are waking up to the realization that energy is a complex topic, there are no quick fixes, and decisions can lead to a range of long-term social, political and economic side effects. Inflation, loss of competitiveness, pollution, political vulnerability, shift in power, are some of the most tangible consequences that decision-makers would want to avoid as much as possible. The Draghi Competitiveness Report published on September 9th places the role of energy right at its core.

You’ve recently written the book Energy Citizenship: The Energy-Power Equation Explained. What is the book about, and what key messages do you hope readers will take away?

Energy Citizenship is the first book of three volumes aiming to build energy leadership. Let me first say that the purpose of the book is to fill an important gap in education. Energy leadership has been overlooked by business schools and governmental schools. As a consequence, our leaders, who are typically educated in either school, have been struggling to cope with the current geopolitical complexities.

The book does so by providing an essential compass to interpret and navigate the chaos we live in, along two essential dimensions: energy and political power. It argues that energy is the sole source of socio-political power and influence, at the micro and macro level. It splits society between those who use it to gain control over others and those who are consciously or unconsciously keen to be controlled, shaping social imbalances. It further demonstrates how supply, in its traditional siloed representation – split among oil, gas, nuclear, wind, solar, and biomass – is currently at the centre of the energy discourse, and yet, it is just one portion of the energy value chain. Efficiency and demand – heat, mobility and electricity – are the other two main parts of the value chain, and they are just as important as supply, although they are not yet treated as such. Only by looking at supply, demand and efficiency together, leaders can achieve systemic thinking on energy matters and civilization can advance in a long-term sustainable fashion. To glue things together, the book advocates for widespread basic energy education from a young age. Only by creating a common basic language, which supersedes the obsolete siloed representation of the energy sector, can the energy debate be depolarized, decision-making processes improve and society advance in a sustainable way.

I hope readers will take away three main messages. First, the importance of energy efficiency – calculated along the entire value chain – in decision-making, in addition to more traditional monetary, financial and economic considerations. Second, the importance of understanding, and shaping demand, rather than focusing on the supply of energy. Thirdly, the importance of energy smart citizens energy able to apply pressure on governments and institutions towards long-term sustainable policies and investment decisions. The overall outcome will be a more resilient society and economy

What inspired you to write this book, and why do you think understanding the energy-power equation is especially important today?

The initial driver has been my curiosity and desire to understand specific aspects of the energy transition. During my journey, I have realized that the energy sector is populated by energy experts from competing fields who are unable to talk to each other and get to an agreement. This inability is not necessarily conscious or intentional, it is by design. The society we live in idealistically chose to treat energy as a given, a reliable input. Only when a supply shock occurs, e.g., the oil shocks in 1973 and 1978-79, or the sabotage of pipeline North Stream 1 and 2 in 2022, or the increasingly frequent brownouts and blackouts, does society wake up to the realization that energy matters, and is not at all a given. Yet, shortly after society has the tendency to get back into its forgetful mode and becomes frail and vulnerable to even bigger and more severe shocks. The book explains in detail the historical and cultural origin of this vicious cycle and provides a simple, pragmatic solution to make society energy-resilient.

I think understanding the energy-power equation is especially important today because the world is going through rapid tectonic shifts and substantial power redistribution. The world has become multipolar. Geopolitical tensions are peaking and this book provides a compass to interpret and navigate the current affairs. Energy security is high up on the agenda of political leaders. Ultimately the winner of the competition between the incumbent, the US, and the emerging world leaders, will settle on energy grounds, in the broader sense.

How do you see the concept of “energy citizenship” influencing future energy policies?

It is a three-step process. The first step, described in the book, aims to raise the level of energy literacy across society, to break the siloed thinking and the focus on the supply side, to incorporate energy demand and efficiency in the energy discourse. The second step, covered in the second volume and not yet published, will focus on business. The third volume will be dedicated to policy makers.

The first volume – Energy Citizenship – lays the foundations for the second and third volumes by advocating for a paradigm shift in the way society thinks and deals with energy issues as I just described. This shift is a multiyear project. Some countries have already embarked on this journey, introducing basic non-technical energy education programs at the national level targeting secondary schools. The desired short-term outcome is a better-educated society able to express their energy preferences more intelligently. The long-term outcome is a shift is from a fragile, vulnerable, energy addicted society, to an energy-resilient society.

Today’s energy policies still appear somewhat disjointed and siloed. But this is not sustainable and things are starting to change for the better. The energy debate is getting smoother than a year ago. It is no longer just around competing technologies on the supply side of the energy market – i.e., solar OR wind OR nuclear OR gas OR coal, etc.. Those siloes – from which many existing policies have stemmed – are gradually breaking and becoming interconnected, as a system. The outcome will be an energy mix – solar AND wind AND nuclear, etc. – , designed as per the expected long-term demand of a specific country or region.

To appreciate the extent of this shift as it is happening mostly under the radar today, we should look at how democratic processes are being tested. Governments in Italy or Switzerland exited nuclear for power supply following the outcome of the public vote years ago. In the recent past they have reconsidered those decisions and are now open to the nuclear option again.

This is just the beginning. The next step will be to include at the time the energy policy is drafted not only energy supply mix, but also required logistical infrastructure, such as transportation and storage, in the equation. For example, the electricity transmission infrastructure plays a key role in determining the ability of a country to adopt intermittent technologies such wind and solar. Storage of energy is becoming very important too to stabilize the supply chain. And to close the loop, demand, efficiency and education need to be factored in the system thinking. A growing number of players, including governments, are starting looking at these 3 areas too.

Do you believe the innovation that will drive the energy transition will come primarily from the energy startups ecosystem as it is today? If not, what is missing in the current landscape, and how can we bridge that gap?

The innovation required to drive the transformation of an energy system can be very expensive and complex to implement, it cannot come from standalone startups, if not marginally. The scope of startups is typically narrow and they lack of the broad approach required. Indeed, technical innovation may come from startups, but for it to become commercially successfully, the startup and its technology will have fit the market, and the market is typically run by incumbents. Therefore, we should expect innovation to come primarily from incumbents, directly or indirectly, because they have both deepest pockets and a broader understanding of what energy systems need. The incumbents include today’s large energy suppliers like oil and gas companies and utilities. They could also include large energy users – i.e. the demand side. Here I am thinking of the push coming from the incumbents in the AI / big data space. Their energy consumption is projected to grow rapidly and their aim is effectively to cement their current and future level of power and influence in society by integrating along the value chain and becoming energy suppliers. Startups will have to compete for funds coming primarily from incumbents, because that would be the main source of smart money. The incumbents may achieve their innovation goals that by investing in, taking over, buying the technologies developed by startups, which effectively would become an extension of the incumbents’ businesses. But innovation is not only about new, high risk, or breakthrough technologies. Building the right ecosystem is essential. Innovation and long-lasting competitive advantages will be developed primarily in those ecosystems which put adequate weight on energy efficiency, education and demand. Innovation will also come from the consolidation of the broader energy sector. Today’s fragmentation of the energy value chain provides an incredible opportunity for consolidation – and by looking at issues from a system perspective, new consolidated energy players will generate innovative and smarter solutions.