Realistic hope in a fragmenting world (2): Energy systems

This is article 2 of 5 in Realistic Hope in a Fragmenting World. Here is article 1.

In an earlier illuminem article, I introduced some general principles for generating and realising Realistic Hopes: 

1. Diversity – combining power from who is involved in progress

2. Dialogue – how players engage with each other  

3. Experimentation – what individual players do

4. Systems Thinking – the context for approaching problems

5. Futures Framing – the purpose of co-creating a more positive future 

In this second brief article, however, I begin to focus on a specific area – the Energy System - that is currently extremely troubling for multiple reasons - consider the escalating impacts of closing the Strait of Hormuz, the war in Ukraine, volatile prices, and growing emissions.  Nevertheless, despite these challenges, I believe there is value in considering both the credible basis for realistic hope looking towards the longer-term horizon and also the challenges holding us back.   

We need to begin, however, with some brutal realities.  Basically, we can not do, move or build anything without energy.  With growing numbers of people on the planet, all rightly seeking a decent quality of life, there is an expanding need for what energy enables.  Yet the bulk of the energy we use still comes through the combustion of fossil fuels.  This continues to generate greenhouse gases driving climate change and the associated disruptions to the quality of life that are already being experienced.  

Hence the urgent need for more, yet cleaner, energy.  

This need has been apparent for decades, but it has only been very partially addressed so far.  Energy use and supply has, indeed, grown significantly, powering the material benefits enjoyed by an increasing number of people.  But, for understandable – often even good – reasons, fossil fuels still dominate.  Hence the growing stock of greenhouse gases in the atmosphere is still building irreversible environmental damage and societal disruption that will become increasingly apparent over the coming decades.  The extent of this damage will be serious, and just how serious depends on how quickly the energy system, and hence entire economies, can shift from fossil fuel combustion.

This is the brutal reality we must face.  Where is the realistic hope?

On the technical side, as outlined below, routes to energy system expansion and transition are clear, technologically feasible and economically accessible.  Many are already beginning to unfold.  These are encouraging developments.  The challenge, however, is the pace of change.  This involves aligning and motivating incentives across different sectors of society to accelerate appropriate investments, while the significant benefits and relatively modest costs of doing so are not universally understood or evenly spread.  These are social coordination, organisational and distributional problems that are complex but in our collective power to address.  We even know much about how to address them, but will our socio-political dynamics enable or obstruct us in doing this in a timely way?  

In this article, however, I’ll mainly concentrate on the technical reasons for realistic hope, and dive deeper into the socio-political challenges in a subsequent commentary.   

As introduced in more detail in an earlier illuminem article, all credible future energy transition outlooks highlight 5 main building blocks: 

1. Moderating energy demand growth through structural efficiencies including integrated modes of transport, integrated power/heat/waste/water utilities, and urban densification

2. Renewable/non-fossil energy sources such as solar and wind power

3. Deep electrification of economies, up from about 1/5th of total energy consumption to well over a half, to realise the maximum potential of renewable energies as these are primarily generators of electricity

4. Liquid & gaseous substitution of fossil-fuels by bio- and synthetic fuels in sectors that are hard to electrify like heavy industry and heavy-duty transport where energy-dense, portable, or thermal molecular fuels are required

5. Removal of residual carbon dioxide emissions from the atmosphere by technical means (e.g. CCS) and natural means (e.g. regenerating forests and soils).  

While the mix and timing of these developments will vary according to local circumstances, we understand all of these building blocks.  They are all already technically feasible, and the economic incentives for several of them are already in place which is why, for example, we are already seeing the significant penetration of solar and wind energy in power generation.  Incentives for others, however, are not yet aligned, and a degree of re-perceiving energy transitions is required to accelerate this.  This is considered in more detail another earlier illuminem article.  Most decision-makers still consider energy transition a single, slow-moving, costly, supply-led burden, which is hardly a recipe for enthusiastic investment.  However, if you dig into the actual experience of transitions, it becomes apparent that it is equally valid to recognise energy transitions as:

1. Not a single process, but a series of tipping points

2. Not slow-moving, but explosively fast once the right stars become aligned, driven by competitive dynamics 

3. Not high-cost, but modest cost at most at the “macro” level, and affordable for most consumers as significant “green” investment cost premia upstream in business chains are significantly diluted through subsequent value-adding steps by the point products reach end-users

4. Not supply-led, but ultimately demand-driven

5. Not a burden, but a landscape of opportunity offering high growth potential and the possibility of securing early competitive strongholds for businesses and regions that choose to be on the front foot.

These perspectives are just now beginning to become more widely appreciated, with a recognition of how the alignment of incentives all the way along business chains is needed, from downstream consumers all the way to upstream commodity industries where the most significant investments are usually required.  Such alignment requires sufficient relevant information to be transparent to all participants in the system which is, in itself, a major challenge.  Nevertheless, we are now in an information age and the capacity for such information tracking and exchange is emerging.  We have already seen explosive growth in areas like electric vehicles and battery technologies, and are even seeing the early green shoots of growing investment in the harder-to-abate sectors of the economy (e.g. see the Project Tracker report from Mission Possible Partnership due to be published in June 2026).  

In addition, there is ample scope to prioritise attention as just 8 business chains affecting our everyday lives account for over half of all greenhouse gas emissions – electronics, food, fashion, construction, vehicles, fast-moving consumer goods, professional services, and other freight.  Even in the policy world, attention is turning to the development of product-level standards that can drive aligned incentives, e.g. EU Digital Product Passports.

I believe these considerations provide firm foundations for realistic hope.  Technologically, we can evolve the energy system needed for better lives with a healthy planet for future generations, and the economic incentives and alignments to drive this are beginning to come together.  

Nevertheless, achieving this will still require encouraging many people and decision-makers to develop a broader perception of their own self-interests, and the interests of others, than is often apparent.  This will be particularly challenging in the current political climate when a narrower, “might is right” attitude is increasingly celebrated.  This will be the subject of a subsequent illuminem article.