With greater clarity of vision and leadership, everyone will follow

In the first of this short series on the pivotal role the energy markets will play if we are to get back on track in the race to Net Zero, we discussed the urgent need for more and more products and services to be produced by sustainable means – and for them to be affordable, easy to access and simple to use. Only then will we begin to achieve the mass consumer participation that brings Net Zero back into range.

Our greatest challenge is that, currently, uncompetitive prices, lack of availability and perceived complexity are still pushing too many consumers in the direction of high-carbon, unsustainable solutions. And with the impact and aftershocks of COVID-19 already squeezing both national and personal finances, this conundrum is, by the day, becoming more and more complex.

But in so many ways, this growing complexity is bringing the task into even sharper focus. Our range of options are narrowing, and the only logical way forward is becoming clear. We must move on and leave our traditional structures and ways of working behind.

Consumers can flex demand but having visibility, or fixing problems of supply is not in their gift, which makes reducing demand according to supply issues currently impossible. The energy markets, policy makers and our entire system of energy market governance, must leapfrog current thinking, and empower the energy market to deliver innovative, automated and affordable solutions that enable industry to produce the sustainable products and services for which there is clearly a growing appetite.

Much has been achieved in recent years – but solar panels, heat pumps, electric vehicles and the rest must become the norm, the default position, not nice to haves, if you can afford them. But simply catching up is not enough in itself.

The global energy system’s key participants must go much further, much faster, if they are to avoid isolated islands of activity that are not interoperable, resulting in stranded assets and wasted investment. They must be bold; they must take the initiative. In short, they must lead. If they don’t, who will?

There are already worrying signs that, in the absence of sufficient vision and leadership, small, localised and disconnected solutions are filling the space created by inertia and limited progress. And while many of these efforts are laudable and successful in themselves, illustrations of the transformative powers of today’s technology, in the context of Net Zero, there are very real concerns that they will result in fragmentation, dilution of effort and loss of focus, or that they simply won’t deliver at scale.

The traditional energy market institutions must come together and act in unison to create the vision, framework, alignment and momentum for fundamental and lasting change, as well as creating a philosophy and an environment in which innovation can thrive and be scaled and brought to market effortlessly and at pace.

To illustrate the scope and scale of the shift required, if Energy 1.0 was the original state monopoly, Energy 2.0 was about enabling competition, and Energy 3.0 was about the arrival of renewables, an incremental step change to Energy 4.0, will not be enough.