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2030: What Difference A Decade Makes (A Utopian Blog)

At the height of pandemic, on Earth Hour 2020, a coalition of youth, local governments, business start-ups, and healthcare professionals in Vietnam, Indonesia, and the Philippines – the so-called “V.I.P.” countries — joined together in laying out their principles and demands for a responsive and inclusive energy transition in Southeast Asia. They started by making sure local utilities and financial institutions enter into unprecedented levels of cooperation to allow massive and scaled deployment of renewable energy, starting in the Philippines.

Earth Hour 2020 was the start of a decade-long journey

That was March 28, 2020.

The coalition called on government and business leaders to drive forward Southeast Asia’s bold path towards justly and effectively transitioning our energy future to one that is decarbonized, digitalized, and decentralized, or collectively, the “3 Ds”.

Decarbonization, Decentralization and Digitization were identified as the key elements for a uniquely Southeast Asian energy transition. “Think about the transformation of the power sector from a one-way street of energy powered by fossil fuels into a multi-directional, multi-lane highway characterized by smaller-scale generation plants harnessing limitless sources such as the sun and wind,” an old vlog from that day described the vision.

Interlinked, these “3 Ds” now define the energy sector of 2030:


Decarbonization has allowed the world to limit rising global temperatures and helped Southeast  Asia meet the international Paris Agreement by 2030. Because of the region’s role as a manufacturing powerhouse, many corporations now found efficient and scientific techniques to both reduce their operating costs and lower greenhouse gas emissions.

Decentralization has allowed the rapid scaling of smaller, dispersed energy generation units that deliver power to customers wherever they are, namely though distributed renewable energy systems. This helped countries withstand disturbances and disasters and impressively brought energy to the 45 million people who in 2020 still lacked electricity in the Southeast Asia region.

Digitization has addressed complex challenges and rapid changes in the energy sector—including large-scale integration of distributed renewables, aging infrastructure and plant equipment, volatile dynamic pricing, business model disruptions brought by new technologies and operational disruptions by shocks like the COVID-19 pandemic. Southeast Asia’s energy systems embraced digital solutions and  ushered in a power sector transformation, helping to manage large amounts of data collection and analysis and optimizing increasingly complex energy systems.

These “3 Ds” of the energy transition in Southeast Asia served the interrelated goals of savings, security, resiliency and sustainability in the post-COVID recovery and beyond, while delivering many benefits. For people’s health and the planet’s well-being.

Fast forward to Earth Hour 2030 and the coalition’s Convenor, Marlon Apanada, remembers the very words he said 10 years ago:

“This 2020, we begin to change our energy future. We will have an inclusive and responsive transition towards a cleaner, more affordable, smarter, and future-ready energy system that will benefit generations of Filipinos, Vietnamese, and Indonesians.”

They say that the best way to predict the future is to create it. And how did this motley crew create a future that ultimately benefited the world!

In 2020, Southeast Asia was becoming an economic powerhouse, with manufacturing, industry and services expanding across the region in recent decades. Energy demand also grew rapidly at an average of 6% per year, one of the fastest growth rates in the world. But despite the global decline in renewable energy prices, Southeast Asian countries had largely embraced fossil fuels to meet their growing energy needs at the beginning of the decade. Close to 60% of Indonesia’s electricity supply comes from its 29 gigawatts (GW) coal fleet, with an additional 24.7 GW more in the pipeline, the world’s 5th largest coal pipeline. The latest Philippine Energy Plan then proposed expanding the share of coal in the energy mix from an already-high 52.1% in 2018 to 55.3% by 2040 to support industrialization. While the clean power sector grew in Vietnam—solar went from 0.5% to more than 8% of the country’s energy mix in 2019 – continued vigilance was needed to ensure the country’s 80 GW of new power expected by 2030 is generated sustainably.

But then the COVID-19 pandemic happened. It exposed the vulnerabilities of this fossil fuel-driven economy.  Led by Vietnam, one of only few economies that grew its economy amid the pandemic and drove its energy transition seriously, spurring 20,000 MW of new solar installations when the rest of the world reeled from the health and economic crises, Southeast Asia embraced the principles of Building Back better after COVID-19.  In an unprecedented move, government and business leaders showcased an unprecedented level of cooperation: quick and coordinated action across many stakeholders — national and local government leaders, financial institutions, distribution utilities, grid operators, and energy consumers. The region, the world’s 6th largest economy at the time but is now the 3rd largest after China and the United States, realized that doubling down on coal was not the way to pull its member-nations out of crisis mode.

Shifting energy systems onto a modern, low-carbon path thus  secured Southeast Asia’s future as an economic powerhouse, and  created jobs, addressed climate change worries, and improved public health in the process.

Looking back to 2020 made Apanada wistful. He saw that the new decade presented a new and unprecedented opportunity to ensure leadership in a new energy economy and provide a stronger voice from the youth, small-and-medium enterprises (SMEs), and grassroots organizations for solutions. “If we do not change today, we continue on a path that makes life unaffordable, damages the environment, and increases our vulnerability as a nation. For millions of young Southeast Asians, the status quo is simply unacceptable,” read Apanada from a journal entry marked March 28, 2020.

What difference 10 years makes.

“As we start a new decade and aspire for a more sustainable future, we will not allow our country and our neighbors in Southeast Asia to be constrained to a Business-As-Usual approach of more expensive energy, more import dependence, more pollution, and worsening climate change. We will also not allow ourselves to be locked out of rapid global developments that can lead to massive investments in a new energy economy, create thousands of high-value jobs, and usher in a new era of clean and cost-competitive technology that can benefit all,” the journal entry continued.

A decarbonized, decentralized, and digitized energy system for the world’s most dynamic region, Southeast Asia, in 2030. Thanks to the seed planted 10 years ago by this dynamic coalition that saw the future clearly: a healthy planet, healthy economy, and healthy communities.

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4 Factors that revolutionized Green Energy

Challenge-lovers will be deeply disappointed. The world has changed and for better. Never, in the last decades, it has been so easy, obstacle-free, to develop large-scale renewable energy projects. Good bye complex and endless regulation; adios economic recession/stagnation and funding shortage; ciao citizens’ opposition and “not in my backyard” refusals; tschüss inefficient, uncompetitive technology and intermittent energy supply, there was a revolution!

There has been an interesting domino effect between 4 changing drivers that led, in my humble opinion, to a (peaceful) revolution in the protection of climate change and in particular in the development of renewable energy infrastructure. Political will, Favorable economic conjuncture, Citizens’ awareness of climate change and Education, innovation and enhanced technology.

By domino effect I refer to the interconnection of the aforementioned factors. One triggering the others and it is this dynamic that revolutionized the energy sector.

A Greener World (Illustration Credit: Bold Business)

i. The political factor: Government policy and environmental laws

Political will has played a critical role in the change, probably the most relevant one because it might be the one with which it all started.

When we look back, analyzing the political landscape of the 2000’s, about 50 years ago, we realize how far we have gone in terms of climate policy. In the early 2000, policy-makers and leaders, who stand for the climate and the protection of our planet were considered vorreiter. The political landscape was boring: all parties were offering barely the same programs: the difference between the left and the right parties was a couple of percent in the promise to reduce income taxes (Bregman, 2017). At that time, the brave were the leaders daring to stand up for the climate. Today, even with the introduction of the Global Green Act (GGA), a bill ratified by 200 nations that bans the use of any Co2-emitting activity and promotes an adapting and resilient transition toward a clean world, we feel our leaders can go even beyond the GGA’s objectives. Leaders pledged to significantly rise climate investments by 2060, arguing that the economy, which has never been so growing, is able to boost these investments. That this would create jobs, further stabilize certain industries, enhance education in several fields (e.g. digitalization, automation, AI applied to the energy sector), develop innovation in many areas of research and ultimately create an even greener and sustainable global economy.

ii. The economic factor: Economic growth and consumers’ income

If we had mentioned today’s economy, with its level of growth, its ‘almost perfect market’ and the optimum reached in international trade (since 2030, the trade balances between the Northern and Southern Block are around zero, meaning no nation or block is benefiting nor loosing from another), one would have thought that we are utopians. But progress is the accomplishment of utopias, said once Irish writer Oscar Wilde, and what we once thought were crazy theories proved to be right. Back to 2010 or 2020, economic wealth was only based on basic goods (citizens would simply be obsessed by material consumption, remember: obesity was at its highest rate since last century), developed economies were trying to take advantage of emerging countries (the latter selling technology or high value-added products to the former, which only relied on revenues from primary resources export) was the norm. Even the OECD, for some analysts, had lost purpose. Now in 2051, inflation is just at its perfect level: not too high not too low; unemployment rate is negative: we are looking for (inexistent) jobless to fill vacancies! In the two blocks, wages are so high that anyone in the world can afford the latest 4-Dimension-virtual reality-TV! And even more surprising, inequality reduced significantly, though still present in both blocks. Would you have thought that we would be living in today’s world, one day? Would you have really?

The best and unexpected is that this economic wonder has triggered a social and behavior change that not only benefited the planet but also human’s well-being. The time where we could hear intellectuals saying that life had reduced to “economic calculation, endless resolution of technical problems, environmental concerns and self-requirement of our consumer’s condition” (Fukuyama, 1989) seems to be a century ago!

Economists have been fighting for centuries from Marx or Keynes to more recently Stiglitz or Piketty, with all sort of theories. Today, we barely need them. Despite the differences between the historic movements (communism, socialism, capitalism), we made it: after all HDI is at its highest! How utopic is it to think that today’s ideal world is tomorrow’s weak world (‘to love more than yesterday and less than tomorrow’)? Is today a ‘rational ideal type’ to be analyzed as an apparent irrationality as did Max Weber (Shils and Finch, 1997)? In fact, “the real crisis of our time is not that we are not good off; it is that we cannot imagine a better world than the world we have today” (Bregman, 2017) but to me it can only be better.

iii. The social factor: Customer buying trend and health/climate consciousness

People have changed. They have evolved. Just in few decades, they managed to allow a drastic improvement of the protection of climate change. Materialism, irrational consumption are ‘uncool’. We have been underestimating our own ability to understand deep and sophisticated needs of ours; the needs to cheer our planet, our blue home, our children’s home after all! We became long-term thinkers. Today we think society, community (and not individualism), circular economy… We are ready (and can) pay the price for sustainable products and services. Unbelievable some years ago, so self-evident today. But it is not only because we realized during the last two generations that it is crucial to protect the planet, it is also due to the economic improvement (cf. previous factor), that made prices drop. With the GGA everything is bio now. Everything is produced with clean energy and it is cheap!

And because it is economically viable, there are no reluctant businessmen or customers any longer. Investors, entrepreneurs, instead, look constantly to improve efficiency and competitiveness. One of the key factors is through technology and innovation. And for technology to improve, research, education and companies need to work hand in hand.

iv. The technological factor: Emerging technology and increased training leading to innovation

All these achievements would have probably not been possible without a huge change in the mindset of engineers and universitary start-ups that specialized in clean energy. They decided to exclude in their development any option that creates intermittency of energy production. This came from a twist that the research and development of power plants manufacturers experienced in 2030 when regulation unexpectedly changed, a sort of Hiding Hand event (Hirschman, 1967). Engineers were looking for a solution to tackle the issue of compliance with the new regulation, requiring higher efficiency: while looking for this solution, they investigated and ended up finding solutions that not only solved the compliance issue but went beyond: eradicating, thanks to digitalization, artificial intelligent, automation efforts, the variability limits of renewable energy!

What can still be improved or changed? What will our generation’s revolution be?

January, 20, 2051

References:

Bregman R., Utopia for Realists, 2017, Bloomsbury

Fukuyama F., The End of History, 1989, The National Interest

Shils A.E. and Finch H.A., The Methodology of Social Sciences, 1997

Hirschman A., The Principles of the Hiding Hand, 1967, ProQuest

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Yet another morning in Eternal Spring

When Carolina closed the door this morning she….

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