In my previous posts, I had endeavoured to bring clarity to myself on the complex topic of Energy. Having written this amost a month apart - I hope there isn’t too much repetition - though if there is: it serves to underscore the areas i feel terribly strongly about.
I had also touched on the point that I have seen multiple narratives, and the noise in this field.
Complex Problems with No right answer
We can recognise a complex problem exists when a caste of “Thought Leaders”, bringing with them: varying passion and vitriol emerges with different views. Energy is no doubt one of these battlegrounds, with LinkedIn as its combat zone.
I need not point to a range of “influencers” debating on linkedin and various feeds. There continues to be great disagreements between and amongst thought leaders, governments, and executives.
This is very much a part of a continued attempt to rationalise points of disagreement between people or entities who clearly are smart. How can two sides continue to be significantly divided? Though I empathise, energy is such a complicated topic (and why it is equally fascinating to me) And so, here goes some core frameworks and principles to align my thinking to.
So how does one react, think and respond to each of these? I first attempt to get into the minds of each of these individuals, building off my past frames.
Think like and Engineer, Believe like a Politician
I consider that there are two primary Perosonas:
**Politicians: **love Technology and require strong visionary narratives. It enables a (demonstration of political response). The sexier and more ambitious the better, before the practicalities of dollars and cents break in. These are nuanced by both domestic as well as geopolitcal considerations.
Engineers: love economics and technology, and are inclined towards rationality, numbers and logc. It is merely a game of numbers to calculate possibilities, benefits and costs. They can be deeply critical of decisions that “do not fit the math”.
Side note: Sales people love pushing out product. They feed on the divides to choose with narrative best serves their KPIs. And in this growing-up phase on new energy, some things are real, and others aren’t.
So there is a fundamental disconnect between these two leading narratives.
I believe the truth (as with most of the stuff i write) lies within the intersection of the various disciplines.
Engineers can develop sound judgements based on known assumptions, but I believe these significantly underestimate the intangible and unquantifiable nuances in politics to sway and radically challenge such assumptions. I find such views to be weaker - partially because the world is headed in a direction where intangibility and politics will play a greater role in driving change.
Knowing which persona and what type of individual is behind the narrative helps me to contextualise where they’re coming from.
Acknowledging fallacies in narrow narratives
No one- size fits all
One narrative I feel particularly against is the old european guy talking about how great interconnected HVDC grids can be. Well, yes - although one must note that the EU itself is a fractured piece of Chinaware. But to critique the policies of countries such as Japan, Korea and Singapore reeks of terribly bad understanding of local context and poor assumptions.
For example there are excellent frameworks on the ways Hydrogen use should be prioritised. It’s effective and sound from a technological perspective. However for those not living in a country blessed by close neighbours unified by grids and an abundance of renewables - the framework simply cannot be used as a “one size fits all”.
In my view, the confusion on why markets are shifting away from the “perfect” techno economic analysis is largely due to a lack i) deep understanding of unique energy security considerations, and ii) lack of understanding political nuance.
Politics, politics, politics
A second narrative, which is the main area where i critique pure Engineers - is the appreciation of the impact of political nuance. This can be further broken down into domestic and international politics. Other key areas include:
Industrial Policy: Advantages to drive new economic growth by being first in certain areas - even if it means being more visionary and ambitious than the norm
Control of strategic supply chains: The end of dependence on Fossil Fuel centric companies will shift the gravity of power to areas with abundant renewables. Already countries such as Norway are becoming industrial powerhouses based on cheap fjordic hydropower
Staying away from toxic / boring one-dimensional narratives
Lastly, I’m wary of narrow minded toxic narratives. These include: Big Oil are baddies - Yawn. Possible, but should not be the same tirelessly repeated argument that offers no solution to keeping the lights on, affordably. Rarely do critics offer practical alternatives.
Governments are stupid - see point above of political nuance.
Stranded Assets - Requires an appreciation of trade offs, unless they really do think we should bulldoze people’s houses to make way. The indirect consequences are rarely considered by such arguments.