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A difficult new normal; Decarbonisation

Updated: Oct 28, 2022

Dr Martin Belusko takes a look at a world that needs to decarbonise.

The global energy transition and the associated urgency around decarbonisation has thrust onto companies a complex challenge. Transitions normally occur organically with clear value propositions, driven by competition. this However the pressure to decarbonise has meant companies must make strategic and technology decisions on the fly. The recent global energy crisis has compounded this challenge throwing previously well understood costs and constraints up in the air.

With so many decarbonisation options available, everything from purchasing carbon credits to installing solar PV to being swamped by catch phrases like electrification of heat, it is always convenient for someone to say “you should do…” but when it is your factory and your decision, this flood of options is often unhelpful. Unfortunately, most product or service providers are myopically focused around their specific offering, which is to be expected.

Getting independent and reliable advice can also be a challenge. Universities, who have a technical expertise in the new energy space, view this problem through a research lens, finance companies through financial instruments while engineering companies are geared towards the conservative.

This energy transition is a 1 in a 100 year event, consistent with the birth of electricity and the onset of the automobile, therefore no one alive has done this before. Furthermore, juggling this transition while meeting all other corporate responsibilities and expectations just adds to the challenge.

Energy related technologies such as heat pumps, cogeneration, solar PV panels, solar thermal, batteries are at different stages of their technology life cycle. Furthermore, the whole energy system is changing where, in the electricity grid is two way where, customers with solar PV panels on their land, are now generators, not just traditional coal and gas fired power generators. There is the perpetual vision of hydrogen that will replace my gas at some distant date at some unknown price, and the confusion around whether to buy an electric, hydrogen or bio-LNG truck. Finally, the poor cousin of energy, energy efficiency is always an opportunity never in view.

Navigating this plethora of options and sequence of options is what effective decarbonisation is all about. This inevitably requires insightful technical and financial understanding of the operation of how various solutions will fit into your company, which ultimately takes time and effort.

In advancing decarbonisation in your organisation, the first step is to recognise that it is difficult and will continue to be difficult. No longer is doing nothing an option, no matter how tempting it is. Furthermore, understanding that there is no single solution and no solution which is fixed in time, is critical. Finally, what’s needed is a serious commitment to developing or finding specialists who can genuinely grapple with this challenge.

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