Making electrification actually happen

Because if it doesn't you can kiss good bye to the net zero targets

This week's Sunday brunch is about "how do we help make electrification" actually happen. This is really important, probably much more important than you think.

Electrify everything (to quote Saul Griffith) sits at the heart of most countries net zero plans. Electric cars, electric building heating & cooling, electrified heavy industry, and even things that don't sound electric, like green hydrogen, actually need green electricity. The bottom line is that we will need a lot more electricity.

And if this transition is to be green, then we need as much of this electricity to be low carbon, so as much wind, solar, hydro etc as we can. So far, pretty consensual.

But this is where I depart. Building all of this green electricity generation is probably not possible on our existing electricity grid system. The grid was built for a very different business model. Yes, its one that has served us well, but we need to change it. And change it dramatically.

What does this mean ? First, a lot more interconnectors and battery (like) storage. But that is only part of it. We need to keep the grid stable, which the variability of renewables makes tougher. So we need a lot of software based grid management technologies. And this all needs investment & now.

And, we need a very different grid management system, we need variable pricing to give everyone the right signals about when to use more electricity and when to cut back. And we need demand management tools and infrastructure. And for all of this to work, we need a digital electricity grid. Basically a giant version of smart meters.

Oh, and we probably need to move a decentralised grid (more local) - as this is more responsive. Plus, we need the regulation that encourages this to happen.

Now, we have two options here. We can leave all of this to the experts (and the politicians), after all its very technical and complex. But, for very sensible reasons, this will probably be too incremental. There are a lot of companies and organisations with very good reasons for wanting change to be cautious.

Option two is that we, the finance people and the sustainability people, get involved. And I mean really involved. We work with the politicians, the regulators, the companies, and the providers of finance to sort out what needs to happen to get us to where we need to be, as quickly as possible. And hence where the money needs to flow, and how this can be incentivised.

So, lets all learn about how our electricity grids work now, and how they need to change. Because, if we don't, all of those targets for electrifying everything, and all of those plans for more green electricity, are just not going to be met.

If you think this is something you want to get involved with, check out The Sustainable Investor.