HBS Asks How Fast We Can Transition To Renewable Energy?
By 2050, a handful of countries have admirably promised something that seems like a far-off pipe-dream—running solely on renewable energy.
Denmark and Sweden have already promised a complete transition by then and soon other countries are likely to follow. That being said, wind and solar power account for less than three percent of global power production. As well, not every country has the same resources.
Speaking with Harvard Business School (HBS), MBA ’86 alum and Rocky Mountain Institute (RMI) CEO Jules Kortenhorst and institute principal Nushin Kormi, MBA ’05, took questions on the future transition.
Nigeria is the sixth-largest producer of fossil fuel in the world, and its national economy derives 90 percent of its federal income from fossil fuel production. How can a nation like Nigeria provide affordable renewable energy in a depressed economy so dependent on fossil fuels? – Tonye Cole (AMP 186, ’14)
“The world of fossil fuels is a volatile one, and exporters of fossil fuels expose their economies to that volatility. Domestically, Nigeria, Africa’s largest oil- producing country, has expensive and unreliable energy. Whether it is lines for automobile and generator fuels or blackouts of the electricity grid, Nigeria is a perfect example of a country that cannot afford to do without efficiency and renewable energy. Efficiency and renewables compete very well with expensive oil-based energy and are more reliable. A domestic focus on efficiency and renewables can reduce domestic energy bills and create diversification. A favorable business climate for renewables investors could make all the difference.”
Are global R&D budgets being allocated efficiently to the most promising technologies to prepare for the next era—or to those technologies in which our industrial champions have the largest stakes? Or do you believe these are the same? – Richard Bailey (MBA ’81)
“The global energy transition involves the public and private sectors alike. Global R&D budgets for energy are growing, with 20 countries, including the United States, making commitments at the 2015 United Nations Climate Change Conference (COP21) in Paris to double their energy R&D spending. Although government R&D has its challenges, it also brings the ability to finance the early stages of technology demonstration and scaling. At the same time, the business community is increasingly positioning itself for a sustainable energy future. This requires that the private sector supports, develops, or acquires the most promising low-carbon energy technologies of the future. Ultimately, the companies that are willing to make investments in these technologies will become our next generation of corporate champions.”
Generating electricity for electric cars produces carbon emissions. What percent of a nation’s electricity has to come from non-fossil fuels before electric cars lead to a net reduction in carbon emissions? – Mark Caron (MBA ’93)
“Generating electricity from fossil fuel produces carbon emissions, and so electric cars powered by our electricity grid are associated with carbon emissions. But an electric vehicle is less carbon intense (in terms of pounds of CO2 per mile) than a 25-mile-per-gallon internal combustion engine vehicle—even if the electricity grid that powers the vehicle is generated from 100 percent coal. It is important to note that electric vehicles can provide a solution to both personal and freight mobility, and even work with the electricity system to help manage variability in demand, which will result in more economic value and lower carbon emissions.”
Read the entire interview with Kortenhost and Kormi on the official HBS website.