Navigating the Energy Transition: Reflections from the World Economic Forum

Akselos CEO and VP Australasia at the WEF event in Tianjin, China.

Last week, Akselos had the privilege of participating in the World Economic Forum (WEF) Annual Meeting of the New Champions in Tianjin, China. This event assembled voices from every corner of the globe under the theme of “Entrepreneurship Driving Global Economy”. The theme, profoundly relevant to the company, underscored the power of entrepreneurial spirit in shaping and driving the global economy. It served as a resounding reaffirmation of a shared commitment to future-proofing our planet. From diverse regions across the world, a common thread emerged, reflecting a universal desire to build a more equitable, sustainable, and resilient global economy. This critical connection highlighted the necessity to foster innovation and entrepreneurship across regions and industries at the WEF this year.

At the event, the Akselos CEO Thomas Leurent was privileged to attend two private sessions centred around an exciting initiative taking shape at the WEF, The Material Transition. The sessions offered fascinating insights into the future of material use and management. It became evident that the traceability of materials is becoming increasingly critical, and consumer acceptance of the green premium is now apparent in leading sectors such as electric vehicles, with emerging signs in large sectors like building and construction. The potential for repurposing traditional molecules for new uses, such as hydrogen and ammonia in large-scale energy production was also underscored. As electrification progresses, it was suggested that the demand for smart materials could scale up, potentially reducing the number of high-voltage transmission lines needed with the development of better conductors.

Overcoming Global Challenges on the Road to Net Zero 2050

Beyond the private session, a crucial question emerged in public discussions: how do we get back on track in our journey towards Net Zero 2050 amidst our current global energy crisis and geopolitical tensions? Despite a decade of progress, the energy transition has faced severe setbacks. Recent factors, including economic and supply chain disruptions due to COVID-19 and the Russia-Ukraine war, have led to affordability challenges, shortages, blackouts, and the highest inflation levels in decades. The ripple effects have been severe, with high energy prices triggering food inflation, affecting the cost-competitiveness of energy-intensive industries, and escalating the cost of living in many countries. The need for resilience in the face of these challenges is more apparent than ever, as the energy crisis and the pandemic won’t be the last hurdles we encounter in our transition journey.

Yet, we should keep sight of the progress we’ve made. Major economies are making significant strides towards a sustainable future despite the challenges. Investments in renewable energy have surged, with $1.3 trillion invested in 2022, marking a historic 70% increase from pre-pandemic levels. Concurrently, electric vehicle sales are shattering records, with 14% of new cars sold in 2022 being electric. Finally, the Energy Transition Index (ETI) – which benchmarks 120 countries on their current energy system performance and the readiness of their enabling environment – has been broadened to capture the crucial interplay of equity, security, and sustainability. While the Nordic countries continue to lead the way, China, the world’s largest energy consumer,  gained 43% – approximately double the global average – in its transition readiness scores, reaching the top 20. 

De-Risking the Energy Transition

Solar panels and wind turbines
Composing with wind turbines, solar panels and electricity pylons

During the conference, Jason Bordoff, the Co-Dean at Columbia Climate School, Columbia University, made a notable intervention. He urged for a necessary shift in our approach, stating ‘we need to de-risk the energy transition.’ It is a sentiment that could not be truer.

Our pathway forward demands that we address the inherent risks associated with the energy transition, which range from geopolitical tensions to the security of our supply chains. The recent war between Russia and Ukraine has laid bare the fragility of our current energy infrastructure, proving its vulnerability to geopolitical shocks. On the other hand, this unfortunate event has also demonstrated the potential for rapid, systemic changes, given the right combination of robust policy measures and regional cooperation. This fact is well illustrated by Europe’s successful efforts to reduce its reliance on Russian gas.

The founder of the World Economic Forum, Klaus Schwab, encapsulated this sentiment perfectly. He said, “The world needs bold and visionary leaders who can harness the power of innovation for the common good.” There is no better demonstration of this spirit than China’s rapid adoption of solar energy and its ambitious roadmap for green hydrogen.

Moreover, leaders from the shipping industry, logistics companies, and container ports have joined forces in a promising development towards a sustainable future. Their collective goal is to pave the way for net-zero emissions in shipping, a sector notorious for its substantial contribution to global carbon emissions. Their commitment to this cause exemplifies the type of cooperation and visionary leadership necessary as we undertake the crucial task of de-risking our energy transition.

Embracing Innovation for a Sustainable Future

As we look towards the future, a significant challenge lies in expanding the supply of critical materials to meet the rising demand associated with the energy transition. A standout statistic from the conference put this into stark perspective: to achieve our net zero goals, there is an urgent requirement to increase global mineral output sixfold. This fact underlines the imperative for major enhancements to our mining operations.

Luckily, the advent of sophisticated technologies like digital twin technology can assist in overcoming this challenge. By simulating entire mining production chains, this technology can optimise operations, increase output, and help meet the steep demand. Utilising such technology is essential to keep the energy transition on track, ensuring that we are prepared to meet the demands of a green future.

Digital twins of mining infastructure

In addition, the World Economic Forum is focusing on the intersection of the Fourth Industrial Revolution and the future of the energy transition. In a dedicated session titled “4IR Deep Dive: The Future of IoT Innovation,” the forum delved into the role of Saudi Arabia and its Centre for the Fourth Industrial Revolution. The focus is on aiding Small and Medium Enterprises (SMEs) in the manufacturing sector to meet demand and transform the country into a global hub for mining, industry, logistics, and energy.

Further, companies from the Global Lighthouse Network community, which represents 132 advanced factories across the world, shared invaluable insights. They presented a deep dive into how disruptive technologies, including the industrial metaverse and generative AI, can revolutionise operations. The discussion also included an elaborate cross-company roadmap for implementing these technologies.

The conversations held and the ideas presented are vital as we navigate the complexities of the energy transition. Integrating these technologies into our mining operations and manufacturing sectors can aid in meeting the significant challenges we face, pushing us closer to our net-zero goals. As we learn and evolve, these strategies will undoubtedly play a pivotal role in shaping the future of energy and our collective journey towards sustainability.

Charting Our Course: Final Reflections on the Energy Transition

Reflecting on the World Economic Forum discussions, it is clear that the path to Net Zero 2050 is filled with complex, global challenges. But even amid these difficulties, there are significant grounds for optimism. Our progress, the alliances forged, and the innovations ignited affirm our shared commitment to a sustainable future.

The road to net-zero emissions is steep, but it is within our power to navigate. This journey demands technological prowess, the courage to reimagine our systems, the tenacity to challenge the status quo, and the vision to look beyond immediate setbacks towards our long-term sustainability goals.

As Klaus Schwab stated, the world needs bold leaders who can harness the power of innovation for the common good. As we tackle energy transition risks, increase material supplies, and foster innovation, let’s remember to leverage our shared goals and collective action.

Ultimately, this is not just an energy transition—it’s a transition towards a more equitable, sustainable, and resilient world. It’s about shaping a future that future generations can inherit proudly. Together, we’ve accomplished much. Now, let’s see what we can do when we truly set our minds to it. The future is ours to shape, and it starts with us.