- The coronavirus pandemic has ravaged the global energy industry, but has done little to thwart the transition to cleaner electricity.
- Increasing renewable energy adoption requires a massive overhaul of the grid, a task that a handful of new startups are taking on.
- While the energy transition is moving fast, the industry as a whole faces major challenges related to diversity and inclusion that racial-justice protests have resurfaced.
- 100 People Transforming Business is an annual list and series highlighting those across industries who are changing the way the world does business. Check out the full list for 2020.
The coronavirus pandemic has created colossal challenges for the energy industry. Hammered by a collapse in oil prices, companies were forced to lay off workers, ax their prized dividends, and shrink their budgets.
But the largest trend, which began shaping the industry long before the virus took root, remains intact. Energy companies are getting cleaner, as are the vehicles we drive.
Oil companies built on the exploration and extraction of fossil fuels, such as Shell and BP, are now reimagining themselves as integrated energy companies. Meanwhile, young startups continue to churn out new solutions to the remaining barriers to wide-scale adoption of clean energy, like long-duration batteries.
The pandemic has also given grid digitization and intelligence, another long-term trend, a boost. The virus, which made utility workers and electricity consumers work from home, has underscored the need for automation and reliable energy.
Amid these transformations, the industry has been grappling with its diversity problem, following global racial-justice protests this spring and summer.
In the face of cheap oil, clean energy advances
The coronavirus pandemic has cratered demand for fuels like gasoline, causing the price of oil to fall by as much as 70% by April. Some experts and analysts worried it would slow the industry’s transition to cleaner energy.
Big oil companies like Shell and Total â€” among the top investors in low-carbon technologies â€” were forced to slash their budgets by billions. Plus, almost overnight, owning a gas-guzzling car was cheap, as fuel at the pump sank to under $US2 a gallon in the US.
Yet as we’ve learned from our reporting, the pandemic and cheap oil have, if anything, accelerated the clean-energy transition. Oil giants have doubled down on their climate-change commitments, while several corporations and investment firms have announced new climate-tech funds.
The coronavirus is making people realise “how unprepared we’re going to be for the rapidness of climate change if we don’t act sooner,” said Emily Reichert, the CEO of Greentown Labs, the largest clean-tech incubator in North America.
In fact, investment in clean tech surged in the first six months of this year relative to the same period last year.
“I’m more bullish than ever,” Jigar Shah, the CEO and founder of the investment firm Generate Capital, said about clean energy. “We’re going to have 10% unemployment rates for a long time. The only way to solve that problem is to have real fiscal stimulus from the government to fix it. The only thing that everyone knows how to fix is climate change.”
The transport sector, on the other hand, was ravaged by the virus, but electric cars have fared better than combustion vehicles, said Denise Grey, who runs battery giant LG Chem’s North American operations.
“We’re still in that growth period,” she said.
Electricity providers get a digital makeover
The energy transition isn’t just about building more solar and wind farms and buying electric cars. It requires a makeover of the electric grid.
You can think of the grid as a highly complex network of various energy resources â€” such as plugged-in EVs, home batteries, rooftop solar panels, or utility-scale power plants.
Those resources are growing in step with the energy transition, and they need to be managed, especially considering the intermittency of renewable power. If wind turbines aren’t spinning, the nearby community needs to draw energy from a different resource.
That’s where a new batch of smart-grid startups like AutoGrid and Opus One comes in. They run software to make sure the grid is balanced and enable creative solutions to meet energy demand with clean electricity.
AutoGrid, for example, partners with Sunrun to aggregate batteries among the solar giant’s customers to create a “virtual power plant” that kicks in when power demand is surging.
The energy industry still has a diversity problem
Large energy companies were among the corporations that publicly condemned racism after the police killing of George Floyd in May, but the industry faces steeper challenges than other sectors.
About 8% of the workforce is Black, according to a recent report by the nonprofit Energy Futures Initiative, while women make up between 23% and 32%.
“We’re at the bottom,” said Lee Jourdan, the chief diversity officer at Chevron, about the industry.
There’s also an important history to consider: Pollution from the oil and gas industry has disproportionately affected Black Americans.
But some leaders in the energy industry are making progress, even if they aren’t planning a move out of fossil-fuels anytime soon. Jourdan, for example, said he helped Chevron become the first oil giant to publish data on the racial breakdown of its workforce and has pioneered a handful of other diversity and inclusion (D&I) initiatives at the company.
“I tip my hat off to those individuals that are championing D&I internally because it’s an uphill climb for a lot of organisations,” said Dennis Kennedy, who heads up the National Diversity Council. “We have an opportunity today.”
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