Energy planning and the developing world

To “go green” today is much less a fashion statement as it may have been even five years ago.  Today its not just cool, or hip to go (environmentally) green, one is often expected to do so. I was recently chastised for buying a set of incandescent light bulbs, and was only let off the hook, when I pointed out that my need was rather urgent, and the store didn’t stock the long-lasting enviro-friendly ones. My guilt hit away at me the entire evening, and to be honest, I haven’t been able to install those incandescents.

The search for alternative energy needs continues as the perils of global warming get more real year on year. The development of new energy systems however are determined by choices. These choices are becoming more and more pronounced and articulated.

As technology develops to meet these choices, business need to plan for a future of changing scenarios. Shell, a leading energy company actively plans fo varying scenarios to help them manage their future better. According to the company, scenario planning helps focus on “critical uncertainities. On things we don’t know about which might transform our business. And on the things we know about in which there might be unexpected discontinuities.”

As part of their scenario planning, in 2001 Shell looked at the possible energy scenarios in 2050. They identify two possible scenarios – Dynamics as Usual or The Spirit of the Coming Age.

Dynamics as Usual contends that various competing priorities will limite the adoption of radical technology change. For example, countries like India and China will seek greater economic growth, while developed OECD countries will seek to improve energy efficiency furthering the life of the internal combusion engine. This scenario will aslo see fluctuating government support for renewable energies.

The Spirit of the Coming Age will see ’superior ways of meeting energy needs’ being developed. This, Shell contends, will be a world of experimentation and many failures. Fuel cells appear to be the order of the day in this scenario. Not surprisingly Shell suggests that technology innovation will often arise from niche market fringes, where physical constraints force innovation and consumers are willing to pay a premium. Incumbent suppliers, they suggest, often ignore these markets.

The forecast in both scenarios have interesting implications for energy solutions in the developing world, and by extension the BoP. Personally, I belong to the group that believes that the developing world needs to take more cognizance of environmental challenges, and must rise up to those challenges by seeking out alternative, efficient solutions that do not compromise economic progress. Easier said than done. But here’s where technology support can play a huge role. If we can successfully engage the IITs, IIScs and the innumerable other technology labs in India to provide solutions to our energy needs, we could provide the right kind of solutions for the coming age. Innovation, after all is often borne out of necessity.

Your thoughts?

Read the entire Shell Scenario Report here.