The world faces an escalating energy dilemma known as the “energy trilemma.” Its three sides are: sustainability (clean energy), accessibility (energy security), and affordability (equity). Achieving a balance among these three objectives is extremely difficult even under the best circumstances, but it becomes far more complex on the global level given the huge diversity in energy systems, constraints, and contexts across regions and countries around the world.
This is a global issue that concerns Europe as much as it does sub-Saharan Africa. Some countries are rich in cheap and abundant fossil fuels but struggle to achieve carbon reduction targets. On the other hand, other countries possess extensive clean energy systems but face crises related to citizens’ ability to afford costs. Reaching a comprehensive solution to this global dilemma requires unprecedented international cooperation, in addition to exceptional sensitivity to regional differences in energy realities, opportunities, and challenges.
To contribute to addressing this dilemma at the level of international policies and programs, the World Economic Forum’s Global Future Council on the Future of Energy Technologies is working on building a framework to understand the fundamental factors and stakeholders necessary to provide an enabling environment for a safer, fairer, and more sustainable energy future. And as part of this project, the initiative identified three main factors that lie at the core of the complexities of energy systems, and must be “understood and addressed together for innovation to succeed”:
– Dependence on physical ecosystems (that is, energy demand, supplies, transmission and distribution networks)
– Political, geopolitical, and regulatory challenges (at both national and international levels, including commitments and obligations)
– High risk levels with strong aversion to risk
Physical dependencies represent a major obstacle to innovation in both rich and poor countries alike. In the United States, for example, a lack of grid connections and transmission infrastructure has led to years-long delays for new solar power plants to enter service. In Africa, leaders face a historic challenge represented in “leapfrogging” directly to large-scale clean energy projects at the utility level, bypassing traditional electrification phases, in order to provide electricity to 600 million Africans who still live without it.
As for political and regulatory challenges, they are global in scope and complex even at smaller local levels. Leaders have to deal with local realities and their needs, global supply chains, and compliance with laws and commitments entrenched at multiple and overlapping levels — and often contradictory. Journalists have reported for years that a “maze of bureaucracy” hinders new energy projects from the United States to the European Union. One prominent example is the TransWest Express project in the United States, which took 18 years to obtain approval due to overlapping federal and state bureaucratic obstacles, and is still not expected to enter service before 2030.
And finally, our world’s excessive dependence on energy imposes the highest priority on short-term energy security, even if that comes at the expense of future generations’ ability to enjoy the same necessities and comforts that depend on electricity. Time and again, countries choose immediate grid stability at the expense of decarbonization and long-term stability. What alternative do they have?
According to the World Economic Forum report:
“There is no appetite for taking on operational risk in this sector; this is reflected in most regulations and certainly represents a barrier to innovation. The sector has traditionally been one of the slowest adopters of new technologies.”
But to overcome the paralysis imposed by this “decision tree” that consistently sidelines the future, innovation becomes imperative. Despite Malthusian fears of resource depletion and rising demand, technology and innovations have previously succeeded in overcoming scarcity expectations — and they can do so again.
And although the energy sector is by nature slow to adapt, artificial intelligence is reshaping global energy systems at present. And although its integration represents a major threat to energy systems in the short term due to heavy consumption, experts confirm that it will soon contribute to offsetting its consumption by making the entire world more efficient in energy use.
And the Forum’s report concludes by saying:
“There is a need for new solutions to manage risk, address the energy trilemma, and modernize the system. However, success depends on creating a tailored energy innovation ecosystem that recognizes these unique complexities and operates according to its own rules.”
