The two previous articles in this series described how previous energy transitions have occurred, and set out a thought experiment on what might be different if Planet Earth was one country, which I named ‘United Nation’. This was not intended to be a specific scenario but rather to explore how the energy sector may have evolved differently. So, the big question is, how might we apply some of this thinking to the real world today?

Here are a few areas where I believe we could and should make a material impact.

First, the cheapest, most secure and lowest-carbon form of energy is that which we don’t use. And here the Global North in particular is guilty of not setting far higher standards for the built environment. Governments have an important role to regulate, but the private sector can play a critical role too; for example, providing lower-cost mortgages for energy efficiency measures. Yes, it’s the right thing but it’s also financially prudent: a better insulated home has lower running costs and therefore a lower risk of default.

Second, we need to fundamentally think differently about how we measure and consider energy. According to the Energy Institute’s Statistical Review of World Energy, in 2023 the world used 620 EJ (exajoules) of primary energy. However, if you look at how much of this energy is actually used to provide light, heat and mobility – it’s a fraction of that. The Lawrence Livermore Laboratory has created some fascinating Sankey diagrams that show for the US around 65% of energy is wasted, largely as heat. Applying this factor to global energy demand, we would only need 220 EJ.

To achieve this we would need to electrify pretty much everything that can be electrified. I recognise this is far easier said than done. But where governments can make a difference now is ensuring that regulations around electricity pricing are fair.

For example, in the UK, environmental levies are placed on electricity rather than gas – driving unit energy costs around three times more. As societies, we must acknowledge that we will need new transmission and distribution infrastructure. It would certainly help if pylons were made to look prettier (something National Grid is working hard on) but we are going to have to accept (and be incentivised) to have more of this in our backyards.

Third, we need the global financial system to unlock competitive capital to the Global South, which, according to the International Energy Agency, gets less than 15% of investment into renewables. The Statistical Review highlighted that in 2023 energy consumption fell in the most energy-poor continent. This should be viewed as a global embarrassment. When I visit and meet people from Africa I often hear: ‘We can’t decarbonise until we carbonise’.

It’s not a binary decision on whether the continent’s 54 states and 1.8 billion people should grow fossil fuels or renewables, but it would be a real shame if they followed the carbon-intense route of the Global North if there were a quick, cheaper and cleaner way to bring energy to its vast populations. Global financial institutions, including multilateral development banks (MDBs), need to do far more to accelerate access to the energy on the African continent.

Fourth, we need clear merit orders for the problems and the solutions – both by sector and temporally. Yes, we need a range of solutions but not where the opportunity cost of pursuing one option slows the deployment of another. It is critical that we prioritise green electrons and green molecules where they have the biggest impact. For example, the focus on the hard-to-abate areas sometimes overshadows the easier, low-hanging opportunities.

Whilst we should not let any sector off the hook, with aviation accounting for just over 2% of emissions, prioritising coal phase out or tackling methane emissions would have a far greater impact on climate change in the short to medium term. It is important that we focus on solutions that we may need in 20 to 30 years, but not at the cost of poor capital allocation and government incentives today. We need to identify the problem and then the solution, not the other way round.

Equally there is a merit order in which we should produce and consume fossil fuels: gas over coal and prioritising sources which have the lowest production emissions. This would create the case for increasing production in some regions to displace the most carbon-intense sources – unpalatable as that is to some.

Fifth, there is a huge prize in better connecting energy systems – physically and digitally. Interconnectors offer the potential to both connect abundant supply with demand centres and to shift demand across time zones. And digital solutions will better connect demand and supply.

We have built our electricity systems based on the redundancy of everyone being able to use maximum demand at the same time. Whilst this might be desirable it may not be practical. Of course, people should be able to have power when they need it, but is it reasonable to assume on a windless December evening I can charge my electric vehicle (EV), run a heat pump and numerous appliances all at once – at least without paying a premium? We need to reimagine the energy system from supply led to customer led.

And finally, governments need to get clear on what their role is and what it isn’t. It needs to understand where the energy sector needs competition, where it needs collaboration, where it can act as a catalyst to kickstart a new industry and where only the balance sheet of a state is sufficient to take on the scale and risks of some of the required investment.

For example, industrial clusters will not take off without appropriate support from government – something which is now happening in the UK and US. And the prospect of nuclear tripling by 2050, as set out in the COP28 Ministerial Declaration, seems highly challenging based on recent track record without greater government intervention. Nuclear, small modular reactors (SMRs), carbon capture, use and storage (CCUS) and fusion need the clarity of clear regulatory frameworks, greater standardisation and government funding to scale at the pace we need them to. I know each of these technologies has its sceptics but tackling the transition without them will be far harder.

We have built our electricity systems based on the redundancy of everyone being able to use maximum demand at the same time – whilst this might be desirable it may not be practical.

Clearly, transitioning a world of 205 countries is going to be more difficult and take longer than doing the same for one ‘United Nation’. But if you were fearing I’d wrap up this series of articles with an unrealistic call for world government, fear not.

This thought experiment has shown the huge benefits of agreeing a vision and coordinating action compared to a contested, piecemeal approach. But, in fact, I believe progress in all of these areas could be accelerated by pursuing enhanced structures and collaborations at all levels across our world of nation states – at the international level (UN COP process), at regional levels (EU, Gulf Cooperation Council, African Union, ASEAN etc), between financial institutions and cities, across societies (via NGOs) and through industry and technical fora like the Energy Institute itself.

But it won’t happen on its own. It requires as many people, organisations and governments as possible to acknowledge that we are all residents of one planet, and benefit from its riches as well as share the responsibility for looking after it.

• Part 1: ‘Lessons from previous energy transitions’. In the first of the three-part series exploring the implications of the recently published Energy Institute Statistical Review of World Energy on the pace of the energy transition, Energy Institute Chief Executive Nick Wayth discusses how energy transitions have occurred historically; what might be the same this time and what might be different. 
• Part 2: ‘What if we imagined Planet Earth as one country?’ In the second of his three-part series on global energy transition, Nick Wayth considers the climate costs of the lack of unity in global energy policy, via a thought experiment.