SET - WP 1Preliminary Notes on Megatrends

Jukka-Pekka Bergman, Igor Dukeov et al.

14.9.2016

The purpose of the study

The study examines diversity of the megatrends that were discussed in different global future reports and shows the key elements of the megatrends.

The key aim of this study is, firstly, to understand the global megatrends and how they will frame the future development of the energy sector in Finland.

Secondly, to enhance leaders’ ability to recognize patterns of behavior that may differ from conventional view spread in their operational environment.

The Global

Future Reports

1. World Economic

& Social Survey

2011 (UN)

2. The European

Environment —

State and Outlook

2015 (EEA)

3. Outlook on the

Global Agenda

2015 (WEF)

The Energy Future

Reports

1. New Lens Scenarios

– A shift in

perspective for a

world in transition

(Shell)

2. Energy Climate and

Climate Change (IEA)

3. Nordic Energy

Technology

Perspectives:

Pathways to a carbon

neutral energy future

(Norden)

4. Benefits of Carbon

Neutrality in a Rapidly

Changing Business

Environment (Sitra)

5. Towards the Third

Industrial Revolution

(Neo Carbon Energy)

6. Energy Roadmap

2050 (EU

Commission)

7. World Energy

Scenarios (WEC)

Grouping

megatrends into

specific spheres:

Globalization,

Ecosystem,

Urbanization,

Climate,

Technology,

Energy,

Pollution,

Economics

Opportunities and

threads for Finnish

economics,

technology, and

society

SWOT matrixWeaknesses and

strengths of

Finland

Alternative

strategies

for energy

development

The process of the study

Selected Globally Oriented Reports

1. UN World Economic and Social Survey 2011

2. EEA 2015 Megatrends

3. WEF Outlook on the Global Agenda 2015

4. SHELL Paradoxes

5. IEA - International Energy Agency

6. NORDIC Energy Technology Perspectives

7. Sitra, 2015

8. Neo Carbon Energy Project, VTT

9. Impact assessment of global megatrends (EEA), 2014

10. Megatrends in the global energy transition, 2015

11. Top 10 Mega Trends and Their Impact on Business, Cultures and Society, 2014

12. The EU - Energy Roadmap 2050, The EU - European Commission 2011

13. Meetings and Conventions 2030: A study of megatrends shaping our industry, 2013

Globalisation and Internationalisation

“Peak Everything” – Shortage of Resources

Urbanisation - City of the Future Demographic Change,

Feminisation and Diversity Sustainable Development Mobility of the Future Security and Safety

German Convention Bureau

Increasing global divergence in population trends Living in an urban worldDisease burdens and the risk of new

pandemicsAccelerating technological change –

racing into the unknown Continued economic growth? From a unipolar to a multipolar

world Intensified global competition for

resourcesDecreasing stocks of natural

resources Increasingly severe consequences of

climate change Increasing environmental pollution

load Environmental regulation and

governance – increasing fragmentation and convergence

The Swedish Environmental Protection Agency

The end of the fossil era has begun The energy future has already

begun The energy future is renewable The energy future is decentralised The energy future is digital The Future of Energy

WWF Germany and LichtBlickSE Urbanization: Mega Cities, Mega

Regions, Mega Corridors, Smart Cities E-Mobility Social Trends: Geo Socialization,

Generation Y and Reverse Brain Drain SPACE JAM: Congested Satellite

OrbitsWorld War 3: Cyber Warfare RoboSlavesVirtual World: Fluid Interfaces

and Haptic Technology Innovating to Zero ! : Zero

Emission Technologies Emerging Transportation

CorridorsHealth, Wellness and Well-Being

Frost & Sullivan

SMART ENERGY TRANSITION Megatrends impacting on the Energy Industry

Shifting to renewable energy Transforming the building stock of

every continent into green micro-power plants to collect renewable energies on-site

Deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies

Using Internet technology to transform power grid of every continent into an energy internet that acts just like the Internet (when millions of buildings are generating a small amount of renewable energy locally, on-site, they can sell surplus green electricity back to the grid and share it with their continental neighbours)

Transitioning the transport fleet to electric plug-in and fuel cell vehicles on a smart, continental, interactive power grid.

Neo Carbon Energy:Rifkin’s five pilars

•Deepening income inequality•Persistent jobless growth•Lack of leadership•Rising geostrategic competition•Weakening of representativedemocracy•Rising pollution in the developingworld•Increasing occurrence of severe weather events•Intensifying nationalism•Increasing water stress•Growing importance of health in the economy

WEF Outlook on theGlobal Agenda 2015

The green economy as the new paradigm

UN World Economic and Social Survey 2011

Decarbonisation is possible – and can be less costly than current policies in the long-runHigher capital expenditure and lower fuel costsElectricity plays an increasing roleElectricity prices rise until 2030 and then declineHousehold expenditure will increaseEnergy savings throughout the system are crucialRenewables rise substantiallyCarbon capture and storage has to play a pivotal role in system transformationNuclear energy provides an important contributionDecentralisation and centralisedsystems increasingly interact

8 EU - EUROPEAN COMMISSION 2011

IEA - International Energy Agency

The use of low-carbon energy sources is expanding rapidly, and there are signs that growth in the global economy and energy-related emissions may be starting to decoupleGrowth in global energy-related GHG emissions slows, but there is no peak by 2030 in the INDC Scenario

The prosperity paradox The connectivity paradox The Leadership Paradox

SHELL Paradoxes

Climate Change The Future of Energy Smart is the New Green The Future of MobilityUrbanization The Future of Infrastructure

Sitra 2015

Climate change Energy-related emissions

NORDIC Energy Technology

Perspectives

Diverging global population trends Towards a more urban world Changing disease burdens and risks

of pandemics Accelerating technological change Continued economic growth? An increasingly multipolar world Intensified global competition for

resources Growing pressures on ecosystems Increasingly severe consequences of

climate change Increasing environmental pollution Diversifying approaches to

governance

EEA 2015 Megatrends

1. GLOBALIZATION

Globalization requires scalable personalized solutions

Globally, small countries as Finland can be seen having a “mindset of personalization” creating solutions for small populations

We cannot beat our competitors in “bulk” products like solar panels, heat pumps, and wind turbines, but in...

2. URBANIZATION

Hot Spots of Energy Consumption and mobility/transportation

The biggest industrial areas consume the largest amount of energy. But, an urban area often is not the best one for energy generation.

Small-scale areal renewable energy systems could offer opportunities to secure the increasing need for energy in urban areas where cannot build (anymore) large centralised systems.

Finland should prioritize R&D activities into the short distance energy transmission, smart gridding, and energy storage

3. ENVIRONMENT/CLIMATE

The changes in global ecosystem generates local level extreme environmental events.

Finland have expertise in arctic climate and environment as well as in forest environment and related chemical processes.

Mobile areal energy systems and energy efficiency solutions, special equipment for extreme conditions as robotics and energy storage

The key messages of megatrends?

4. TECHNOLOGY/ENERGY

Technology development is fastening continuously in ICT, nano-, and biotechnologies along with the growing need in renewable energy generate scalable niche innovations in, for example

analysis of big data from machines, security of global energy networks, optimization of production processes, personalized energy services, robotic control of energy generation and consumption.

5. ECONOMICS

Global economy is diversifying and existing institutions are struggling with their roles in relation to new actors

These changes requires new approach in regulation and governing structures

Finland could take very active role in those activities the development of new “world order”

We have an opportunity to learn from the near history how to influence global process for own benefit, e.g. NMT, GMS, and green certificate processes.

The key messages of megatrends?

SET Delphi Study 2016Driving Forces in Energy Systems

THE MOST RELEVANT DRIVING FORCES FOR FINNISH ENERGY SECTOR:

1. EU and international regulation

− Transition to renewable energy systems, incentives

2. Innovations in the field of energy production, transmission, and storage technologies

− Smart grids, heat pumps, wind power, solar panels, energy from waste

3. Innovations on the field of energy efficiency

− Buildings, ICT services, energy intensive industry

4. Digitalization and automatization of energy systems

− Digital services in energy efficiency, role of prosumers

5. Global agreements in Climate Change

− CO2 emission restrictions globally and regionally

Preliminary Notions on Basic Scenario 15.6.2016

Desired results for Finland are set to be

the EU Targets ?

Energy and Climate StrategyBasic Scenario and the key assumptions

Passive or Active Approach

Desired Results for Finland are set to be

the EU Targets

The Given Future for Finland

The Future Global OperativeEnvironment Analyzed by the EU

Benefits for Finland as a side effect?

The EU Targets as a side effect

Benefits for Finland

The Future Global OperativeEnvironment Analyzed by Finland

Passive or Active Approach

𝒇 𝑬𝑼 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒚 = 𝒇 𝑬𝑼 𝑭𝒖𝒕𝒖𝒓𝒆 + 𝒇 𝑭𝒊𝒏𝒏𝒊𝒔𝒉 𝑨𝒄𝒕𝒊𝒐𝒏𝒔 + 𝑭𝑰𝑩𝑬𝑵𝑬𝑭𝑰𝑻𝑺 = 𝑬𝑼 𝒕𝒂𝒓𝒈𝒆𝒕𝒔

𝒇 𝑭𝑰 𝑺𝒕𝒓𝒂𝒕𝒆𝒈𝒚 = 𝒇 𝑮𝒍𝒐𝒃𝒂𝒍 𝑭𝒖𝒕𝒖𝒓𝒆 + 𝒇 𝑭𝒊𝒏𝒏𝒊𝒔𝒉 𝑨𝒄𝒕𝒊𝒐𝒏𝒔 + 𝑬𝑼 𝒕𝒂𝒓𝒈𝒆𝒕𝒔 = 𝑭𝑰𝑩𝑬𝑵𝑬𝑭𝑰𝑻𝑺

The work continues…