Generation Y’s views on the future of energy in Europe (part one)

In December 2013, Article 13 and SAMI Consulting hosted a workshop which brought together industry and policy experts and representatives of Generation Y (those born between 1980 and 2000 – also known as “digital natives”)  to examine the future of energy in Europe (the drivers, the trends and the bends).

In this, the first of two blog posts, we describe the key drivers for change identified at the workshop, and outline the dimensions of future scenarios. In the second post, the scenarios are described in more detail and some summary conclusions attempted.

The future of energy in Europe – what are the drivers of change?

If we consider the future of energy in Europe towards 2020, 2030 and 2050, there are a whole host of drivers which could and will influence the decisions and actions taken. For instance, governments will come and go, public opinion will fluctuate and technology will open new previously unimaginable avenues. Meanwhile society will change, witnessed both in the shift in individual and societal values and the adoption of new technologies, e.g. the iPad. Whilst all of these drivers are linked to future energy production and use, some have the potential to become significant game-changers. For example, the uptake of 3D printing could replace the demand for energy from the factory floor (during working hours – and possibly powered by factory-owned solar energy) to the home user (at peak hours and powered by the grid).

The question, however, is which of these trends are forecastable? What can be predicted and what is simply unpredictable? It is by getting to grips with these uncertainties that we can start to build an understanding of the different future energy scenarios facing Europe, and in turn the different factors individuals, corporations and governments must consider. Below are some of these drivers, and what they could mean for energy, and their perceived ‘predictability’.

Amongst the drivers the workshop thought more predictable are:

a)      Growth of the middle class: Around the world we are seeing the continuing growth of the middle class with the associated increase in disposable income. This is not only prompting an increase in consumption, but also changing perceptions, values and behaviours. For instance, as societies move from ‘traditional’ to ‘modern’, notions of “purity” are replaced by the impact of “harm” as critical factors in influencing decisions taken.

b)      Globalisation: A trend of this century and the last is that the world is, and will continue to become, ever more interactive and connected, with the convergence of economies, cultures and even societal norms.

c)       Urbanisation: In 2007, the world reached an important milestone when it was calculated that more humans lived in urban than in rural environments. This pattern of urbanisation seems set to continue for the foreseeable future.

d)      Sharing information: Whilst cities will grow and society will become ever more interconnected and technologically advanced, the pace of this change is far from certain. Indeed, even Generation Y, the digital natives, who have grown up accustomed to sharing information, amid concerns of personal data and privacy, express mistrust towards technology and the pace of technological change.

e)      Travel: Another area of uncertainty is travel. Whilst there is a consensus that business travel will remain a necessity – despite advances in enabling technologies such as video conferencing – there remains the question whether, if the market were hit by higher prices (from carbon trading schemes, for example), personal travel would continue to increase or decline.

But the two factors Generation Y and industry representatives thought were most unpredictable were:

–          Public opinion:  The belief is that the public do want renewable energy, but it is less clear the extent to which they are willing to pay for it. The predictability of public opinion may be influenced by future blackouts but would the switch in public opinion only decisively occur once ‘the lights go out’? Meanwhile the ‘third culture’ nature of Generation Y raises a further variable: specifically the growing number of individuals who no longer identify with a specific culture or nationality, rather thinking of issues on a global level. Empowered by technology and social media, this international perspective may lead to public opinion in one country increasingly being projected globally.

–          Security of energy: It was agreed that energy availability and security will remain a Government priority, yet this is set against the conundrum of short to long-term decision making – threatening the extended investment programme required for new energy infrastructure (including nuclear and renewables). The situation is further complicated by geo-political developments such as the re-integration of Iran into the global economy and the US becoming an energy-exporting nation through its development of shale gas.

In our next post, we explore the four scenarios that can be created from the answers to the questions:

1. Will energy be affordable and the supply secure or not?

2. Will public opinion allow new build and renewables?

 

Written by Jim Ormond, Article 13 &  Gill Ringland, SAMI Consulting

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