Greentech: Where is the energy transition headed in the United States?
As part of the recent Global Climate Action Summit in San Francisco, L’Atelier BNP Paribas and Bank of the West gathered greentech experts to discuss recent trends.
I had the pleasure of hearing Benjamin Lesage, senior analyst at L’Atelier BNP Paribas, an innovation studio at our parent company, talk about the major greentech developments in the U.S. energy sector. His report, “Greentech: Will Digital Technologies Help Accelerate the Energy Transition?” takes a deep dive into U.S. trends, players, and the role digital technology in the energy transition.
After suffering through the 2008 financial crisis, greentech startups are now starting to surf the digital wave, Lesage told attendees at the DocuSign-hosted event. But fuel consumption, as a fraction of the energy sector, has decreased by only 5% since 1990. “There is definitely progress to be made,” he said.
The good news is that there are major opportunities, although challenges remain. The World Economic Forum estimates that more than $2.4 trillion worth of investments will be needed to drive the energy transformation of electricity production over the next decade.
“Technological advances related to the Internet of Things, artificial intelligence (AI), and blockchain promise to accelerate the energy transition in ways that has never been possible until now,” he noted.Three energy transitions
The United States has already seen three distinct energy transitions, namely, movement from wood burning in 1870 to coal dependence in 1900 to use of oil and gas by 1960, according to Lesage. U.S. consumption of renewable energy, defined as hydroelectric, wind, or solar, was 10% of total energy consumption in 2016. A year later, 17% of all electricity produced in the United States came from renewables, according to Lesage.
There are two main barriers to accelerating renewable energy sources. First, energy infrastructure is outdated. “You would need to spend several trillions of dollars to upgrade and modernize the grid,” he said. “In its current condition, it just isn’t ready for the technical and storage challenges of renewable sources.”Reconciling business and the environment
The second challenge is reconciling business and the environment. In other words, older non-green energy sources are well-established in the United States and have strong support. “Better access to digital data could be a game changer,” Lesage said.
How could digital technology spur renewable energy production? By installing “smart” meters we could develop more intuitive applications for energy storage. In addition, AI could be used to study human behavior and help people with their decision-making. For example, smart homes might help optimize residential energy consumption.
In our daily life, thanks to greater transparency and access to data, one could imagine a pay-per-watt model, which would encourage consumers to use renewable energies, he added.
Applied to the field of energy, Lesage sums up these technologies by the “4Ds”: decarbonization, decentralization, digitalization, and democratization of renewable energies.
For more information, download the report “Greentech: Will Digital Technologies Help Accelerate the Energy Transition?” Or see our related infographic.
To learn more about Bank of the West’s commitments to accelerating the energy transition, visit bankofthewest.com/change.