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The future of energy: innovation, technology and geopolitics

Roma, 03/07/2018, Aspenia

The vast energy transition under way goes well beyond ratcheting up the use of renewables, as much as that is essential for obvious environmental reasons. The shift in that direction is currently a gradual one that, however, in the coming years is going to reach a watershed point at which, once the cost of new sources drops considerably below that of hydrocarbon products, the changes already ongoing will speed up. Global commodity chains are still closely linked to energy prices, and countries more dependent on exporting raw fossil materials are going to be forced to modify their investments, resulting in a significant impact on the world banking system.

Innovation in the field of energy takes place at various levels simultaneously, resulting in a truly “disruptive” combination: new digital technologies (with the growing role of artificial intelligence and blockchains); “smart grids” that permit an improved and increasingly steady coordination between supply and demand; greater storage capacity (batteries of varying sizes) that will make it possible to overcome the problem of discontinuity among renewable fonts; the availability of low-cost abundant, clean energy (low environmental impact) for people and businesses. With the push toward digital technology generating more rapid transformations, it is not easy to accurately predict the timeframes and means of future efforts; but the direction is quite clear, as is its influence on the daily life of anyone who is going to be using electrical power – i.e. an unprecedented number of persons.

Geopolitical factors are undoubtedly complicating the energy transition. This can be seen, for example, in the United States’ achievement of considerable energy autonomy in the space of just a few short years – thanks to private initiative and not government intervention; in the persistent use of energy as a sort of “weapon” by major fossil fuel producers; and in China’s dynamism on world markets and as well as in technological investments aimed at ensuring those sources necessary for its own accelerated growth. Nevertheless, major geopolitical changes are imminent: renewable sources are potentially ubiquitous, and much less influenced by geographic elements, in addition to allowing for decentralized facilities and therefore a lower concentration of political power as well.

Government intervention and regulatory aspects, both national and international, remain a frequently decisive factor. Italy, which continues to be closely bound to the European energy regulatory and infrastructure framework, offers some undeniable strong points and some examples of true technological excellence, but suffers from a series of delays in the implementation of planning strategies and infrastructure undertakings. An inescapable prerequisite for advancement in sustainable innovation is a good balance between public and private action.