Various geopolitical factors such as a surge in populism, competition and productivity issues are creating a “tough backdrop” for the energy transition, Centrica chief Iain Conn has said.
Speaking at last week’s FT Energy Transitions Strategies event, Conn said that his belief was that while globalisation had been good for the world, it had left a lot of people behind and, combined with other prevalent geopolitical and societal issues, had created a difficult environment for the energy transition to take hold.
And while increased digitisation of the energy sector has the potential to aid the transition, Conn said that it was creating its own issues.
“You'd think digitisation and technology would help all of this, but unfortunately regulators can't keep up with it and that's holding innovation back. When you combine all of this with political and societal pressures, it's a pretty tough backdrop to conduct an energy transition. And inevitably bad decisions get made,” he said.
While Conn didn’t embellish on the “bad decisions”, he did reserve particular criticism for the looming energy price cap, arguing it to be a bad idea and one that has demonstrably had negative impacts in other markets where it has been introduced.
Conn went on to state his belief that the energy transition is being driven by three key trends, namely increased decentralisation of generation, a seismic shift of power and influence back to consumers, and digitisation, which Conn said was “spinning the whole thing up”
Those trends have made Centrica pivot back to its core business of energy supply services and away from centralised generation, and also invest in acquiring new capabilities, which Conn pointed to as an integral step in the company’s new strategy.
Over the last two years Centrica has sought to strengthen its distributed energy division through investments in or acquisitions of blockchain specialist LO3, AI start-up Grid Edge, CHP developer ENER-G and energy trading firm Neas Energy.
This has been coupled with a range of notable projects and trials it has kickstarted in the distributed and decentralised energy fields, including the local smart grid project in Cornwall and a number of battery storage facilities which are at various stages of development.