The Hillary Symposium

From the programme: Social entrepreneur Jeremy Leggett is founder and Executive Chairman of Solarcentury, a leading European solar energy company, and founder and Chairman of SolarAid, a charity set up with 5% of Solarcentury profits. SolarAid (2006-present) teaches young Africans to make, sell, and use solar lanterns. It has raised several million pounds from individuals and organizations, and its Patrons are Cate Blanchett and Ian McEwan.

Leggett is also a founding director of the world’s first private equity investment fund for renewables, run by Bank Sarasin (New Energies Invest AG, 2000-present) and is an Associate Fellow at Oxford University’s Environmental Change Unit (1998-present). He was also a member of the UK Government’s Renewables Advisory Board from 2002-6. He has written several books, including The Carbon War (1999) and Half Gone (2005). In a first career as a geologist, he researched the history of oceans, explored for oil, and worked on oil source rocks funded by BP and Shell among others (1978-89, while on the faculty at Imperial College). Increasingly worried by global warming, he left to become an environmental campaigner (1989-1996, with Greenpeace International), during which time he won the US Climate Institute’s Award
for Advancing Understanding.

Coming to the view that successful green businesses were badly needed in the global struggle to cut greenhouse-gas emissions, he set up Solarcentury, which has expanded into the fastest-growing UK private energy company of any sort, according to the 2008 Sunday Times Tech Track 100. The company has won multiple awards for innovation and sustainability, and become a magnet for talent. Entrepreneur of the Year at the 2009 New Energy awards, Leggett has been appointed a CNN “Principal Voice” (2007) and been described in the Observer as “Britain’s most respected green energy boss.” He is convenor of the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES), members of which include Virgin, Scottish and Southern, Arup, and Yahoo.

Leggett’s new book ‘The Solar Century’ will be published mid-2009.

Jeremy Leggett is deeply honoured to be the first Hillary Laureate and is presenting virtually on the subject of the ‘Triple Crunch’.

We are living through a triple crunch: the financial, carbon, and oil crises. He’s not going to talk much about climate change itself, but more about our responses to it.

Finance

He shows a cover from Fortune magazine with an executive in handcuffs and the headline, ‘Sending wall street to jail’. This really captures in one image the context in which we’re having to deal with the other problems.

We look back on utterances by chief executives like ‘As long as the music is playing, we’ll still dance,’ (accompanied by a slide of a deposed chief executive) — we have to learn from this.

Branding — the importance of brands to corporations — shows a satirical car ad that says ‘You wouldn’t buy our shitty cars, so we’ll be taking your money anyway’. Shows the entrance to an AGM in Luxembourg, with guards in riot gear (gas masks, guns, etc). How have large brands become so poorly regarded?

Carbon

But green is hot. He shows a cover of Vanity Fair: Julia Roberts, Al Gore, George Clooney — they’re all dressed in green, and the whole issue is devoted to green. Then he shows an ad from The Economist: a child asking, ‘What did you do in the war against global warming, daddy?’

The average age in finance companies is in the 50s — nearing retirement — but the average age in clean tech companies is late 20s to early 30s. This is the future.

From a climate perspective, we can only afford to burn another couple of hundred tons of carbon — and there’s far more fuel than that available.

Peak Oil

There’s been a common view that there’s so much oil that we’ll have oil forever. Newsweek just a couple of weeks ago had ‘Cheap Oil Forever’ on its cover. October 2008 marked the first multi-company attempt to sound an alarm bell on premature peak oil — 8 companies with a collective worth in the billions. If you’re interested in this issue, it’s worth taking the time to read their report, ‘The Oil Crunch’.

Shows a few charts to demonstrate Peak Oil, and the likelihood that oil availability will plummet sharply, and soon. If the energy industry has miscalculated its asset base the same way the financial industry did, we’ve got a big problem — and he believes they have.

Shows a chart of global production of oil and gas — looks like production should strt to drop sharply in 2010. Shows another chart analysing 800 oil fields field by field, and the drop should begin next year. The gap between what we can produce and what we need based on current consumption is massive. We’d have to seamlessly discover and develop massive fields without any mistakes — and there’s nothing to indicate that will be possible.

We would need the equivalent of six all-new Saudi Arabias within 22 years.

There isn’t a snowball’s chance in hell. If the analysis is correct, we’re looking at the third great global energy crisis, but for many companies it would be experienced as something worse — this time, the producers have to realise that they got their asset assessment fundamentally wrong.

Shows an image of Dubai in 1990 and Dubai in 2007 — this is going to be a big issue.

The Hirsch report, done for the US Dept of Energy, makes pretty similar arguments. Hirsch used to run nuclear fusion programme in the US. Here are the main conclusions from the report:

• Oil supplies and GDP are coupled
• World production has been on a plateau since 2004
• Recession is meaning cutbacks in exploration and development
• This means global GDP will drop
• The lag time for mititation is large
• This means double recession.

Recommendations from Jeremy’s task force:

• Appraise the risk
• Draw up a national energy plan
• There’s no time to wait

The timing of all this is interesting — peak oil means you have to accelerate what you’d be doing for climate reasons. International recommendations:

• There needs to be greater transparency
• Combine multi-lateral efforts
• Accelerate ‘green new deals’

We need a green new deal. We escaped the Great Depression with a New Deal, this is another opportunity to escape a depression with a new deal, but given the confluence of problems it has to be green. Non-green solutions (more motorways, etc) will ultimately deepen the climate crisis.

There is massive economic potential for energy efficiency and renewables: it seems with an investment of GBP1 billion, you can create 20,000-40,000 clean jobs, and in the first year and every year thereafter you’re saving hundreds of millions of pounds.

The negotiations for Copenhagen have been deeply frustrating. Multi-lateral agreements with well over 100 countries is profoundly difficult — especially since one of the major players is dragging its feet and the other is saying they won’t do anything until the first player moves. China and the US have to get their acts together and realise that any new economic wellbeing created through traditional methods will be literally washed away by climate change.

Many countries seem to have emerged from this crisis with nothing more than a desire to get back to the way things were in 2007. It’s a desperate adherence to the old thinking.

His two upside themes of cleantech revolution (shows China’s Solar King). In 2007 more than 10% of all energy investment went into renewables, so you can see where many investors think the future lies, and that’s a trend to work with.

Shows a picture of a solar installation. Although solar is not a magic bullet, it’s his day job. This is the first solar-powered street in cloudy Britain, and will generate all the energy and 1/2 to 2/3 of the hot water required. If you maxed out the energy efficiency in the houses, the solar could provide all of the power needs.

It’s not about payback, it’s about ROI — solar actually gives a better return than a building society or a bank.

Survival trajectory — second positive point — there are oases in the business community where there is real leadership taking place. He’s seen the impact of Walmart’s decision to go zero carbon worldwide on their entire supply chain, and that’s working. That’s effective — we need to see more and more of that.

BP and Shell are re-carbonising — that’s a very depressing story. They’re going after solid-state tar, which requires a lot of greenhouse gas emission to turn it into liquid fuel. But Solar Century are predicting grid parity with this technology in 5 years. At least the oil companies are honest, but it’s depressing.

Lots of people are recognising that we can’t go back to 2007, and that’s encouraging: self-help, peer-to-peer lending, that’s great. But look at other aspects of society — let’s entertain ourselves to death, etc. Put these themes together and we’ve got a battle for hearts and minds, and it’s kind of polarising. It means no matter how effective we are, no one of us can influence this — all we can do is light candles for hope, and it’s the sum of those candles that will make the difference.

On the down side, it’s really depressing that these big companies are able to sit back and say, ‘Sorry, guys, we’ve got to mine the tar.’ He debated live with a guy from Shell (I didn’t catch the name) on BBC World, and the Shell guy said, ‘Look, Shell is not responsible for the way the world uses energy.’ How are they going to look their children, their children’s children in the face and say they did this?

On the upside a small company like Solar Century, they’re working with schools (Solar 4 Schools), and it’s just fantastic work to be doing.

As we go towards Copenhagen, we know what we’re capable of collectively, if we manage to get to a tipping point — that’s what we have to angle towards.

We need a tipping point in renewables.