Serhii Shakalov

Slowly and confidently - towards the energy transition

In progress or already completed?

The concept of «energy transition» can be considered either as a process or as a result. If we say that this is a process, then the whole world is involved in it. Somewhere through economic levers, as solar electricity is cheaper than any other, somewhere because of value-based and environmental reasons. If to perceive the energy transition as a result, I still do not see any serious example of a country where the transition to renewable energy would be fully implemented. The thing is the energy transition is not just what resource you get the electricity from in your socket. This is a complex issue. This includes the type of car you use, if it is electric - then from what sources you charge it. How do you heat your home or office?

But apart from the choice of treating the energy transition as a process or a result, we should conceive it as a goal. One should bear in the mind: yes, we are moving to 100% renewable. For instance, mentally I am a person who has already made this energy transition in my head. But I am moving gradually to it. In particular, there are 2 cars in my family, one electric and the other diesel. The next car I buy will definitely be an electric one. Take my house – there are no solar panels now. But next year I will install a power plant in the house, which will partially replace electricity from the grid, 90% out of which comes from non-renewable sources.

Energy transition is a rather gradual action, I am against radical methods. Why? Because it can lead to economic collapse. For example, I say: «From now on, I will use only «green» energy». Then I have to invest in the complete energy independence of my house: not to use gas, not to use electricity from the grid or to be sure that the electricity in my grid is produced from «green» sources. Next, I have to use only electric vehicles. And this applies not only to cars and trains, but even to aircraft, although electric aircraft are now almost non-existent. And there is no such that could, by the way, transport me to America at all. That is, technologically it is still not possible. But gradual steps are possible and necessary. They have to be ambitious and pretty confident. I am absolutely convinced that with the desire of the whole world, step by step, the energy transition can be completed somewhere in 2040-2050. If this is really done by the whole world and with investment of all available resources in this energy transition.

Ecology and economics

There are two parameters. The first is ecological. We need to realize that ecology is of utmost importance, and we all see climate change outside the window. Radical temperature fluctuations break all temperature records almost every week. What will it lead to, what are the consequences? I don't know… There is not enough precipitation at the moment. And if there is, then it is small, infrequent - accordingly, the climate is changing, as a result the level of desertification will change. In a little while Mykolaiv and Kherson regions may turn into deserts. The climate is changing, air currents are changing, the average temperature is changing. It is all interconnected.

Another aspect is financial and economic. Electricity from renewable sources is cheaper than from fossil fuels. This is an axiom. The only question is in scaling. How to replace fossil with renewable energy quickly and least costly? Here are questions for technicians and engineers. Those who complete the energy transition the fastest and switch to renewable sources will benefit. The countries that do this first will take advantage the most. The world is currently discussing the introduction of a global CO2 tax. That is, if you produce goods using fossil sources, you must be prepared for the fact that you will have to pay additional tax. If you destroy the world- then pay. After all, this money is needed by those who do not destroy it. Because the world is being modernized. All this encourages global manufacturers to switch to renewable sources. This is an economic lever that is applied due to environmental problems. The world community is introducing this tax in order for companies to switch to «green» energy as soon as possible and thus reduce CO2 emissions. That is, you will not import products into the European Union without a «green» certificate. And if you import, you will pay an additional tax.

After the transition

Talking about the energy system of Ukraine, over time and gradually nuclear, thermal, coal, gas power plants should be excluded from it. We should not use fossil fuels. Solar, wind power plants, then - biogas and hydropower should be the foundation for the energy system. This will allow to create a decentralized energy system. There will not be large power plants. Generation must be distributed, i.e . each building is a power plant. Thanks to this, we will be able to convert the whole country into a power plant. An accident in one part of the country will not affect another part, because everything is distributed and losses are minimized. After all, the delivery of energy from the generation point to the consumer is a loss. If the power plant is located close to the consumer, these costs will be much lower. Distributed generation throughout the country will be stable, but at the same time it must be, so to say, «smart». Smart grid. It must understand the consumer and be able to control the consumer. This is what is called a «smartgrid». For example, a kettle is a consumer. Microwave, TV, washing machine – they are all consumers. There is no difference for a washing machine when to be switched on - at 10 p.m. or at 11 p.m. Technically for you, as a consumer of laundry washed in this machine, there is also no fundamental difference. But for the network there is. This is because electricity at different times does not even have a different price, but a different level of demand. In particular, there is currently much more energy at night than needed. Therefore, many power plants need to be shut down at night. At the same time, consumption increases sharply in the morning and evening, especially in winter, when there is little daylight. Then the need for electricity is bigger, and the cost of this energy is higher. At night, when there is an excess of energy, it is much cheaper. The same may be true for end users when the system, the internal smart grid, realizes that, for example, at 11 p.m. the electricity price will be cheaper due to the presence of surplus and lack of deficit. Therefore, the machine itself, if programmed, will turn on just when the electricity is the cheapest. Thus, the entire Ukraine as a group will be balanced. That is, these «gaps», the so-called «duck curve» - will be more equal. The difference between the minimum and the maximum load will decrease. Because the bigger the difference is, the harder it is for the electrical system. Less is better. The average price of electricity will be cheaper. It is a smartgrid system where consumers themselves control, switch on and off according to the best situation the generation supplier has.

We must comprehend that if now in our situation the cheapest electricity is at night, then in the future the cheapest electricity will be during the day. Because there will be many solar power plants operating during the day, and therefore there will be plenty of electricity. And the evening will always be the most expensive, because people consume the most in the evening, when the sun no longer shines.

It was not an insight for KNESS. It's just embedded in our values. We want to be innovative. We want to be helpful to this planet, this country, this city. The fact that it is good not only for us, but also for everyone around is crucial for us. Actually, we have gradually started following the «green» path since 2017.
Where does the transition begin?

The energy transition is carried out by individual cities and individual companies, even individual buildings. This is all one ecosystem. But the decision is in the leaders' minds. If the manager is conscious, he/she will perform a «green» transition as soon as possible. Unless he/she is conscious, they will stick to the previous business models, to previous infrastructure decisions, and in some time the company, city or country will become uncompetitive. First and foremost, changes must take place at the consciousness level.

It is difficult to be separated, because the energy transition is not just the current in the network and the socket. There are still a lot of aspects: heating, transport, etc. We can do this in stages, but countries need to stimulate their businesses and transport to switch to «green» energy. If the enterprise shuts down because its products are uncompetitive, the country will not receive taxes. Therefore, it is one ecosystem. They should stimulate each other: both business and the state. This is the strategy at its best.

Energy transition in the company

There are examples of insights in world history. Isaac Newton, who invented the law of gravity by the apple case, or Amerigo Vespucci, who realized that the new lands were not India, but another continent. There are such examples, but most often in people's minds there is a gradual evolution of thinking. This evolution took place in the minds of employees and management of the group. Surely, not all at once. But we are gradually moving forward towards the goal. We are evolving. Our thinking evolves on the basis of our values.

There is no limit to perfection. But we also cannot resort to some unconstructive things. For example, we may decide, «From now on, we will build solar power plants using only electric vehicles charged with renewable energy». This would not be a very constructive affair, because neither the infrastructure of charging stations, nor the supply of electric trucks and many other necessary factors for this exist, or they are still economically impractical. But in time, it will be quite possible to do so when such opportunities are created by us and other conscious businesses.

Scenarios for Ukraine

The scenario of «continued support of obsolete energy technologies» is losing. The world's economic leaders are pursuing innovative development and fossil fuel replacement. Staying out of the energy transition is economically disadvantageous for Ukraine. As a consequence, the country will be uncompetitive.

The scenario of «energy transition» is logical, inevitable. In fact, it is already happening. In this scenario, traditional large power plants are gradually being replaced by solar and wind power plants with support from new related technologies that did not previously exist in power systems. Long-term trends in transport, life and services are more specific: the use of energy efficient technologies in construction, the widespread use of electric vehicles, electrification of passenger and freight transport, the use of heat pumps.