Volker Beckers is one of five new trustees to join Forum for the Future's board. He spoke with Will Nichols, news editor at Business Green, about his new role.
Volker Beckers left the Big Six energy giant in January 2013 and has since busied himself with a range of roles, including chairman of Albion Community Power, which given its focus on small-scale renewables projects would appear to be the polar opposite of his former role. And this month, the cheerfully convivial Beckers became a trustee of Forum for the Future, the sustainability advisory outfit founded by environmentalist Jonathon Porritt. His goal, once again, is to use the new role to champion the merits of community green energy and distributed power projects.
Beckers explains that part of the attraction of these new roles came with the realisation that the centralised energy model has "reached its natural end", with market capitalisation for the largest energy companies plummeting almost as fast as consumers' trust in them.
"The companies who are investing [in renewables] today will be winning companies who succeed"
Energy firms "need a different approach", he says, if they want to win back consumers in a new market where households can produce their own energy via solar panels and wind turbines and may soon be able to store it in advanced batteries or electric cars. "The industry is a century old and has always relied on growing further each year, so it finds it difficult to change," Beckers reflects. "[But] I think some [companies] have understood that the centralised, fossil fuel system will soon reach its end."
To hear such views espoused by a leading corporate executive is no longer as surprising as it once might have been. Not least because a number of leading financial institutions have recently started to deploy similar arguments. For example, Citigroup has predicted solar power will reach grid parity in many countries across the world by the end of the decade, while this week UBS said big, centralised power stations are likely to be left redundant by 2025 due to a shift towards green self-generation.
However, while Beckers acknowledges many energy companies now understand change is necessary and "say the right things", he is less convinced transformation is being pursued at the scale required. "The change [needed] is more dramatic than many realise," he argues. "The market capitalisation of energy companies across Europe peaked in 2008/9 and since then they've lost between 60 and 80 per cent of their market value. That's not just because of the financial crisis - it's also because investors are sceptical about the strategic direction of these companies."
Partly, this reticence may be down to governments wavering over energy policy, especially support for renewables, which has been pared back across Europe as technologies such as wind turbines and solar panels have plummeted in price. "Policy change means if [companies] put too many eggs in one basket they may be caught out," Beckers counsels. "We are going in the right direction in so far as the energy mix is concerned, but we're not sure what the optimal energy mix should look like going forward."
However, the direction of travel towards low-carbon generation is beyond doubt, Beckers believes. "Energy companies will have to move to more green generation," he predicts. "It's a diversified picture across Europe but in the last 10 years support of renewable energy has changed dramatically. The companies who are investing today will be winning companies who succeed."
"Community-scale energy projects are something that should definitely be part of the energy system"
If Beckers is optimistic about the outlook for renewables, he remains sceptical that shale gas in Europe can replicate the drop in energy costs that a boom in US fracking has precipitated on the other side of the Atlantic: "There will be minimal difference [in prices] in Europe where population density and environmental standards are higher," he says. "Shale gas will add more to the question of security of supply."
As will community energy projects, which Beckers is keen to see play a major role in the future of the UK's energy sector. As such, he plans to focus his role at Forum for the Future on boosting the sector in the UK, arguing that, unlike shale gas, the nascent community energy sector could both bring down energy bills and help boost energy independence.
"We are completely aligned on getting communities more involved in energy projects," Beckers says. "Community-scale energy projects are something that should definitely be part of the energy system."
If the fossil fuel-based energy system is reaching its natural conclusion, Becker looks to be perfectly happy hastening the demise of the model he once helped mould, just so long as it is replaced by an alternative green energy system that might just last another 100 years.
This article first appeared in Business Green. Forum for the Future's homepage image is courtesy of johnthescone and has been altered. View the license.
Related links:
- Forum welcomes five new trustees
- Read exiting trustee Sir John Harman's parting blogpost
- Pessimism? Powerlessness? Or Possibility? by new trustee Fiona Thompson