The Myth of the Energy Transition: How Companies Can Contribute

Many people believe that the energy transition requires a radical exit from fossil fuels – and a switch to 100% renewable energy. Jonas Puck, the Academic Director of the MBA Energy Management at the WU Executive Academy, has a more moderate view, emphasizing that decarbonization is a highly complex endeavor and often depicted in an oversimplified way in public discourse.  

“From a global point of view, it would simply be impossible to entirely do away with coal, oil, and gas in a matter of only a few years. Reaching climate goals, including decarbonization, does not equal a radical and overnight switch from fossil fuels to renewable energy. Rather, it means moving from black to gray, which will eventually lead us to green. This also means that we will have to continue using fossil fuels for many years to come, only much more efficiently and prudently than in the past,” Jonas Puck explains.  

The Need for a Holistic View 

So, we won’t be able to bring about the energy transition through a radical approach; instead, it needs an incremental process that, for some years to come, will still require fossil fuels. The MBA Energy Management at the WU Executive Academy teaches a holistic approach to this topic with the aim of equipping energy managers with the skills needed to develop innovative solutions and actively shape a sustainable way of using energy in the future.  

In all three of these dimensions, companies can do a lot to turn black into green or, where necessary for the moment, gray! We present the three dimensions of the energy transition, explain their significance for companies, and dispel common myths in order to provide a clearer picture of the challenges and opportunities of the energy transition. 

1. Upstream: Increasing Efficiency in Energy Production 

“Upstream is about understanding where energy comes from,” Puck explains. What’s more, companies should invest in renewable energy sources, such as solar and wind energy, to decrease their dependency on fossil fuels. But even while doing so, the methods used to produce crude oil and natural gas also need to be scrutinized. “Technological advances play a big role in helping us use existing resources more efficiently than in the past,” Jonas Puck points out. Artificial intelligence, to name an example, can optimize oil production and contribute to a more efficient yield from existing reservoirs. “The goal here must therefore be to invest in renewable energy sources on the one hand, but on the other hand we can already gain a lot by using existing technologies more efficiently,” says Puck. “A little more ’gray‘ and less ’black' in production will not solve our problems in the long term, but it will help us in the short term to ensure security of supply at reasonable prices and at the same time take an important step toward greater sustainability.” 

2. Midstream: Efficient Energy Transport and Storage 

Midstream refers to the transport and storage of energy. “According to recent studies, more than 30 percent of maritime transport is due to coal, oil and gas shipments,” Puck explains. “We could significantly reduce emissions through more efficient transport methods and drive technologies.” Power grids also play a central role in the midstream sector. They transport electricity from the source to the user. “Energy supply networks are outdated and inefficient in many countries. There is enormous potential here to save energy and reduce emissions”, says Jonas Puck. An important component of this is investment in smart meters, which help us better understand consumption and optimize the purchase and sale of energy. Storage technologies in wind power plants or in conjunction with solar power systems are also crucial for balancing fluctuations in energy production and increasing efficiency in energy supply. 

3. Downstream: More Conscious Energy Use 

Downstream is about making end products from energy and, finally, using that energy—so this is where consumers have a responsibility. In this regard, Puck emphasizes the important role of energy efficiency of buildings and the industry. He points to WU Vienna’s Campus as an example: “Almost the entire campus is energy-neutral thanks to modern self-sufficient technologies such as geothermal power and ambitious energy efficiency standards. We only use carbon offsetting to compensate for the last remaining part of CO2 emissions we still generate,” Puck says. This is a field in which companies, industrial areas, and urban development efforts could save a lot: enterprises could invest in energy-efficient lighting and heating systems, regulate the temperature in buildings, and improve building insulation to reduce their energy consumption. The field of chemicals and refining also offer numerous possibilities to cut emissions: “For instance, favoring uncoated packaging materials, replacing plastics with biodegradable materials, and investing in sustainable product development,” Puck names some examples. Emerging economies with unreliable power grids often still need to rely on generators. Investing in recycling plants could have numerous benefits for society at large in many countries.  

Conclusion: Step by step towards the goal – with realism and innovation 

The energy transition is not a sprint, but a marathon – and it will not be achieved through radical upheavals, but through smart, efficient intermediate steps. The path from black to green necessarily leads through a consciously designed gray: through innovations in energy generation, modernization in transmission, and a new awareness of consumption. Companies play a key role in this by using technologies, questioning processes, and actively promoting sustainable solutions. Those who invest in efficiency and innovation today are not only making their own future more resilient but are also making a decisive contribution to making global climate targets actually achievable. 

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