Powering Progress Together reception
Mar 3, 2016
Speech given by Simon Henry, Chief Financial Officer at Shell, in Manila, Philippines, on March 3, 2016.
In this speech, Simon Henry argues that meeting global demand for energy while tackling climate change will require a strong, sustained focus on transforming the way societies and economies consume energy, while further enabling market forces and technology to re-define the way energy is supplied. For this to happen, Simon says that an economy-wide approach must be adopted that considers the different options available to different sectors. He notes that oil and natural gas – the cleanest-burning hydrocarbon – will continue to be essential components of the global energy mix, acting as partners to renewables such as solar and wind.
Good afternoon everyone.
Well, another successful Powering Progress Together event is drawing to a close. Today marks the conclusion of a three-year programme in Manila orchestrated by the Shell Country Chairman, Ed Chua, and his team at Shell Philippines.
I would like to thank them and each and every one of you – the delegates – for your involvement during this time.
Seven billionth baby
I’ll be brief, as I’d like you to get back to your conversations. But first, I want to share the story of Dhanica Camacho.
This name may be familiar to some of you. Dhanica is the world’s symbolic seven billionth baby, who was born in Manila in 2011.
There’s been clear economic development here, which has brought opportunities for some. But – as Dhanica’s story shows, there are still major challenges.
Back in July, it was reported that day in, day out, Dhanica breathes polluted air and doesn’t have reliable access to energy. There’s no fridge or washing machine in her home. And her family limit the use of household appliances to two electric fans, lights, and a desktop computer.
This is far from an anomaly. In fact, according to the World Bank, around 1.1 billion people in the world have no access to electricity. That’s well over ten times the population of the Philippines.
This is the situation in 2016. Fast forward a few decades and by 2050 another two billion people will share our world. And more than six billion people are likely to live in cities. These trends will contribute to global energy demand rising significantly in the first half of this century.
Consumption and supply
Meeting this growing demand for energy requires significant effort. But even more so when you consider that it must be done while tackling climate change.
Addressing this dual challenge will require a strong, sustained focus on both the consumption and supply of energy. We need to transform the way societies and economies consume energy. And with supply we must enable market forces and technology.
I believe this has to be done by adopting an economy-wide approach, which takes into account different options for different sectors.
For example, renewable sources of energy will be critical to help transform the electricity sector. But this sector currently accounts for only one-fifth of total energy consumption. So large parts of the economy need to electrify in order to make way for more renewables.
This is part of the answer, but not all of it. As you’re aware, some sectors are a lot harder to electrify than others. For instance, chemicals can’t be produced using renewable-based electricity, as this process requires extremely high temperatures.
This means that oil and natural gas – the cleanest burning hydrocarbon – will continue to be essential components of the global energy mix, acting as partners to renewables such as solar and wind.
While oil and gas are vital to meeting growing demand, they must be cleaner to address climate change. Here’s where technologies like carbon capture and storage come in.
This sounds all well and good, but how will it be achieved in practice?
For me, there is only one way. And that’s what you’ve been doing today: collaborating.
That’s why the PPT series is so important. Its fundamental goal is to bring together representatives from business, government and civil society to debate the future of energy.
Your participation means that you share this view of collaboration. But not everyone does. Otherwise, there wouldn’t be a need to continue beating this drum.
Collaboration is important because it encourages assumptions to be challenged, and boundaries to be pushed. The merging of minds allows you to achieve something you wouldn’t be able to do alone.
Look at the work being done by Shell’s Scenario team and the local government of Marikina City. They’re combining their respective expertise to offer recommendations on ways to ensure affordable and dependable electricity supplies in the City. Recommendations include building a natural gas fired power plant and installing solar panels on rooftops.
Also look at the partnership between Shell, the Manila Observatory and the Weather Philippines Foundation. They’ve set up the Automated Weather Station project, which warns local governments throughout the country about extreme weather as early as possible.
Each of you, no doubt, has similar stories. When you go back home, I encourage you all to share them far and wide.
Let’s all continue repeating the mantra that collaboration is important. By saying it enough times, we’ll encourage more and more partnerships.
These partnerships, in turn, will ensure a sustainable energy future becomes a reality. For Dhanica. And the many millions of others who want to breathe cleaner air and have access to affordable energy.
The challenge to all of us in the room is to make sure our discussions turn into tangible actions, like the implementation of government-led carbon pricing mechanisms.
That’s enough from me. The only thing remaining is to invite you all to visit the Shell Eco-marathon at Rizal Park. For those unfamiliar with this event, it encourages teams of young engineers to design, build and drive energy-efficient vehicles. Another great example of collaboration in action.