I subsequently talked about the need to get the energy technologies, and energy security issues sorted out. There are a lot of new technologies needed to help us deal with the energy and climate transition. Most of them already exist, but because of uncertainty around which would be deployed, the development on these various technologies are uneven throughout the supply chain.
For example, there are established hydrogen storage technologies, hydrogen transport technologies and fuel cell technologies. But because it is not clear how the supply chain will be configured, each aspects of these technologies could be deemed expensive. And if you zoom into a single component: say the fuel cell, you’d discover that a major part of the cost contributor is the the materials because platinum is used as a catalyst in the process.
There are different ways to deal with this such as creating catalyst that does not use platinum or use less of it and yet have sufficient efficiency. Or there are competing fuel cell technologies that uses a different approach. No one is sure which should take the lead and how resources should be allocated to move the various approaches through to technology readiness. Moreover, there may be insufficient resources in the market at the moment to go into all of those competing technologies for them to reach sufficient maturity.
So instead of relying on economics at this stage, we should be thinking about the other non-economic considerations that are worthwhile. Issues like energy security, safety, having a bigger picture of whether those various technologies alignment with these goals. More importantly, the technologies we want to back must be able to provide gains in carbon reduction and environmental improvements which allows us to feasibly expect to meet the aspirational climate goals I raised before.
To think about economics before setting the goals and determining technologies can be putting the cart before the horse – because we need to be clear what we are trying to achieve and try to manage the cost of achieving it. If we are solely concerned about costing at today’s level to try and achieve new things, we will never get anywhere.