This is an edited transcript of the GIC Speakers’ Series – Sustainability Edition with Brandon Rennet, CFO of carbon reduction and removal firm, Storegga, and Haukur Hardarson, Chairman and Founder of renewable energy firm, Arctic Green Energy. The pair were interviewed by George Kay, Head of Infrastructure for Europe, GIC about their vision for the energy transition and the key challenges and opportunities both companies face.
The impact of energy shocks on the road to net zero
GEORGE: With widespread energy market disruptions this year and record-high oil and gas prices particularly in Europe, security of supply concerns are coming to the forefront. What impact has that had on the work that Storegga and Arctic Green do?
BRANDON: There is a well-established energy trilemma – balancing security of supply with affordability and environmental considerations. That framework is extremely relevant right now. Clearly, security of supply in Europe has shot up on the agenda and so have affordability concerns. But the question to me really is – what is the true cost of delaying action on the environmental agenda? It seems clear that the environmental concerns, which are so fundamental, cannot be dealt with in the same way as has been done in the past.
With the Russia-Ukraine war, we are seeing some willingness to rely more on non-Russian hydrocarbons. But overall, it makes very little sense to increase our dependency on fossil fuels at a time when we have seen them being weaponised. It is much better to advance investments in renewables, electrification, hydrogen, carbon capture and storage (CCS), and direct air capture. The situation in Ukraine may further drive that shift to energy independence and hence to renewables and low-carbon tech. Indeed, we have already seen an increase in demand. With the passage of time, we will see a broader and longer-term focus on affordability, allowing the environmental agenda to go right back into the top spot in that energy trilemma.
HAUKUR: Disruptions and high oil prices create tremendous opportunities for companies like Arctic Green in Europe. Not many people are familiar with the landscape for total global energy usage. Electricity only accounts for 20%. Heating, instead, takes up over half of total global energy usage. This is also where the dirtiest fossil fuels are burnt.
With our projects in Europe, we have emphasised that clean heating for cities is not just a climate issue but also one of energy security. The current energy crunch has exposed economic vulnerabilities around the world, with the worst impacts – short supply and rising prices – hitting the most vulnerable the hardest.
There is an enormous opportunity for us to meet both the demand for decarbonisation and to deal with rising prices by providing clean heat to European cities. Geothermal meets both the requirements of decarbonisation and energy security, while also enhancing human health and the environment. It reduces air pollution by transitioning from fossil fuels to clean energy sources, and it also offers a domestic source of energy that can significantly contribute to energy security outside of the traditional geopolitical power structure, largely based on fossil fuels.