(Yicai) Sept. 19 -- The global energy transition needs to address and achieve the three key elements that an energy system delivers, which are security, sustainability, and affordability, Roberto Bocca, head of the Centre for Energy and Materials at the World Economic Forum and a member of its executive committee, told Yicai in a recent interview.

Below are excerpts from the interview:

Yicai: What are the biggest challenges in energy transition?

Roberto Bocca: Energy transition is quite complex, is not as straightforward as moving from fossil fuel to renewables. An energy transition has to address the three main dimensions that an energy system delivers. Not only security, of course, and sustainability, but also affordability. 

So, the complexity of the transition is because of these three elements. They need to be achieved at the same time. The biggest challenge of the energy transition at the moment is being able to have an equitable, sustainable, and secure energy transition.

Yicai: What potential do you see for smart grids, energy storage technology, and other emerging technologies to drive the energy transition?

Bocca: I see a huge potential. This technology will allow energy efficiency to the next level, optimization of energy consumption, reducing energy intensity. One of the trends that we are seeing is growth in energy demand, but we can't grow our energy system infinitely.

So, to address the growth in the need for energy and the challenge, we need to have a much more efficient system. And that is possible through digital technology, the smart grid, the innovation that we can bring through the technology.

Yicai: What are the shortcomings of the current investment in the new energy sector? How to guide the flow of funds to the new energy industry?

Bocca: One of the imbalances we see is the lack of investment where mostly is needed in these emerging economies. A lot of the demand growth comes from emerging economies, and not enough investment in the new technology are coming in the emerging technology.

So, there is an imbalance there where it is possible to accelerate the transition globally. To do that, we need, from one side, from the emerging economies, a very clear objective and plan so that the investor can see the policies are put in place for the long run and they can feel comfortable investing.

I don't think the problem is lack of capital because there is a lot of capital, and now people realize how much potential there is also in new technologies. But, there is a need for a policy environment that allows those investments to come through, mainly in emerging economies.

Yicai: What can be done to facilitate the balance between economic development and sustainable energy?

Bocca: One element that is important to keep in mind is while the impact on climate is global, energy transition eventually is local. But again, there are these opportunities to leverage the global technology, global innovation, but then they need to be applied locally. So, each country will have a different speed in the transition based on the different social economic conditions.

And we should not penalize those countries that are still going through a phase of economic development. The other way around, we should find ways to invest even more in those countries to allow economic development with the energy system that is more sustainable.

So, this is a challenge that cannot be afforded only by the emerging economies. The global investor needs to act on that as well.

Editor: Martin Kadiev