We need more professionals and entrepreneurs, Norwegian or from abroad, who want to invest in transformative solutions that go beyond pure IT services that only reflect human work tasks, writes Aggrator partner Salvador Baille today in Shifter.
On Monday 28th April, electricity went out throughout Spain. People died in hospitals. The country that has been a model for the use of renewable energy in Europe went into a blackout, taking Portugal and parts of France with it.
The reason for the blackout is easy to understand. The power grids that exist in Spain and around the world today were designed for a different time. They are designed to handle electricity generated by stable and reliable energy sources – coal, nuclear power, water, and gas – which can largely be controlled to match supply and demand for electricity almost instantaneously.
Renewable energy sources like wind and solar, on the other hand, produce electricity that is irregular and unstable by nature, and cannot master this art. The electricity grid in Spain collapsed because it failed to handle an enormous overproduction of solar energy in western-southern Spain without the backup of gas and nuclear power.
Spain is not the first case, however. Chile experienced the same thing in February. Germany, for its part, has repeatedly avoided ending up in the same situation because heavy industry was downgraded in extreme cases, at the expense of production. The consequence has been a massive exodus of industrial companies in recent years.
Green shift at high cost
The problem is partially solvable, but extremely demanding. Risky investments in solar and wind need large subsidies, but this is only the tip of the iceberg. The degree of electrification based on solar and wind that the European climate goals require implies a brutal modernization of the power infrastructure. The grid must be upgraded significantly based on new digital solutions for stabilizing power transmission, new infrastructure for energy storage, plus the creation and maintenance of backup power plants based on gas or nuclear power. The electricity bills that Europeans have been complaining about up until now may seem like a distant and blissful dream in the future.
The geopolitical aspect cannot be underestimated either. Solar panels and wind turbines are largely imported from China, where the extraction and processing of the most critical raw materials in these devices also takes place. Moreover, we do not know what kind of software these devices have, what information they store and transmit, or whether they have a «kill switch» in case customers do not behave «in parallel» with China’s interests.
Nevertheless, it is highly unlikely that the bureaucrats in Europe will change their minds. That would have meant political suicide for them, and even more support among voters for right-wing parties that are already causing headaches in Germany, Poland, Romania, and the UK. Moreover, the goal of net zero is still a worldwide commitment.
The good news is that this represents a golden opportunity for Norway and Norwegian innovators.
Firstly, Norway still has a smaller share of installed wind power (and solar) and has room to electrify more without changing much in the grid. Moreover, the country has sufficient finances to transform its electricity system before other countries around us, thus being able to offer enough stable power to businesses from across Europe. Moreover, hydropower, created to compensate for the fluctuations in electricity caused by the sun and wind, all of which must be weighed against the geopolitical risks described earlier, but still creates a competitive advantage.
Secondly, the entire future electricity grid of the world will need new technologies and smart elements that protect and stabilize against a greater role of renewable energy sources. There is still no country that has clearly positioned itself as a leader in this area.
In this context, Norway has companies and institutions that are pioneers in artificial intelligence, cybersecurity, and smart power management. As in many other areas, Norway is also an extremely good testing ground here. After the events in Spain, support programs like RePower Europe will likely focus even more in this direction. Norwegian entrepreneurs can build a new smart power industry that the whole world needs.
Norway must dare to hold the key
Norway will need managers in the policy-making apparatus to understand the seriousness of the situation we are in, understand the technology behind it, and allocate support for innovative solutions with real commercial potential in the field of power.
We need more professionals and entrepreneurs, Norwegian or from abroad, who want to invest in transformative solutions that go beyond pure IT services that only reflect human work tasks.
We need investors who are willing to bet on more than just SaaS and screens with search boxes. Investors who are willing to consider the enormous potential behind the right physical products and understand the foundations behind technologies that are inherently complex but not complicated.
Finally, we need politicians who understand the potential that Norway has in this area, and who want to attract talent and capital to the country, and not push them away.
Spain and Europe are witnessing the dream of an electric future being shattered. Norwegian innovators must dare to hold the key that can revive it.