 As it's been said, I'm going to talk about energy innovation and it really is part of a piece of work that we're doing at Imperial for Research Councils UK, which is about understanding how energy innovation activities are being organised in different parts of the world and how you can best organise them to get value for money and big impact. At the start of that process, we produced a paper about 18 months ago, which was called the Renaissance of Energy Innovation, which was a kind of a clearing of the throat at the start of the research exercise. Miraculously, that's the topic I've been invited to discuss, so I'll basically talk about the paper that we produced about 18 months ago and add one or two extra observations and insights that have come up since then. So I am going to be taking quite a global perspective on this rather than something that's specifically UK or European or Irish, though I will mention all of these as we go. And what I thought I would run through, first of all, let's think about what's happening to global energy as a context for innovation. What are the policy drivers of some of the change that's taking place at the moment? What are the enablers? And I'm turning back to the basic science and engineering that gives us the capacity to make much more radical changes now than perhaps we have done in the past. And second last, I want to think a little bit about where the energy system globally is going in the long term. There is actually quite a lot of disagreement out there about it and it's actually reflected in different patterns of innovation in different parts of the energy sector. And finally the thing, focusing activities, I'm going to talk just to explain very briefly what we're doing at Imperial College at the moment in terms of thinking about energy innovation. So just two slides on global energy demand and basically two points to be made from each of them. That is global energy demand going from 1971 through to roughly the present moment. There's a very clear message there. Energy demand is rising, it's still rising in spite of the crash in 2008. The rate of growth was maybe about 1% a year up till about the turn of the century. It's actually accelerated since then. And the reason that it's accelerating is the growth of the emerging economies. And IPCC, for example, identified that as the major factor in the acceleration of growth of both energy and greenhouse gas emissions that's taken place over the last decade. As we were discussing at lunch, in a sense there's been a decoupling of energy and economy in developed countries, energy demand now appears to have saturated. We can have economic growth without increasing our demand, but that's not the case in countries like China with growing cities like Shanghai there that are really changing. So energy demand is continuing to go up. Now that's the demand side of it, the supply side of it, a strong message that if you look there, fossil fuels still dominate the global energy system. Biofuels and waste, perhaps a bit traditional by energy play quite a big role. Nuclear expanded two, three decades ago but has really made no further progress at the completely global level. And renewables are expanding at quite a rapid late, but there's still quite a small part of the overall energy system. And again, to focus just in on the last decade or so where we've seen that acceleration in the growth of energy and fossil fuels, you can really pin it down in the last 10 years to the growth of coal mining that's at the top left hand picture, which is very much how China, for example, has been meeting its rising demand. But gas has been the fuel that has been rising most rapidly on a year on year basis over the last two or three decades. So that well pad in Pennsylvania at the bottom of the left is a kind of sign of what's going on at the moment. So if we're pursuing a sort of green energy agenda, there's a lot of hard work to be do to change round these sort of long term sort of secular changes in the energy system. Now what are the policy drivers that I think that are worrying people? I'm going to just pick on climate change and energy security as the two here. This is, I think, the most iconic, most important diagram out of the last IPCC report, and it's making a very strong case, a good piece of evidence, that there is a strong relationship between cumulative emissions of carbon dioxide and global temperature increases. It's almost a linear trend, whether you look at historical factors, which is at the bottom left hand corner of the diagram, or projections based on climate models, which are the various lines in different colours that are moving up to the top and right of the diagram. A very strong relationship between cumulative CO2 and global temperature change. Obviously the countries around the world came to an agreement at Cancun four and a half years ago, basically saying that our aim should be to keep global temperature increases below two degrees above pre-industrial levels. The message there is there's only a limited amount of carbon dioxide that you can put into the atmosphere if you're serious about reaching that two degree target. Worth well saying that there's a lot of uncertainty around the amount that you can put into the atmosphere, because there is uncertainty in the climate models, though they all agree that the relationship is linear. But the rough message is that there would be another trillion tonnes of CO2 left to put into the atmosphere if you were going to give yourself, say, a 50-50 chance of actually hitting that two degree target. So that obviously stands in big contrast to the picture I showed earlier about rising fossil fuel demand. And there's been some very interesting articles. Some colleagues of mine had a recent article in Nature about the issue of unburnable carbon if you think that the two degrees target is to be taken seriously. I think the other factor that I would flag up relates to fossil fuel markets, of which of course there's a lot of interest at the moment. And I always found this one quite interesting, a kind of historical picture of the degree to which oil was traded in international markets. Way back in the 70s, there was a very high dependence in developed economies on imports of crude oil. The oil crisis came, prices rose, and there was a real policy and market response with people improving energy efficiency, developing their own domestic sources of oil and other fuels, and a big reduction in the volume of international trade. But when prices fell again in the mid-1980s, that dependence on international trade and oil has gone up again. And certainly in Europe and in Japan, we are at roughly the same kind of level of dependence that we were in the 1970s. The US has been up and down, and obviously expansion of oil production there has changed things a bit in the last two years. But the other big picture of course is that Asian countries, especially China, are now have a big demand in international markets. And certainly until the price started tumbling a few months ago, then this was coming to be a big concern to people, this increasing level of dependence. Now, it is worthwhile reflecting, in some ways it's not surprising that the price is tumbling. This is from the International Energy Agency, and there has been over the last few years a kind of peak oil argument that the climate change problem would be solved because there wouldn't be enough hydrocarbons out there. I think this diagram for the International Energy Agency shows why the concept of peak oil has peaked as it were. There's lots of hydrocarbon out there, and we cannot rely on scarcity to solve problems like climate change. You can just see how much of the oil is available at prices $30, $40, $50 per baro. In fact, the interesting thing is to explain why the price has been so high in the past rather than why the price over the last few months has been so little. Obviously playing the market has been a big part of the picture. Again, I think oil markets, energy markets are very volatile, very difficult to play, and that has been another driver as to why countries have wanted to change the structure of their energy systems. Turning this round to innovation, and this diagram shows you, again with data from the International Energy Agency, how much IEA countries spent on energy research development and demonstration back to the time of the oil crisis. When we put this into a paper, one of the referees said it would be jolly interesting to see you put the crude oil price on top of this, which is what we've done there with the black line. You must always remember that correlation is never the same as causation, but the correlation between R&D spend and oil prices is really quite truly remarkable in that picture. Back in the 1970s, people were trying to get out of oil, striving for greater energy efficiency, and the spend on public sector energy R&D increased rapidly at that time. Oil price tumbled, the budget started to disappear again, and it's only over the last decade, mainly from the driver of climate change, that you've seen that investment in energy R&D starting to take place again. One year that goes against the trend is that year 2009, which is entirely explicable by the US Recovery Act, when the US spent a great deal of money on capital investment on energy R&D at the same time as the oil price weakened. The other thing that I would flag out this picture is the mixture of investment in R&D and how the balance has actually changed, because back in the 70s, most of it frankly was going into the nuclear sector, and much of that actually may have been quite unproductive kind of R&D investment. The picture is much more balanced now as we go into the last decade or so, with much more money going into renewable energy and other, which is a category that includes energy efficiency, smart grid infrastructure kind of investment. So a very, very different picture now. And if you look at the relatively small investment in fossil fuels from the public sector, this has also begun to rise again slightly, but if you dig deeper you will find that much of it is actually going into carbon capture and storage. The bit that isn't going into carbon capture and storage is going into coal, and very little of the public money is going into oil and gas. Now I just wanted to flag out, one of the reasons that we worried about this in the UK, is that you could take that global diagram on R&D spend, just pull it all the way down the axis, and you could see that the UK declined about £30 million a year of energy R&D spend about 10 years ago. So the UK has gone through that same kind of trend, but we came so close to zero that we've actually had to go through a lot of new institution building in order to get the spend back up again. And one of the points we've made, and the research councils love us on this, because as we produce the evidence in which they can prepare their comprehensive spending review bid for the next time round, is why we should spend more. The UK is low relative to peers in the International Energy Agency. This diagram shows investment in energy R&D as a percentage of GDP. I've circled the UK, I should say that Ireland is sort of three steps to the right of the UK on that diagram for those of you who are sitting at the back. And the other thing of course that the UK has huge policy ambition in terms of climate change, and again the level of expenditure that we're making is probably low in terms of the ambition that we have for the mid 21st century. I did actually yesterday go on to the IEA website and dig up the Irish R&D statistics as well, so there you are up and down a bit since 2003, but probably I imagine actually 2012 we're going to pick up in relation to the UK. I don't have a kind of metric to judge that. Very interesting, Llywydd, that most of your investment is going into renewables in green and energy efficiency in blue. That appears to be where most of the money is going. Now one of the things that greatly struck us, I mean it's all very well to look at public sector, but what is the private sector doing in energy research and development? And very carefully we've made the scale on this diagram which appears to have dropped off a little on the left hand side. It's 2012 US dollars, billion dollars is the scale, and it's roughly the same scale as the diagram I showed you for public sector R&D in IEA countries just a few slides back. Now it's really difficult to identify what the private sector spends on energy R&D for a number of reasons, because much of the private sector energy R&D on the supply side is being done in diversified engineering companies where you can't tell what they're spending it on, so we don't know whether Siemens is spending its money on transportation systems or energy. And talking to people at companies like Siemens, even they don't know how much they're spending on transportation as opposed to energy, so on the outside it's even more difficult. And I think the other difficulty is that on the demand side, if you're looking at companies like Toyota, it's impossible to tell what they're spending on energy because it's so tied up with investment in informatics safety. It's very difficult to disentangle it. So this only refers to energy, private sector energy R&D spend that we can unambiguously label as energy. But the big picture is, you know, most of it is actually going in oil and gas R&D. It's on the fossil side of it rather than on the sort of the green energy end of the spectrum. Electric utilities that the red one there hasn't really changed much over the last decade or so, but it's a relatively modest level of expenditure. And as I will mention briefly at the end, in fact, utility companies spend a remarkably low proportion of their turnover on energy innovation. And I think that's one of the big challenges we face. And again, you know, alternative energy wasn't there at all in the past, but it's rather growing. The other thing again is to look, you know, in which countries are the companies based that are spending that money. And I think there is a very interesting picture here. It's probably fairly stable again in developed economies. But we're seeing a lot of new interesting expenditure in emerging economies, especially China, Brazil, India, that are now spending an increasing amount of resource on energy R&D in the private sector. And again, if you burrow down, much of that is happening in the oil and gas sector. Companies like Petrobras, a Chinese national oil company, that is where a lot of the money is actually going. And one of the points that we've made in this paper is that innovation, there's a kind of tension in the energy innovation world. Because a lot of the public sector R&D is trying to transform the system and turn it into something completely different, something low carbon. But much of the private sector R&D appears to be more about reinforcing the paradigm that we have already by extending the resource space, by making it cheaper, more cost effective to extract fossil fuel resources. And I think this is really one of the interesting tensions that needs to be thought about as we face some of the big global challenges I mentioned earlier. Now, just in terms of why I think innovation is much more important now, it's not just that there's an imperative for it, the possibilities I think have also changed as well. And work that we did some time ago with the International Energy Agency suggested that there are three broad areas of scientific endeavour that are really working their way through and influencing the energy system as much as anything else. Material science is incredibly important. There are big advances here. People can start to design materials now rather than discover them, and that is making a big difference to the kind of possibilities that you have. If we were looking at bioenergy, the question of movements in the biosciences and genomics, et cetera, is also we're seeing big advances here that make a big potential difference. And finally, the role of information and communication technologies is absolutely pervasive in terms of changing the possibility set in the energy sector and elsewhere. And there are many areas of application that you can have around the energy system. And I think you could argue that you look in detail at many of the specific innovations that are taking place in the energy sector. They're not specifically energy innovations. They're innovations that have been enabled and made possible by these kind of more underlying scientific developments. So obviously electric vehicles, the advances in materials and battery technology has been a major factor here in raising the range of possibilities. Many of the advanced PV technologies are also very reliant on material science changing the possibilities. The same is also true of fuel cells, hydrogen, et cetera. The gentlemen there standing in front of the miscanthus grasses obviously represents some of the possibilities around the biosciences side. But materials have affected wind turbines and information and communication technology is absolutely pervasive. It's affecting, for example, smart grid concepts would not be possible without it. But even in the fossil fuel arena, information and communication technology and its contribution to seismic imaging, et cetera, has had a major influence on the possibility set. And I think, you know, the fact that there has been scientific advance in all of these areas perhaps underpins the kind of the possibilities that are taking place in the energy sector. Obviously, I mean, I don't need to say it in Ireland, certainly on the blue side. But certainly if you look at it globally, there's been a huge advance in terms of the deployment of renewable energy. So things have changed very much in the last few years. Now I just want to move on to this question of where the energy sector is going to in the long term. Because as I showed you the picture of the private sector R&D and the public sector R&D is based on very different assumptions about where the energy system is going to go in the future. And one of the things that we did as part of our study for the research councils was to review energy scenarios and outlooks from a very different range of bodies to see where we were going to be two or three decades further down the line. And we took a number from public sector organisations and we took a number from private sector organisations, especially those in the oil and gas sector. I should say that IPCC has a database of 1200 of these such scenarios that we have not had the resource to get into. But I'm going to take on a master's student over the summer to try and plow their way through these. So the bodies there, we took it from the International Energy Agency, which has three main classes of scenario that it's running at the moment. We took it from OPEC, which is on the far right hand side, and we took it from the US Energy Information Administration. And then we took data from three different oil companies, we took it from ExxonMobil, we took it from BP, and we took it from Shell, which has a pair of scenarios. And I think the message, the strong message out of this, at the far left hand side you have the 2011 baseline broken down by fossil fuels, nuclear, bioenergy renewables. And then you have the range of projections for 2040, which was the year where we could get the best comparison across the different scenarios. And I think the short message is that there is a very, very different set of views about where the energy system will be in 20 or 25 years time. Which partly reflects the thought process that people have gone through in thinking about it. Some of the scenarios, the IEA2 degrees is what you might call a normative scenario. It's decided we're going to, for two degrees, global warming, and it said, what kind of energy system do we need if we're going to get to two degrees? So it starts at the end point. Most of the other scenarios are what people used to call forecasts, but they now more demurely call outlooks. They're sort of extrapolations of current trends, assuming that current policies become implemented. And most of the oil company in the US Energy Information Administration falls into that category. And the two shell scenarios are much more speculative, in a sense. But it is fair to say that the non-normative scenarios, the ones that are projections of current trends, all foresee a very large increase in energy demand over the coming decades. And what is more than that, most of them also foresee a rather large increase in fossil fuel demand over that period as well. And ironically, you know, it's actually the ExxonMobil scenario that has, out of the non-normative scenarios, has the lowest overall level of energy demand. But very wide variations in terms of what the future might look like. And it is worthwhile when we looked a little harder about what were the areas of agreement between all these scenarios and what were the areas of disagreement. So the areas of agreement, energy demand will rise even if we hit two degrees. Energy demand has saturated in developed economies. That is absolutely robust against all the scenarios, regardless of whether you're coming from an oil company or not. There is a perception that energy demand could start to saturate in some of the emerging economies, such as China. And indeed, as part of the US-China agreement that was done recently, China can at least foresee greenhouse gas emissions peaking by the late 2020s or around 2030. Fosal fuels will continue to dominate the world energy system, even in the IEA two-degree scenario. And just to underline this point about there is no physical constraint on the availability of fossil fuels. Everybody but everybody says the use of natural gas expanding globally, and everybody sees renewable energy expanding as well. These are an absolutely ubiquitous factor around all of the scenarios, regardless of their character. And electricity will take an increasing proportion of demand, absolutely solid. But the areas of uncertainty are actually quite strong as well. People's views about what happens to oil in the future is quite varied. Some people, the international energy agency at two degrees and Shell in some of its scenarios sees oil demand peaking or plateauing over the next couple of decades. Interestingly, not because of peak supply, but because of peak demand. They would actually see it going down on the demand side of the equation. There's a very wide level of variation about the level of coal use in the future. Ironically, the lowest level of coal use I think is in the exon scenarios, where they see a much bigger move towards oil and gas. The big area in which you see a difference is what is going to happen to transport energy in the future. This is a huge variation across the different scenarios. Will there be a role for biofuels in the future? And if you track these forecasts over time, the role attributed to biofuels is going down and down in every annual cycle. I think there's two factors underlying that. One is a sort of a green concern about the sustainability aspects of biofuels. And the other one is the abundance of fossil fuels, which means especially the oil companies, for see a lower role for biofuels in the future than they might otherwise have done. Some of the companies see a big role for natural gas in transport, and that's actually started to happen a bit in the United States in the freight sector. And the big divider is the role that alternative fuel vehicles, battery electric, plug-in hybrids, hydrogen fuel cells play. From people like BP and Exon, there is very little role for these by 2030. On the other hand, IEA2 degrees scenario, there's a very large decarbonisation of the transport system that sees a big role for alternative fuels. And there's also some variation on the degree to which energy efficiency impacts energy demand. So I think we've got actually a very challenging future here, and there are actually quite divided views about where the world is going. And it may be that after the Paris conference at the end of this year that we have a clearer picture about where we might be going. We'll have a clear idea of what kind of pledges people have actually made. Now, I wanted just in the last few minutes just to talk about a little bit about what we have been doing on the Research Council's UK Energy Strategy Fellowship, because it touches very much into these issues and how different countries should sort of adapt their energy innovation strategies to fit in with this complex world. We were actually charged by the Research Councils with doing two things. The first one came from an international review of energy research, which the Research Councils had done in 2010. It's normal practice for the Research Councils to get some international peer review of all their major activities. And the international review came in and said, you know, brilliant science, wonderful stuff, all the rest of it, but it's poorly connected with policy, and there is the poor record of pooling technologies through to commercialisation as a result of the activity. And the international review panel recommended that a roadmap in inverted commas be produced so that everybody understood where they were going. The Research Councils weren't going to do that in-house, which is why they created the Research Council's Energy Strategy Fellowship to do it for them, and I was the person lucky enough or unfortunate enough to get the job of doing this. So this is the document that we produced about 15 months ago and launched at the Royal Society that had a lot of quite strong messages about how the UK should organise its activities. And we were quite pleased when the House of Commons Energy and Climate Change Committee picked up on a lot of the recommendations and effectively forwarded them to government. Having done that, we're now in the middle of a research programme which is comparing internationally how different countries are dealing with this energy innovation challenge with a view to learning lessons about what works and what doesn't work in different areas. Now I just want to flag that one of the very strong messages that came out, I mean I could give you slides and slides of detailed research recommendations, that wouldn't be very helpful. The bigger messages that came out were mainly about collaboration and linking the activities of different institutions together in the UK. DECC did not want us to include this diagram in the report because it gives the impression that the UK innovation landscape in the energy area is very confused. But actually there's a lot of confused people out there so I think we felt quite able to put that in. Moving from left to right it's moving from basic research through to deployment and these are the bodies that we see playing quite a big role at the moment in forwarding it. And one of the areas of confusion is the number of bodies that are active in the middle of that chain around the kind of applied research and development area. And it is fair to say that things are happening in terms of sort of beginning to resolve some of this. The Energy Technologies Institute in the Middle is going to end in 2017 and will be having a soft landing effectively and will be leaving a lot of this domain to the Technology Strategy Board which I should remind you is now being Christian Innovate UK and I have to bang that in my mind to remember that's its new name. One thing I might flag since I know you've got the regulator of the audience is why we have off-gem, the energy regulator in the middle of that diagram. And the reason we have off-gem in the middle of the diagram is because they have been running something called the Low Carbon Networks Fund for a number of years which has moved into something called the Rio framework for regulation which gives the distribution and transmission companies in gas and electricity the ability to spend a certain amount of their turnover on innovative kind of activities. And frankly when we look at the numbers we just think the volume of effort that's being expended there is a very large proportion of what the rest of the public sector has been spending. And we've characterised it as throwing a large stone into a small pond and we are having a number of interesting debates with off-gem about how that money is best deployed, whether it's being employed in the right directions and whether it's subject to the kind of rigorous evaluation standards that some of the other public sector R&D has applied to it. So I think there's some very interesting issues there that still need to be played out but our big message was that there needed to be more collaboration between these bodies to make it work effectively. And where I think we've had a success is that the research councils and Innovate UK are now working together much much better. They have a new initiative called the energy catalyst where they work together in three stage innovation with the research councils playing a big role at the start of the process handing over to Innovate UK who then take things forward at the final stages and it is intended to provide seamless support for initiatives right along the innovation chain. I'll just finally flag that we are now actually on to conducting the actual research project, the research programme that we've been asked to look at looking at what happens in different countries. And we're focusing this with a smallish number of countries and a smallish number of case studies that are not the most important areas of energy innovation but you could probably argue that they're useful as exemplars for casting light on what happens elsewhere. We're doing heat pumps. There's a lot of ambition for the deployment of heat pumps in the UK. There's been huge levels of deployment in Scandinavia very recently and we are very interested in the factors that would allow heat pumps to develop a market in the UK. And really we've picked them because we want a technology that you can put in the back of a white van and bring to somebody and deliver. That's the kind of characteristic we're looking for. We're interested in smart grid as an example of a more systemic approach. It's not about any one technology, it's putting a system together. As I'll say we're actually very interested in comparing what the UK is doing with Korea actually which is doing interesting stuff and also one American state. We're interested in shale gas because it's an example of a technology that has had no public sector push behind it at all. The innovation has almost entirely happened in the private sector and we want that as a kind of contrasting one to look at these other technologies which are much more getting a big public sector push behind them. Wind energy a fairly obvious one and in fact we're doing a lot of work in China with a Chinese PhD student on the wind energy sector. But we're interested in a technology that needs site construction bringing a lot of kit together in one place to assemble a system. And finally wave energy which I have to choose my words on very delicately because we've chosen that as an example of a technology that has perhaps not fulfilled all its original promise. And we're trying to use that as an example to look at some of the barriers and the difficulties for innovation. So that really explains what our case study set is. And we are looking at a number, we've got the resources to do this work in East Asia, Europe and North America. And we're just about starting on the study trips at the moment to go out and see people with the help of the UK Science and Innovation Network that's scattered around the embassies in various parts of the world. So I guess I've probably used my half hour there and I've covered probably quite a large range of topics. I hope that provides some fruit and some interest for a few bit of questions and discussion. So thank you very much.