When your business model depends on scale, how do you manage a shrinking market for your product?

The energy transition is forcing – or will force – leaders to address this question as renewable energy continues to replace fossil fuels. For instance, as consumers buy more EVs, the market for gasoline will shrink, making the gas station business unattractive.

In this example, station owners have the option of becoming distributors of other sources of energy such as electricity or hydrogen.

Consider the company that mines and refines the gasoline, however. Finding a replacement for lost revenue from declining demand for gas is more challenging but still somewhat straightforward. An oil & gas company could pivot to mining and refining chemicals used in batteries and other technologies. Chemical extraction could remain at the core of the organization even if the resource pulled from the ground is different.

Electric utilities, however, face a more existential threat. The culprit is “grid defection.”

Grid defection occurs when a ratepayer installs solar or other energy generation capabilities along with storage and backup to have an independent energy supply.

Defection represents a challenge for two reasons. First, when defection occurs, there are fewer ratepayers among whom to spread investment costs that already require decades to pay off. Second, those most likely to defect are those most able to pay, meaning that only those with less ability to pay remain on the network.

With grid defection, utilities face a situation where customers are not replacing their electricity service product with a substitute service product into which the utility company could pivot. Instead, defectors are deciding to become their own supplier.

What strategic options are there for the leadership team at an electric utility? Conceptually, there are a few options:

➤ Fight it. Do everything you can to make it as financially unattractive as possible to defect from the grid.

➤ Ignore the problem. Financial ruin due to grid defection is still years away. Cut costs and prop up profits to make as much money for oneself now as possible and leave the problem to the next leaders to solve.

➤ Accept and adapt v1. Adjust the service to match the new economics, focusing on commodity, low-cost electricity delivery and dropping high cost extensions to the basic service.

➤ Accept and adapt v2. Adjust the service product to become highly value-added, incorporating benefits of grid defection into the service offering.

➤ Re-invent the company by creating a division that profits from grid defection by helping ratepayers make the leap.

None of these paths are easy, and this list of options certainly isn’t complete.

At Tilt Global, we help leaders faced with disruption caused by the energy transition come to grips with obstacles and opportunities of their specific strategic context, identify their options, and make better decisions to build resiliency and alignment.

How do you make decisions when things get “political”?

I’m not talking about who to vote for. I’m referring to the type of politics where there is more to the discussion than what’s on the surface. Where there are unspoken concerns or factors between the parties involved that influence behavior and positions.

Politics makes decision-making difficult because of the trust dynamics that result with political motivations. Can I read this info at face value, or has it been altered as a result of political concerns or trade-offs?

For example, the Obama administration touted its climate-friendly stance, including its support of the Paris Climate Agreement. Similarly, Biden made a show of recommitting the U.S. to the Agreement when he took office after Trump had withdrawn during his term. Unlike Trump’s open hostility toward the climate movement, the Obama and Biden administrations have positioned themselves as allies of the clean energy crowd.

This climate-friendly public image is promoted in spite of policies that have been a boon to oil and gas. While Obama served, the White House paved the way for expansion of shale oil & gas mining. This move strengthened the economic power of the U.S. and ultimately positioned us very advantageously in response to the Russian invasion of Ukraine.

“But fracked natural gas is much cleaner than alternatives like coal. It’s the ‘bridge’ fuel we need,” says the oil & gas lobby. “Look at the science.”

Does the trade-off make it worth it? In other words, for those who support a climate-friendly stance, does the expansion of the fossil fuel industry become more palatable in light of the growing use of a cleaner option and the overall benefit to the American economy?

What if the science isn’t as clear?

A new study out of Cornell University calls the science that teaches “clean natural gas” into question, as reported by The Guardian. Researchers concluded that the entirety of the process of extracting, processing, transporting, and combusting natural gas releases 33% more emissions over a 20-year period compared to coal.

What does that mean for Obama and Biden supporters who see their leaders saying one thing and doing another? What is the trade-off between the geopolitical policy to assure the strength of the US in the community of nations and the domestic policy to respond to an environmental mandate? And what then does it mean for an enterprise looking to make strategic energy choices that are consistent with the direction of U.S. energy policy? How do corporate leaders interpret the signals delivered by government leaders? Which ones do they ignore and which do they pay special attention to?

Politics – including the policies and regulations that are on the books and the nuances between the lines – are a majorly complicating factor in strategic decision-making.

These are the types of challenges we help clients navigate at Tilt Global.

“That’s not how any of this works.”

If you find yourself wanting to say that in response to a colleague, you may be facing someone who has fallen susceptible to Attribution Bias.

Attribution Bias refers to the systematic errors made when people evaluate or try to find reasons for their own or others’ behavior. These systematic deviations from rational judgment can lead to inaccurate assessments and illogical interpretations.

In the context of energy, one of the places that the Attribution Bias appears is in the price of oil, which often has more to do with the significance of expectations about the price than strictly the dynamics of supply and demand would dictate. Consider the following timeline of prices for Brent Crude Oil, the price barometer for ~80% of global crude, and events related to the war in Ukraine.

➤ November 29, 2021: $69.51 per barrel.

➤ February 7, 2022: $94.44 per barrel. Tensions between Russia and Ukraine have been rising for three weeks since arrival of Russian troops in Belarus.

➤ February 24, 2022: Russia invades Ukraine, resulting in heavy fighting, a bombed gas pipeline, and fires at oil refineries.

➤ February 28, 2022 – $114.34 per barrel. 

➤ March 7-May 30, 2022 – Heavy fighting continues, with oil prices fluctuating between $102.17 and $117.03 per barrel.

➤ June 6, 2022 – $119.02 per barrel – a peak price for 2022.

➤ June 13-November 28, 2022 – The war rages on. Oil prices fall.

December 5, 2022 – $76.60 per barrel, below a pre-war peak of $85.53 per barrel in October 2021.

To be clear, at no point during this span of time did the actual supply of oil fluctuate below levels of demand. Ultimately, it became clear that there were no strictly economic reasons for oil to increase in price by more than 70% as a result of the invasion of Ukraine by Russia.

Instead, suppliers were fearful that the supply of oil could be affected, and prices rose even as suppliers seemed to ignore the fact that the global oil supply was not materially impacted, in spite of sanctions on Russian oil imports. In other words, market makers very likely inferred that customers would attribute the price increase to the invasion of Ukraine even if the global supply of oil remained sufficient to satisfy their needs.

In a dynamic and complex environment like that created by the global energy transition, the hype of the news cycle can be a trigger for falling into the mistake of the Attribution Bias when making strategic decisions. 

At Tilt Global, we help clients avoid cognitive biases by employing a disciplined approach to context analysis using our PRISM framework and by increasing teams’ awareness of these kinds of potential pitfalls in decision-making.

When using news sources to gather information in support of a decision, beware Framing Bias, a.k.a. Framing Effect.

Framing Bias relates to the fact that teams and individuals can look at the same data and draw different inferences and conclusions. Editorial boards use this fact to present slanted views that aren’t necessarily false by may not present the complete picture as well.

Consider the data in these images:

Now consider the following headlines:

➤ Headline 1: China increases coal consumption 3.5x since 1990 in defiance of climate goals
➤ Headline 2: Coal’s grip on global GDP decreases by 66% since 1990

Each of these headlines clearly tell two different stories, one of the rising consumption of the dirtiest of fossil fuels by a single player on the global stage and one of the declining importance of coal in the world economy. Both of these stories can be told using the same set of data. Each has framed the story of the data in a very different way, however. They’ve taken their own slant.

So, what is a decision-maker to do? When analyzing the present context for a strategic decision, how does a leadership team faced with a strategic decision deal with the fact that Framing Bias exists. How do they know what information they can trust and what is telling a true but incomplete story?

1️⃣ RECOGNIZE that cognitive biases like Framing Bias and others exist, are completely natural, and can affect anyone. The key is not to try to eradicate them but to be vigilant for when they arise.

2️⃣ IDENTIFY the frame that is present in the information under review. By naming it (anti-China, pro-green energy), you reduce its influence.

3️⃣ FOCUS on the data so that decisions are based on hard data and not on how that data is presented by others.

4️⃣ REFRAME it differently. Consider how someone could take the same information and present it in a different light to gain a more balanced view.

5️⃣ THINK critically about the data or information available, questioning assumptions at every level.

Enterprises faced with making decisions necessary to fight climate change via the transition to carbon-free energy are inundated with information framed to support the speaker’s agenda. At Tilt Global we empower leadership teams with the capacity to recognize Framing Bias and other impediments to good decision-making.

When making strategic decisions as a disruptor, how do you deal with a context in which the incumbent has their finger on the scale?

One of the ways in which an industry can protect itself from free market competition is through regulatory capture. This phenomenon occurs when a government agency whose mission is to protect the public from bad behavior on the part of industry players instead focuses its attention on protecting the economic security of the industry at the expense of the public good.

As Tony Seba points out in his book, “Clean Disruption of Energy and Transportation,” coal mining is an example of an industry that has perfected this strategy worldwide. Government subsidies, cheap or free land, exemption from air, water, and land pollution regulations, and the ability to back out of pension and healthcare costs are all examples of how governments regulate – and tax – people on behalf of the coal industry instead of the other way around.

A regulator might defend their protection of the coal mining industry by pointing out that in various places around the world, such as the Navajo Nation in the US Southwest, the industry has guaranteed employment. Switching to solar or wind in the vicinity of coal mines and closing the mines down cannot easily compensate for the social costs associated with the lost employment because the solar industry requires skills the coal miners don’t have. This is a serious tradeoff that can be easily ignored by some.

Not to go down the conspiracy theory rabbit hole, but is regulatory capture behind the phenomenon noted in a recent article in The Guardian? The article describes the findings of a report by Climate Rights International that “exposes the increasingly heavy-handed treatment of climate activists in Australia, Germany, France, the Netherlands, Sweden, the UK and the US…. [The report] also highlights how these same governments frequently criticise regimes in developing countries for not respecting the right to protest peacefully.” 

So, what is a disruptor – whether a new upstart with an innovative technology, a whistleblower, or an activist – to do when policies and regulations are applied unevenly within a given regulatory domain?

Like many of the challenges of the energy transition, there are no easy answers to this strategic challenge. The most effective response is likely different in each situation, and I don’t have a specific solution to offer.

The point is that when analyzing the context for a strategic decision, teams must factor in theses sorts of obstacles, the kind which might have to be taken as a given that must be navigated around rather than the kind that can be changed through smart decisions.

Our PRISM framework at Tilt Global and the immersive experience of the Decision Making Lab prepare teams to make better, faster decisions in the face of regulatory capture that protects competitors as well as all sorts of other obstacles.

I confess.

I love the concept of product positioning. When used effectively, a positioning analysis becomes a super effective tool for strategic decision making.

Maybe it’s the way I was taught it, but it’s a concept that I find so useful as a way to add structure to what might otherwise be a jumble of data.

There are a lot of what I consider bad, or at least unhelpful, definitions of product positioning, but I think Google’s AI overview of the concept nails it. To paraphrase, positioning is how something (product, service, company, technology, whatever) compares to similar somethings (product, service, company, technology, whatever) in the minds of those who might consider using the product, service, company, technology, or whatever.

It even works when comparing political candidates on dimensions important to you.

To perform a positioning analysis, there are just a few steps:

1️⃣ Identify criteria (e.g. size) by which you want to compare the somethings you are analyzing.
2️⃣ Identify the opposite ends of the spectrum of each criterion (e.g. big, small)
3️⃣ For each something, score it along the spectrum for each criterion.
4️⃣ Learn from your work.

Let’s look at an example: energy resources (our favorite subject at Tilt Global.

Those who study energy resources have identified six performance dimensions:

➤ Continuity: the ability to deliver a continuous flow of energy
➤ Dispatchability: the ability to respond to fluctuations in demand
➤ Density: the ability to provide high levels of energy in a compact form
➤ Scalability: the ability to deliver energy in appropriate amounts
➤ Availability: the ability to deliver energy any time and any place
➤ Minimality: the ability to minimize contamination of or disruption to the natural environment

Without doing a full analysis, it’s easy to see the differences this sort of approach highlights. An energy resource like coal scores high on Density and low on Minimality; it burns hot enough to power smelters but scars the land and pollutes the atmosphere. Solar power, on the other hand, scores low on Density and high on Minimality; the sun will charge a battery without damaging the environment, but it’s a poor choice for smelting aluminum.

Here’s where the power and challenge of positioning analysis really kicks in – there is no one right answer. The right positioning depends, first, on who you ask. A scientist rating energy on these dimensions will produce a different answer that the general public.

Positioning also depends on the need that the something (product, service, company, technology, whatever) is serving. Some needs require emphasis on certain dimensions while others require a focus on others. As a strategic decision-making tool, positioning analysis is a powerful way to identify opportunities to carve a place in the market or distinguish one’s something from the competition.

It also highlights opportunities for innovation.

When the demand for energy outstrips the supply of clean energy sources, the decarbonization movement suffers. 

Consider a few examples you may not have heard of that demonstrate the complex dynamics of the energy transition.

First, there is the case of the startup CarbonCapture Inc., a carbon capture and sequestration (CCS) operation that builds facilities to remove CO2 from the air and store it permanently by returning it to the long carbon cycle underground. Sightline Climate (CTVC) reported earlier this month that CarbonCapture has scrapped plans to build Project Bison, the largest CCS facility to date in Wyoming. The issue is that the company simply cannot get access to enough clean energy due to competition from data centers and crypto miners. Because they don’t want to dilute the impact of their efforts by using carbon-based energy to pull CO2 from the air, they’ve decided to seek another location where they can access an ample supply of non-carbon-based energy.

Increasing energy demand is also contributing to a bit of a resurgence of the fossil fuel industry. About a year ago, for example, the International Energy Agency (IEA) released a report showing that coal demand hit an all-time high in 2023. As CNN reported at the time, “Panasonic built a new electric vehicle plant in Kansas to aid its transition to clean energy. But the factory’s vast energy needs have led the county where the factory is located to extend the life of a local coal plant.” 

You read that correctly. Demand for clean energy solutions is extending the life of the highest carbon-emitting and dirtiest energy source. How’s that for a conundrum?

Another example – earlier this month, the The Seattle Times published a story with the headline “AI boom is driving a surprise resurgence of U.S. gas-fired power.” They wrote, “From Florida to Oregon, utilities are racing to meet a surge in demand from AI data centers, manufacturing facilities and electric vehicles.

The Bison Project and the Panasonic project are both good illustrations on the part of the producer to supply the market with clean energy. But the energy demand is associated with what the user of the energy would support. The Panasonic case, especially, illustrates that what the user wants is energy, pure and simple. Neither CarbonCapture nor Panasonic could supply the demand sufficiently with just clean energy.

Resource Availability is one of the elements of the PRISM framework for systems-based contextual analysis that we use at Tilt Global. Understanding not just how your strategic decisions are constrained by access to certain resources but how decisions you make will ripple through the available resources for a given context is critical to effective decision-making.

These are the sorts of complex questions we are set up to help you think through.

The team at Tilt Global is excited to announce the first four members of our Advisory Council. We have assembled a diverse collection of professionals with deep expertise spanning electric utilities, distributed grid technologies, corporate strategy and operations, and leadership development.

Each member of the team brings something unique to the table and has committed to helping Tilt Global achieve its vision of empowering change through better decision making within leadership teams navigating the fast-evolving context of the global energy transition.

Ken Colburn is currently Principal at Symbiotic Strategies LLC. Formerly, he served as Principal and Director of U.S. Programs at Regulatory Assistance Project (RAP); as Executive Director at NESCAUM; and as Director at NH Electric Cooperative.

Anna Demeo, PhD is currently Partner at Climate Tech Strategy Advisors. Previously, she served as Co-Founder & President at Racepoint Energy , CTO at Savant Systems, and CPO at Fermata Energy.

Tim Grant is a former client of Tilt Global’s predecessor company and former VP Global Mergers & Acquisitions; VP Area Director for Southwest US & Latin America; and VP, Assistant to the President at Avnet

Loretta Kuhland, MA, SPHR, CCP, DTM is President at Performance Management Services. Formerly, she served as Managing Director at Cushman & Wakefield and Vice President at Credit Suisse.

How could household income and geographic differences influence the priorities placed by individuals on the 3 primary tradeoffs of energy sources – Reliability, Affordability, and the Environment? And what could this sort of analysis teach us about decision-making?

To make sure we’re aligned on our understanding of these terms…

Reliability refers to the extent to which we can depend on a source supplying energy when we need it. Coal and natural gas score high on this one because you can burn these fuels indefinitely provided the mines keep producing fuel to burn. Solar, without battery storage, doesn’t score as highly; the sun doesn’t shine at night, or when it is cloudy or rains, or as much in the winter.

Affordability is obvious – how inexpensively can a source of energy be delivered. Energy based on resource extraction tends to have constant or rising costs. Depending on the location, wind and sunshine may be abundant, and generation is free with the manufacturing costs of solar panels and wind turbines per kWh on a steep decline over time.

Environment refers to the impact of a particular energy source on the world around us. On this dimension, fossil fuels score poorly, whereas solar, wind, and wave-powered turbines score highly.

Consider three families:

➤ Family A earns 3x the national average and lives in a temperate climate like Seattle where few days are exceptionally hot, and few are exceptionally cold.
➤ Family B’s wages are at the national average but live in Denver, where temperatures hover around 100 Fahrenheit (38 Celsius) for weeks on end in the summer and can stay in the single digits Fahrenheit (-17 to -12 Celsius) for multiple days in a row in the winter.
➤ Family C earns half the national average and live in Minneapolis where summers can get hot, but winters can be long and bitter cold.

To keep it simple, let’s just think in terms of relative priorities. How might each family rank the three tradeoffs?

➤ Family A might respond Environment, Reliability, Affordability. They have the financial resources to think long-term but still want the heat to work on those winter days when the mercury drops.
➤ Family B might say Reliability, Environment, Affordability – provided cost don’t rise too steeply. If Excel Energy jacks up the rates and blows their careful budget, affordability is likely to rise in importance.
➤ Family C, on the other hand, is likely to say Affordability, Reliability, Environment. In the winter, Affordability and Reliability could change positions.

Context matters. Climate mandates that assume every population, within regions and around the world, has or should have the same priorities ignore this fact at their peril.

The same goes for leadership teams who set objectives and make decisions assuming uniformity of priorities across a large enterprise. At Tilt Global, we help leaders discover and map out these context differences to make better decisions in the face of complexity.

One of the keys to a successful application of a systems thinking approach to any sort of analysis is the ability to understand systems operating within a very wide or very narrow focus. Sometimes you have to zoom out to see the macro-level system and then zoom in to understand systems at a more micro level.

“Micro” is relative, of course. Sometimes “micro” can refer to a cross-sector supply chain. Boston Consulting Group (BCG) provides an outstanding case study by David Young et al looking at the supply chain for raw materials for a wind power OEM through a systems lens using their SWITCH-GT Systems Workbench.

In this example, BCG illustrates the need for looking at demand for manufacturing inputs across multiple industries such as solar, storage, auto, buildings, and aviation rather than focusing solely on the wind industry. Such an analysis may lead a manufacturer to select a different material due to a potential shortfall of their first option, which could then have cascading effects among a different set of players.

At Tilt Global, we agree wholeheartedly with BCG’s statement that a “systems lens offers [corporate leaders, policymakers, and investors] the broadest possible view of energy transition dynamics—which in turn will help them make better decisions for businesses and for the planet.”

In our Decision Making Lab, leadership teams apply our PRISM systems framework to analyze current context at a macro level across five dimensions – Public Policy, Resource Availability, Institutions, Science & Technology, and Market Systems. Just as BCG stresses the importance of analyzing demand for raw materials across sectors in their case study, PRISM requires understanding of the interactions of the five dimensions among one another. For example…

➤ How might public policy impact scientific and technical innovation?
➤ How do institutions like traditional industry business models constrain or create opportunities within market systems?
➤ How does increased consumer demand in a market system, driven by a new technology, cascade into changes in demand for resources like a workforce skilled in a particular area?

Leadership teams can use PRISM to perform a macro-level strategic contextual analysis and tools like BCG’s SWITCH-GT to dive into the micro-level systemic details within a specific PRISM dimension.

Suffice it to say, we like the way BCG thinks.

In terms of the changes required to reduce greenhouse gas emissions, people are a big part of the problem.

What if we let people be people, without trying to change them?

I may be stating the obvious, but the challenges of altering human behavior are worth unpacking a bit because of what those challenges mean for enterprises and other organizations seeking to make a positive contribution to the clean energy transition.

Consider, for instance, Jevon’s Paradox.

As far back as 1865, William Stanley Jevons observed and noted in his book “The Coal Question” that efficiency gains in coal production and distribution resulted in an expanded set of use cases.

In other words, when technological progress increases the efficiency with which a resource is used, consumption of that resource tends to go up because of increasing demand – Jevon’s Paradox.

Another, more recent example. Fuel economy standards set by governments contributed to an ongoing increase in fuel efficiency (mpg or km/L depending on where you live) over time for passenger cars, pickup trucks, vans, sport utility vehicles, and crossover vehicles. Over the same period, total gasoline consumption for these vehicles has increased because of the number of vehicles in use and the number of miles traveled per vehicle.

In other words, regulations intended to lessen the impact of personal transportation on the environment are correlated with increased miles driven, likely contributing to greater emissions of carbon into the atmosphere. There are legions of environmentalists who will claim there are extenuating factors, but the correlation between increased fuel economy and miles driven cannot be contested.

An argument could be made that fuel economy standards were entirely misdirected. Rather than regulating fuel economy, why didn’t officials focus directly on the problem – the reduction of emissions. How different would the course of innovation in personal transportation have been if they did?

What does that mean for environmentally minded organizations, including enterprises and government regulators? It means that cause and effect, stimulus and response, action and reaction are far from straightforward calculations when an assumed change in human behavior is part of the equation.

What if… (we like “what if” questions at Tilt Global)… what if we approached the energy transition from a position that didn’t depend on changes in the consumption behavior of individual humans? What if we took human behavior as a constant to be worked around, not a variable to be altered? How would that change the way governments regulate and the way enterprises innovate?

What if we empowered your enterprise or government organization to think this way, to make better and faster decisions that account for the complex realities involved in navigating the transition to clean energy?

Contact us to learn more about better decision making for your team.

What is it about the discussion on climate change that makes it so difficult to get agreement on the nature of the risk? Because if we can’t even agree that a problem exists, how are we ever going to agree on a path forward?

Precedents exist where collective action has been successful in responding to an environmental threat. The best example is the Montreal Protocol in which nations and markets responded to the threat of chemicals to the ozone. The United Nations treaty aimed at the problem is the only to achieve universal ratification.

What’s different about climate change that keeps us from simply replicating what worked with that example?

1️⃣ Carbon combustion is not just an industrial process, it is woven into the global cultural fabric. The roar of an engine and the feeling of freedom with which this sounds is intertwined isn’t met by the quiet hum of an EV.

The connection between carbon combustion and cultural identify goes beyond personal transport. Individuals, families, and even whole towns pride themselves on their place in the industrial movement. Being a coal miner or roughneck is not just a job; it’s a personal identity.

2️⃣ Although the ozone problem was global in scope, economic dependency on carbon-based energy is exponentially larger. Not just a chemical component of processes and products, carbon is arguably the foundation of industry. The scale of changes required to move to carbon-free energy simply cannot be compared.

3️⃣ Incalculable wealth has been generated using carbon-based fuels. The idea of interrupting that financial engine understandably scares a LOT of people, both those who depend on it paycheck-to-paycheck basis and those who have built generational wealth. Taking that income away is elicits pushback of epic proportions.

4️⃣ The science is highly complex, making it difficult for the average person to wrap their head around the problem. Embracing the changes required to convert to carbon-free energy requires either a great leap of faith or reluctant compliance.

5️⃣ Pessimistically, people are selfish, and the impacts of climate change seem like a problem for future generations. Asking people to make a sacrifice now in order for those not yet born to benefit is tough for many. Consider how often grocery carts are left strewn rather than returned to the corral a few steps more distant.

Decision making required to solve difficult problems requires alignment among those involved on a few dimensions:

➤ A problem exists that is worth solving.

➤ The root cause of the problem is discoverable.

➤ The problem is solvable with available resources

➤ The action required to solve the problem and the costs involved are acceptable.

At Tilt Global, we empower teams with the capacity to make the decisions necessary to align not just on what the problem is but how to address it. These are fundamental steps that are actually an antidote to so-called Group-Think, a shared abandonment of thinking of thinking for oneself.

What if…? Why not…?

These are the types of questions we like to help clients ask. For example, what if the world wanted to get serious about carbon removal from the atmosphere by building an industry that would focus exclusively on promoting the long carbon cycle?

For those who don’t know, the short (or fast) carbon cycle completes within years, moving carbon between the atmosphere and biosphere. The long (or slow) carbon cycle operates over millions of years, moving carbon between the earth’s crust and atmosphere.

What systems would need to be institutionalized to build such an industry? As an experiment, we asked ChatGPT. Here’s what it said – or possibly plagiarized…

Carbon Capture and Storage (CCS) Infrastructure
➤ Expansion of CCS facilities to capture CO2 from industrial sources, power plants, and directly from the atmosphere
➤ Investment in mapping of geologic formations where captured CO2 can be stored for millennia

Regulatory Framework
➤ Laws and regulations that mandate and incentivize long-term carbon storage
➤ Robust carbon credit systems that reward long-term storage and avoids double-counting with short-term sequestration

Research and Development
➤ Investment in discovery of materials that can enhance efficiency and reduce energy requirements of CCS technologies
➤ Improvement of models to predict long-term stability of stored CO2 and establish global monitoring networks

Economic Incentives
➤ Government funding and incentives for companies operating in this new industry
➤ New and enhanced carbon pricing mechanisms that encourage investment in long-term storage

Public-Private Partnerships
➤ Collaborative projects between governments, private companies, and research institutions
➤ Promotion of international cooperation to standardize and share practices and fund large projects

Education and Advocacy
➤ Public awareness campaigns on the importance of the long-carbon cycle
➤ Training programs for engineers, scientists, and policymakers

Financial Models and Insurance
➤ Institutional-grade financial products and investment funds focused on long-term carbon storage projects
➤ Insurance products to cover potential risks like leakage or seismic activity

Global Standards and Accountability
➤ Global standards for measuring, reporting, and verifying long-term carbon storage
➤ Creation of institutions responsible for monitoring and management of storage sites

What’s your enterprise’s “what if…” or “why not…”? We empower leadership teams to ask these questions, identify the elements of a long-term strategy that must be addressed, make smart decisions about where and how to begin, and be prepared to adapt plans based on a changing context.

Follow Tilt Global for more content on the challenges of navigating the energy transition and how we can help your team make better, faster decisions with confidence.

Decision making in the face of uncertain governmental policy is incredibly difficult, and never is policy in the U.S. more uncertain than in a Presidential election year. With the executive branch and both houses of Congress up for grabs and more than two months to go before the election, it’s anyone’s guess as to how things will turn out.

In terms of climate and energy policy, what is at risk is the Inflation Reduction Act (IRA), a collection of measures signed by Joe Biden in 2022 intended to counter high inflation and promote climate protection in the U.S. The IRA includes a mixture of direct investment, tax credits, and funding for climate tech. The act’s impact is not limited to the United States. BDI – Bundesverband der Deutschen Industrie e.V., “The Voice of German Industry,” pointed out in an article from August 2023 that the IRA has triggered concerns about the future of Europe as an investment location as a result of “Buy American” provisions and tax credits that put European companies at a disadvantage.

In a highly simplified nutshell, if the Republicans find themselves on the winning end of a sweep of the Presidency and both houses of Congress, the IRA is at risk. If the Democrats take victories across all three, the IRA is safe and may be expanded. Sightline Climate (CTVC) provides a far more complete analysis of the implications and risk level for the IRA in its newsletter under all of the different scenarios. It’s worth a read.

What the CTVC analysis and the BDI article illustrate is the extent of uncertainty that exists, how many different scenarios are at play, and how broadly policy changes in one region have ripple effects around the world.

Public policy is but one of the factors that makes decision making difficult for leadership teams and investors attempting to navigate the energy transition. At Tilt Global, our PRISM framework for context analysis is a powerful tool for defining the box you are in, the first step to discovering out-of-the box solutions to challenging problems your team is facing.

“There’s no reason why anyone should buy anything but an electric car now.”

That’s what my neighbor said to me after he recently bought a Chevy Bolt.

“That’s a bit hyperbolic,” I said.

Unfortunately, that’s where the conversation ended because he was on his way out, and I’ve found myself less and less interested in discussing topics in which I perceive the other person to be so zealous in their opinion that they are closed to actually listening to mine.

The thing is, I’m not even that far off in my opinion compared to his. I think for many, many people, electric vehicles (EVs) would serve their everyday needs as well as a traditional internal combustion engine (ICE) vehicle would. The price point has become competitive for those not shopping at the very bottom of the market, and the range more than exceeds most drivers’ needs.

Where he lost me was the no-room-for-debate, absolutism of his statement. I can think of plenty of reasons why someone wouldn’t want an EV.

💰 Purchase price most certainly is a factor for some.
🛣️ There are those who regularly need a longer-range capability without the burden of extended stops to power up.
🔌 Charging stations are anything but ubiquitous, creating a major inconvenience for some.
🌨️ Not every location is equally conducive to EVs due to the stress the local climate puts on the battery.
🛻 Some people need the hauling capacity of a real pick-up truck. And no, neither the Rivian nor the Tesla Cybertruck counts.
🤡 Finally, Elon Musk is the face of the electric vehicle market, and he is not universally popular.

This example is indicative of a problem with the discussion on climate change and the renewable energy transition: when you overstate your case, you risk a backlash that inhibits progress.. You move from problem-solving into advocacy. Problem solving is objective; advocacy is personal.

Further, overstating contributes to two problems that affect decision making.

The first is Framing Bias: the fact that two parties can have access to the same data and draw different conclusions. This problem often occurs when looking at a subset of the data and building a story around that limited data.

The second is Confirmation Bias: the tendency to justify the commitments by using data that agrees with their point of view and ignoring data that does not agree.

By overstating, my neighbor exhibited Framing Bias by leaving out the data that represents reasons why EVs may not be right for everyone. I exhibited Confirmation Bias by not going back to him to ask what led him to make such a statement.

Both of these biases got in the way of solving the problem of coming to a shared understanding of each other’s point of view.

When leadership teams display this sort of behavior, it is very difficult to align on the strategic obstacles a company faces, not to mention to align on the direction a company should go. At Tilt Global, we helps teams surface these types of obstacles to effective decision making.

What seems like a more attainable goal – committing to run or walk 1,000 miles in two years or committing to ten miles next week?

I’d be willing to bet that the vast majority of you said that covering a total of ten miles next week feels more achievable.

Why? Well, a lot can happen in two years, and 1,000 miles is, after all, a loooong way to walk or run. Ten miles next week is only 1.4 miles per day or 2.5 miles every other day.

There’s a reason why terms and phrases like “baby steps” and “one day at a time” and “progress, not perfection” are in our lexicon. Envisaging steps along a path are much easier to embrace than staring down a lofty end goal.

It’s like the old joke about how to eat an elephant – one bite at a time.

The goals of the Paris Agreement on Climate Change are no different. Current projections are that the entire world must cut emissions by 28% by 2030 to stay on track for limiting the average temperature increase to 2.0 degrees Celsius or 42% for the more aggressive 1.5-degree goal.

Global greenhouse gas emissions increased by 1.2% from 2021 to 2022. They grew by another 1.1% in 2023. Why aren’t we looking at smaller, incremental changes rather than a mandate that looks completely unachievable from where we currently sit?

There is no justification for the timelines associated with climate mandates. Companies and individuals simply aren’t capable of making the kind of decisions necessary to eat an entire elephant at once.

There’s a better way. At Tilt Global, we empower change by helping clients make better, more achievable decisions in the face of a fast-evolving world. Talk to us to find out how we can put your company on the path to change.

“A rising tide lifts all boats.”

If you been in business even a short time, you’ve likely heard that adage. If only it were universally true.

The team at SunPower Corporation sure wishes that was the case. This former giant in the residential solar market ($9bn market cap in 2021) announced recently that it was filing for bankruptcy.

In a market where growth in solar is still at an all-time high, rising interest rates and regulatory changes in California contributed heavily to SunPower’s demise. Interest rates increased the cost of already pricey solar projects, and California reduced the amount homeowners are paid for sending excess solar power back to the grid by 75%. Sightline Climate (CTVC) reports that change resulted in a 20% decrease in residential demand for 2024.

Combining those changes with departure of its CEO, an SEC investigation, and debt default in 2023, Sunpower was left with no choice.

Yes, renewable energy is booming, but unexpected events like these can sink the ship.

This is the sort of energy transition volatility we help clients navigate.

Heavy industries in Japan are actively seeking & developing secure energy sources that are also less carbon intensive.  How can capex planners in these industries evaluate possible scenarios?

In 2022, commercial and industrial users accounted for about 61% of Japan’s total energy use. (Transportation accounted for about 24%, and households for the remainder.) The steel, pulp and paper, cement, and rail transport industries are actively seeking non-fossil sources of energy.  As they commit to new systems, energy technologies will continue to change.

The latest mid-stream summary of Japan’s current strategic energy plan cites a few broad strategies for changing Japan’s energy mix. Among these:

▶ Restarting the majority of Japan’s light water nuclear reactor fleet;
▶ Continuing to evaluate and plan infrastructure for hydrogen and ammonia to be used as energy sources or energy storage media for the steel and power generation industries;
▶ Ongoing deployment of renewable generation capacity, supported by a feed-in tariff.
▶ Improvements in renewables: perovskite solar cells and new battery chemistry that will make energy storage cheaper and safer.

The big question is, how does a planner at a heavy industrial concern account for accelerated technological change and discovery of new resources? Omissions from the list above include fusion power; the substantial methane hydrate resource on the seafloor around Japan; and the recently demonstrated photomolecular effect, which has deep implications for the nexus of energy and water.

To make good decisions, managers must learn to confront complexity and resist the temptation to oversimplify the situation.

Tilt Global provides a super-accelerator for group decision making that empowers executive management teams facing the complexity of the energy transition to navigate this fast-evolving market.

Private equity-owned businesses often need a fresh approach.

New strategies, new direction, sometimes new leaders.

We accelerate strategic alignment and leader capacity, empowering team execution.