After more than two decades in consulting, Jurgen Weiss joined the Harvard Business School faculty in 2020 as a member of the Business, Government, and the International Economy Unit. He currently teaches the first year BGIE core course and is developing an energy focused second year elective course. His research and consulting work focus on the fundamental transformation of the energy industry in light of rapid technological change and climate change-related pressures. Professor Weiss is a faculty affiliate of BEI.
In this interview with Rebekah Emanuel, Professor Weiss outlines his decision to join HBS, his plans for the classroom, and the major changes he anticipates across the energy industry to confront climate change. Emanuel is Director of Social Entrepreneurship at Harvard’s Innovation Lab and the host of the third season of BEI’s Climate Rising podcast, to be released this spring.
Rebekah Emanuel:
Can you tell me a little bit about the topics you plan to cover in your course and what kinds of people you're hoping will sign up to take it?
Jurgen Weiss:
The energy industry is in an early phase of fundamental transformation. The way I see the course now is to make sure that every general manager understands the role of energy in the world.
Part of the course will explore how energy enables our prosperity, enables our economic activity. But I want to spend the bulk of the time thinking about what kinds of transition might take place over the next few decades. What are the drivers of that change? What are the obstacles? And what does that imply for all sorts of players in that energy space, both traditional firms and all the new technologies that already exist and have to grow, and the new technologies that don't exist yet?
It's a great course for people who are concerned about climate change since the energy sector is the largest contributor to greenhouse gas emissions. But I want it to be equally a course for people who are interested in working in the traditional energy field or in the new energy field and want to understand what the opportunities and challenges are.
Rebekah Emanuel:
Why did you decide to come teach at HBS? What about this opportunity was interesting to you?
Jurgen Weiss:
The last 20 plus years, I have been working as a consultant in the energy space and trying to focus on issues that are at the intersection of energy and the environment. Over the last few years, I increasingly thought about how I can have a maximum impact on guiding, fostering, and encouraging the transition to a carbon free energy system that is needed to deal with climate change threats. At this stage of my career, I am motivated by the desire to have a deep impact. I think Harvard and HBS are a unique platform for influencing and shaping future leaders in a way that gives us a better chance of dealing with the climate crisis.
Rebekah Emanuel:
It sounds like you're investing in people as a mechanism for change.
Jurgen Weiss:
I'm an economist, but even so I've come to the conclusion that addressing climate change is not really an economic or an engineering problem at this point. The technologies are mostly there. The economics are not very challenging, but it's really an issue of social change, of accepting that in order to avoid the climate related risks, we have to act fast.
Rebekah Emanuel:
Climate scientists tell us we have maybe 30 years to bring carbon emissions down to something approaching zero. How do we get there?
Jurgen Weiss:
If we aim for zero and don't get to zero, that is still a lot better than not aiming for zero or not moving forward aggressively. The reality is that any reductions to our greenhouse gas emissions that we implement over the coming decades are going to lower the risks of catastrophic harm.
Rebekah Emanuel:
What kind of changes do you think students can expect to see in the energy sector?
Jurgen Weiss:
As your last question implied, there is a potential to decarbonize a deeply carbonized energy system. That means a likely much diminished role for fossil energy sources and a much increased role for non-emitting sources of energy.
It doesn't mean that if you are currently working or interested in the oil and gas industry that you're going to be out of a job, it just means it creates important challenges, but also opportunities for those industries. Just as if you are really excited about working in the renewable energy field, it would seem like the opportunities are limitless, but there are also challenges. What I'm hoping to do at the school is highlight both the challenges and opportunities for both the existing technologies and for newcomers.
Rebekah Emanuel:
Tell me about the challenges and opportunities as you see them.
Jurgen Weiss:
In this transition to a zero carbon energy system, we have to maintain a reliable energy supply throughout. So, there is potentially a role for these current technologies just to make sure we have enough energy if the policy processes are too slow to decarbonize it over the next 30 years. It's possible that the expertise in the traditional energy sectors will be very important in a carbon free energy system. There may be opportunities for the existing providers to reinvent themselves in ways that leverage their existing skills and play a critical role in enabling the transition.
Rebekah Emanuel:
You've written that Uber and Lyft can potentially make electric cars more common and faster than we thought. Can you walk me through it?
Jurgen Weiss:
Companies like Amazon or FedEx or UPS that own all the delivery trucks look much more closely at the total cost of ownership. For that reason those fleet operators are now moving very rapidly to replacing their fleets with electric alternatives, because the fleet vehicles that are now being produced will have a lower total cost of ownership than the trucks they're currently using. So, you see huge orders by those companies. And the same will be true for the Ubers and Lyfts.
Rebekah Emanuel:
Tell me what this means for utilities.
Jurgen Weiss:
It's important to recognize that to the extent electric vehicles become important or to the extent that decarbonizing our economy drives action, that provides huge growth opportunities for the utilities. It also creates challenges both in terms of what kind of infrastructure do utilities need to build, and importantly, when do they have to build it?
Rebekah Emanuel:
Conventional wisdom is that powering our electricity without carbon is going to be expensive, but you've said the economics of the energy transition are not very challenging. How's that possible?
Jurgen Weiss:
In many parts of the world, solar, and to some extent wind, can now be built at costs that are cheaper at the very least than the cost of building a new fossil power plant, and increasingly seem to be cheaper than the fuel that powers the fossil power plants. So, there are places in the world now where it makes sense to shut down a perfectly fine fossil plant and replace it with a solar farm because you save money on the fuel itself.
That said, a decarbonizing electricity system will need other investments to ensure that power can be supplied reliably all the time. And while the continued decline in costs for solar and wind will likely help keep overall costs down, the relative importance of these other so-called integration costs will likely increase. The good news is that some of the key technologies needed – batteries, demand response, hydrogen, etc. are also seeing in some cases very significant cost reductions. Hence, even before considering new approaches and technologies, I doubt that, even using only today’s technologies, an ultimately fully decarbonized electricity system will be much more expensive than it is today.