What do young executives think about energy?

What do young executives think about energy?

On average they are around thirty. They will be the executives of the near future. They will have to make far-reaching decisions in the coming decade. Especially on the energy issue. Last week a group of 70 students who are about to earn their MBA degree at IESE staged a round of debates on the subject of energy.

Under the guidance of IESE professor of strategic management Massimo Maoret, each team had to defend a position on the hot topics in this sector, which are currently causing so much debate, with arguments, and, if possible, convince the audience. In the end, the class had to give their final judgment. What does the management class think will set the course in the coming years in relation to energy? Without intending to be statistically relevant, the results of the polls after the debates allow a representative profile to be obtained.

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If a profile were to be made based on their answers, the young manager as he emerged from the academic debate would mostly have the following positions: he believes that nuclear energy and gas should be considered green energies to facilitate the energy transition; he believes that it would be necessary to nationalize certain firms in the sector to stop the escalation of prices; He considers that carbon border adjustment mechanisms are a good system to promote decarbonization on a large scale, while he views carbon capture mechanisms as a tool to fight emissions with some suspicion.

On the other hand, this executive in his thirties does not have a clear position on two issues: the European Union’s ban on the sales of internal combustion engine vehicles by 2035 and the current mechanism for setting the price of electricity through the marginal price. An internal conflict: there was practically a tie between yes and no.

Unlike society, which tends to have very polarized positions on these issues, young people admit that not everything is always black or white, but that there are gray scales.

It should be noted that IESE teaching staff in no case advocates or defends specific positions, but has limited itself to putting managers before the decisions that they will surely have to make in the coming years, whatever the sector. Because it seems that the issue of energy is destined to stay in the debate for a long time.

And all this, without taking into account a not minor detail, of a pedagogical nature: the students, depending on how the exercise was planned, had to defend a position with which they did not necessarily agree. Putting yourself in the opponent’s shoes is the best way to doubt. And be a good executive.

26052022 View of the Ascó nuclear power plant and the river Ebro River on the occasion of the oil spill that has occurred during the week Supposedly from the power plant

Green label for gas and nuclear

The Commission has accepted that gas and nuclear power are considered green energy. The students highlighted the stability and low emissions of the atom, the fact that the gas can replace coal and is a bridge technology towards the use of hydrogen. The alternative of renewables and the risks of nuclear were some of the arguments against.


What to do with the combustion engine?

The EU establishes a ban on the sale of vehicles with combustion engines in Europe from 2035. The critical position maintains that the deadline is very tight, that electric cars continue to be expensive, possible job losses and lack of electrical network infrastructure and parking. Those who support the measure, highlight the reduction of emissions and the support of public incentives.

FILE - Project developers plan to build carbon capture pipelines connecting dozens of Midwestern ethanol refineries, such as this one in Chancellor, SD, shown on July 22, 2021. The Environmental Protection Agency on Thursday, Dec. 1, 2022, proposed increasing the amount of ethanol and other biofuels that must be blended into the nation's fuel supplies over the next three years, a move welcomed by renewable fuel and farm groups but condemned by environmentalists and oil industry groups.  (AP Photo/Stephen Groves, File)

Capturing carbon is expensive

To achieve emissions neutrality by 2050, one of the solutions would be to implement carbon capture and storage technologies (CCUS). But these technologies are very early, expensive, capital-intensive, and can derail other, easier-to-implement decarbonization initiatives.

Electric power transmission pylon miniatures and EDF (Electricite de France) logo are seen in this illustration taken, December 9, 2022. REUTERS/Dado Ruvic/Illustration

Nationalize if necessary

That the State assume control of the energy firms is an option that is gaining supporters. It underlines how these companies have better stability, a greater commitment to the energy transition, long-term investments, care for workers and access to security systems, beyond the search for benefits.

Electrical power pylons of high-tension electricity power lines are seen in front of the Electricite de France (EDF) coal-fired power plant in Cordemais near Nantes, France, December 12, 2022. REUTERS/Stephane Mahe

How to set the price of electricity?

There are those who advocate reforming the current marginal price mechanism. They argue that it is not efficient and that large companies can influence to achieve greater benefits. Another group defends the system because it believes that it provides a price based on supply and demand and that instead of capping gas it would be better to intervene by limiting the income of some technologies to alleviate customer bills.


Tax pollution from outside the EU

It has been one of the key decisions in Brussels this week. IESE students believe that it is heading in the right direction. It sets global standards for decarbonisation and a paradigm for global value chains, creates jobs within the European Union and prevents relocation to more polluting countries.

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