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SS: Hello. And welcome to the podcast by Lørn and ONS Energy Talks. My name is Silvija Seres, our topic is energy and my guest today is Frode Hvattum. Or Frodo. The Chief Strategy Officer from a Norwegian company in transportation called Ruter. Welcome, Frode.
FH: Thank you.
SS: Frode, you have two hats today. You are the Chief of Strategy for Ruter, and you’re the chairman of the board for WWF - World Wildlife Foundation.
SS: So we’ll talk both about the energy side of transportation, but also about sustainability and the environment. Before we do that I’d like you to say a few words about who you are and what you do.
FH: So, name Frode, but people who don’t speak Norwegian call me Frodo, the only way to make them remember me. As you mentioned, I work both at Ruter and I’m honored to be the chair of the Norwegian WWF, and I call myself a Sustainable Strategist. So, basically, I’ve studied and worked in strategy all my life. I was in Sri Lanka 17 years ago and since then I decided to have a job that makes a difference, mainly in the area around sustainability, environment, and climate change. That’s actually driven my career both at Ruter and as a chairman for WWF. Before then, when I was building up and running an entity within Accenture called Sustainability Services.
SS: So, how does one work on sustainability? It’s one of these topics that is important, big, and complex, and then it becomes so big it’s hard to move the ball or then needle – how do you do that?
FH: That’s the fun thing about being a strategist right – if you like working on things that are important and complex I think a lot of people want to work with it. If you are an educated strategist you’re kind of used to trying to understand a complex thing, break it down and start making a change. So, if you have that capability or if you learn that, and at the same time really have a passion to make a change, then I think you have to work with sustainability in the strategy sphere. I saw that working as a consultant. It was the best people who started working on this topic. Some of these people were there because they really wanted to make a change, some of them just wanted to have the biggest challenge, ever, and make a change in that area – which in energy, climate, circular economy, all in the area of sustainability.
SS: I have a feeling that absolutely every energy company in the world, since maybe a year ago, is thinking about sustainability and environment in a more practical way and urgent way than they did before – why? Are we finally beginning to believe the numbers from the different reports? Is technology providing new solutions? I have a feeling that you’re finally becoming the hottest strategy guy, not just kind of a green-washer – why?
FH: Well, it’s true as you say, because also my experience when I was hoping to be the hottest strategist in the world at Accenture, it was too early. A lot of CEOs and relevant people were interested in talking to Accenture when I was talking about sustainability, but they weren’t ready to engage in bigger projects.
SS: They weren’t ready to take the cost.
FH: No. They were ready to learn, they were engaged to want to have it in a brand, but to make it has an impact on the bigger decisions in terms of strategic direction, in terms of investment, in terms of what not to do, it was very, very few companies who were there at that time. Now, yes, it’s a totally different time. So maybe I should’ve been a consultant right now. But I think there are many things coming together, and I think that the facts in some parts of the companies have been there for five years, I would imagine. But first of all, you see that a lot of the predictions are going faster. Either if it is electricity, solar panel technology, renewable energy, batteries – things are happening a lot faster in some areas of technology. Secondly, after the Paris Agreement and now with the regulations in place with the COP, it’s an important framework that’s not just political talk. FH: The politicians understand that they have to start being transparent about where they are, where they want to go. The EU funding is starting to directly leverage the sustainable development targets. So we have a lot of those institution processes and laws and regulations that are also coming into place. I think those are the two biggest changes. I was hoping it was going be more what the people would demand, not sure that’s the case in terms of customer perspective of society.
SS: I think people need examples, they can’t think in percentages or millions on some things, they need to see how a certain island was flooded or how certain species, that they really care about, have gone extinct. Cumulatively we’ve reached some sort of a point where the cities are too polluted so that do something material about this thing.
SS: I’m also fascinated by the whole cross-functional nature of these things. We often talk about sustainability related to the environments, but really all these SDGs are also very social in their nature [Sustainable Development Goals]. I like when I asked you «What are you really doing?», you said, «Well, you know, I’m searching for a way to steer public transportation towards the social societal values we create.». I think I know what you mean, but I would like you to talk more about it.
FH: Well, I think if you listen to the politician why they have public transportation some would say it’s to solve the traffic jams, some would say it’s also an environmental important initiative to reduce traffic and local and global emissions. But if you really look at what having public transportation means for the society versus not having it, you look at whole dimensions of benefits, environmental and social.
FH: At Ruter, where I work, the value of sustainability is more clearly defined, and I think it’s interesting to both see and being steered after by the politicians. So one of those social aspects is, of course, how equal situations you have of the people in one region.
SS: So equal as in anti-polarizing?
FH: Yes, exactly. And I think many people outside think that we’re so equal in Norway, but actually, if you look at the social studies of Oslo, you have quite a big difference between East and West. So. by having public transportation that runs quite frequently by a sensible price, everyday life is more similar for everybody than maybe in other cities. You have people coming from the East side, who can work in the city, and go back, and it works. You get to your job in a cheap way. It makes the employment rate quite high, and also gets a sense of being more equal. Also, if you think of people outside of the city versus Oslo, we have a big effect to make that to work, you can actually travel across. Also the equality of living inside and outside the city.
SS: Just for the sake of our international listeners I want to add a few things to that. One is that Oslo is one of the most compact cities in the world. It’s a capital, it’s a very beautiful city, but what makes it so unique is this position between the blue, green, and the city in between. We have forests, lakes, and small mountains around Oslo, and then there’s the fjord at the heart of Oslo. The accessibility to nature is quite unique. I’ve traveled and lived quite a few places in the world, and one of the things I was thinking about is how much the public transportations of any city defines that city. I really think it’s the glue that keeps the city together. It doesn’t help if it’s only for the poorest, only for sports-interested, it has to be something that is a service to everybody in that society. It’s a meeting point, in a way, not just the means of meeting. Even the king uses the tram in Norway. I don’t know how many times, but I think it’s such an important equalizer, as you say. But then we’ll talk about the energy side of this whole thing. So, one thing is solving the big demographic challenges of the future. It could be polarization, it could be urbanization, all of this you work with. But then we also need to have it clean, we have to think about energy mixes, and I feel that we often are spending too much time debating if it should be hydrogen, bioethanol, etc., when all we need to do is test a lot and try the mix that works – how do you go about implementing all these important social changes quickly enough?
FH: Wow. Yes, that’s a challenge and an interesting part of sitting in a company like Ruter. because we have to develop quite fast. We have to make a report, find out what the right thing is, and then make the decision after the report is finished. Because things happen just by considering if it’s biogas or biodiesel, the changes in price in biodiesels and some changes of supply in bio gas makes that decision different after you finished working on it. So you have to have a dynamic approach, and make a decision when you need to make it, and understand all the things you need to understand to make that decision – what technology – if you’re going to make that decision. So, I think in our role we have to be dynamic and put out what our objectives are our environmental objectives, what the operational demands are, what financial aspects we need to consider, and the sustainability dimension of it. But the system has to be good at understanding the whole ecosystem of energy, and I think that’s the difficult part. I guess it’s the politicians' main responsibility, to understand the holistic aspect of things, to follow the changes, and to make the right decisions where it all connects. If it’s on the upstream or downstream of energy, if it’s us using electric equals versus bio, if it’s bioproduction – it’s going to be used for what? It’s very complex, and there are many big changes in that area. And somebody has to understand both the current situation and what we think might be scenarios for the future, and be able to agile…
SS: Provide the bridge?
FH: Provide the bridge in center-wide, wide regulations, and at least also provide the right facts about things. And that’s the most difficult piece because you can buy gas versus biodiesel versus electrification in many ways, and get difference response on what the right decision is.
SS: And to get exactly the answer you want. You have a phrase that I love, you said you care about total energy efficiency. And, of course, we don’t even know what exactly what solution, what equation, we’re solving for. But I think it’s by creating different equations and seeing how it works. One of the problems we have is the way we measure efficiency, and the way our owners are measuring us is based on the old technologies and old business models. We have to somehow push through both.
FH: Yes. Yes. And I think what we’re trying to push for is to use some national, and preferably international, standards. We, who are sitting in the entity that’s working on environment at Ruter, have our own perspective of what’s good and not good, but if we don’t follow what Norway is saying about the environmental soundness of the technology, and they don’t listen to the EU, we are going to have a serious issue. Because then you have all of those different perspectives, different practices on what’s good and bad, and it’s not going to be that holistic system aspect as we discuss. So, I think the first thing we should do is to make sure that we align ourselves as much as possible, both the companies with owners, with the boards, with the national, international, and with the EU. If there’s a difference, we have to understand why there’s a difference, and that we either agree on it or not. And one of the aspects is, of course, if we calculate biodiesel as biogas as zero emissions or not. That’s where Ruter differs from the owners. So we have a discussion with them on that, just to make sure that we have a reason for doing that, and if not we should stop.
SS: I was asking you what you think we do well in Norway. Ruter was, if I heard correctly, named one of the three innovative companies in public transportation in the world on a public transportation conference, and I think it has to do with your social nerve, the way you think about how this improves society in the right direction. But, you have also been very quick in rolling things out, and I think that is difficult leadership these days. But you say we have some advantages, and you play to them, one is being a super-user of self-servicing in digital services. You have to give us a couple of examples there, and then you say, well, we are really good at the spread and scale electric vehicle across private and public. Can you tell us more?
FH: Yes, if you take the last example, one of the logical reasons for that is because we have to reduce carbon emission somewhere – the biggest place in Norway is from transport because we don’t want to touch oil. And we have the incentive to do so because we have so many taxations of vehicles, so it’s easier for us to reduce them on the electric vehicles, than for other countries to be incentivized for those things. So I think that’s one of the logical reasons for it, but I think the interesting part was when I listened to a presentation at NAF, the Norwegian Automotive Union, they talked about the difference just between the Nordic countries. They said that in Norway, people were saying «cool, let’s try it», «can we just charge here», «let’s see how this works». They talked about how this people mentality «ah, this is something new less tested». Whereas in Denmark and Sweden people were like «OK, this is a new thing, let’s study it, let’s see what it means, let’s get some consequences before doing it». SO they talked about the Norwegian people being a bit more easygoing, eager to test this.
SS: Playful, maybe?
FH: Playful, maybe. So I think that’s very important in all the ecosystem.
SS: I tell you what, as a foreigner in Norway, my impression is that Norway has a super-strength in applying different technologies for different kinds of processes because we need to, because we live in quite extreme conditions. And I think it is quite cultural and historically comfortable to test technologies, to do things more efficiently because it’s required.
FH: Technology is the biggest advantage for us at Ruter because we think it’s important that we keep the interface between us and the customers, now being the Ruter App – that’s our steering-point. If we have an app which is telling you where to go, when to go, and pay for it, that will actually steer a lot of your behavior.
FH: Choices, exactly. So we need to remain relevant with that interface to you. When we started three years ago, when we worked quite fast with our Ruter Payment App, we scaled that to 50% quite fast. And then people say, you know, that’s great, you have a great app. But the thing is that 93% of our customers have smartphones, we have 4G everywhere and people are connected, and they test things. They download apps and they test things themselves. Digital curiosity and the scale of people being able to use it is just unique. If you go to the south of Europe, even though they have the best app in the world, they couldn’t have that outreach. Which means they have to work on other kinds of information flows, which is a lot more difficult to change. A bit more difficult to make people travel, to influence public transportation and how people mobilize.
SS: Frode, very cool. I would like to spend just a couple of minutes talking a little bit about World Wildlife Foundation as well. I’m thinking about endangered species, but WWF does more – tell us what WWF does, and why.
FH: WWF is really there to make sure that we live in harmony with nature, and if we handle the subjective, we’re the biggest NGO in the world, and we have said that to work on that case. We work both on climate change and on the environment. One of the reasons why we do that is that you can’t work on endangered species and the environment if you don’t handle climate change. So for us, climate change is really about, first of all, providing facts – we have an issue, we have to do something. Right now I think more people in the world and Norway realize that, and it’s also more to make things happen, to make progress, to make a change, to give advice to politicians how to work with the private sector and make politics. But the big battle is, right now, is on the environment and the endangered species. Because we know a lot about the climate change, but the history of endangered species, that we lose 2% of a number of species each year, we’ve already taken away 50% of endangered species, that’s critical. And to your point, we have to kind of tell that story, make people understand it. Animals are dying out. Also, if they’re dying out, you can feel sorry for the animals, but if the ecosystem. So if the animals disappear, us as people will also disappear.
SS: We die a little bit as well.
FH: Yes, not just a little bit. Because the ecosystem belongs, the food we eat is very connected to the species we have. So we’re trying to talk about that because climate change is something people understand now, something is starting to happen. The environmental issues and the species that are dying out, that story is not being told yet.
SS: The story of bees, for example?
FH: The story of bees and many more thousands of species that are really dying out. Coral reefs, a lot has died out and we’re going to lose most of it. That’s sad, but the sad thing is the consequence of not having coral reefs because that’s a consequence for the fishes, a consequence for the people who eat the fish, and a consequence fo the people who fish. So you have all those aspects, and I think it’s an untold story.
SS: So, quickly, I have to ask you an environmental question, and I might be politically incorrect here. I have friends who run some very exciting start-ups, who have big companies, tekkies. This synergy but also contrast having a technical solution to everything versus having an organic solution to everything. Now we have a problem with the heating of the planet, so one of the solutions proposals is spraying something, creating a layer of protective gas or particles, between us and the sun. The ozone problem and stuff like that, but that sounds like a band-aid to me. We are creating something that alleviates the symptoms rather than trying to solve the thing that caused the issue. Do you think we still have time to fix the real issues? And do you think it’s technological? Do you think it’s technology and politics? How do we go about this?
FH: I think there is time. I’m an optimist, but there are many reasons why not to be an optimist if you look at the actual situation on the earth currently.
SS: We’re in a hurry.
FH: We’re in a hurry. And I think we will fail if technology and politics don’t deliver. I am totally sure. If politics do not put emphasis behind the COP Paris Agreement, to reach an additional 1.5 degrees, technology will not come fast enough. And if not technology development will happen as we’ve done up to now, and a lot more, we’ll not see the solutions both in mitigating the solutions we have and also finding new solutions. Because the problem is huge, and many people say that there is a lot of good stuff happening – look at the price of batteries and income of electric vehicles, which by the way is 2.5% in the world, So we’re not that far. If you look at coal, which is not reducing, the energy usage is really, really big. The need is big. We have solved the issue of reducing neither coal nor oil. So there have to be a very strong combination, and if the politicians are taking brave decisions, I think the tekkies and the businesses have a lot more to provide in terms of technology innovation investment. If you look at the production of electric vehicles the last five years, although not on the market, that’s huge. If you look at what’s happened after Rex started with solar powers, it’s huge. So there’s a lot of fantastic things which I think are just beginning, and we need to accelerate that, it’s gonna be beneficial for the environment, for social, and for economics.
SS: Amen to that. So, to technology optimism with a great sense of urgency. Thank you for listening. Frode Hvattum, I was trying to pronounce it in the right English way, but… Frodo, from Ruter, thank
FH: Frodo is the only way.
SS: Frodo from Ruter. Thank you so much for coming here and teaching us about energy and the environment. Thank you for listening.
What are you doing at work?
Leveraging public procurement to accelerate electrification and searching for a way to steer public transportation on the societal value we create. Also, building a bridge between political visions and commercial investment in mobility and leveraging digital innovation to drive sustainable value.
What are the most important concepts in energy technology?
Electrification and the transition to a system change, and total energy efficiency through driving toward circular business models in mobility.
Why is it exciting?
Because the commercial business case is huge. The improvements we can do for the users of mobility is great and will be an important impact on reducing climate change and create a better world for the future.
What do you think are the most interesting controversies?
If we can deliver on sustainability and economic growth at the same time, if we can we transform ourselves to leverage the full potential of the circular economy, and if we find a way to understand the holistic consequence of our choices and make better decisions.
Your own favourite projects in energy technology?
Sustainability driven customer centric mobility platform. It reduced total energy use by reducing the number of produced vehicles and increasing the use of each vehicles while increasing the user experience.
Your other favourite examples of energy technology internationally and nationally?
Otovo’s way of scale usage of solar panels on roofs of private households.
How do you usually explain energy technology?
For me as an economist, its digital or physical technology that helps produce, distribute and use energy to serve a purpose for an individual, an organisation or the society as a whole.
What do we do particularly well in Norway of this?
We are superusers of self-servicing digital services, big on hydropower and electric vehicles, and we are strong on circular economies in certain areas like waste.
A favourite energy technology quote?
If technology is the answer, what is the question?
Most important takeaway from our conversation?
Circular economy is the new big challenge and opportunity, the potential is huge, but we must think differently and collaborate more and smarter.
Minds and Machines with Andrew McAfeehttp://www.energy-transitions.org/ http://www.energy-transitions.org/</br >
Circular economyMobility of the futureSustainability and the environmentWorld Wide Fund for Nature (WWF)