SOLAR AND CLEAN FUELS SECURING SUSTAINABLE ENERGY
on track for a 2.7-times increase in global renewable energy capacity, by adding 5,500GW. While this is still short of the tripling goal, the agency says that this estimate could easily be revised upwards with more ambitious planning. Like ending deforestation, the environmental imperative for the global clean energy transition is clear. Moreover, the economic case is being made more strongly every month, with every new installation and with every new per-unit price drop. Wind and solar PV are already the cheapest options to add new electricity generation in almost every country, making them the go-to choice in practically every scenario. Success reinforces success, and nowhere is this truer than with renewables. China and India, the emerging economic superpowers, are leading the charge and both have plenty to gain by securing global leadership in this new energy frontier. The former will account for 60% of all capacity installed worldwide between now and 2030, while the latter is growing its
renewable capacity at the fastest rate across all major economies. Phasing Out Fossil Fuels As renewables scale up, coal, oil and gas must wind down. The age of hydrocarbon dependency for energy production will reduce, but to meet the necessary 2030 and 2050 deadlines, more needs to be done globally. Accordingly, the likelihood of this integral part of the global energy production being entirely phased out within the next five years is in question. The International Energy Agency believes that a more viable target, one that could be vital in keeping the 1.5°C target alive, is that this proportion halves from 60% to 30% by 2030, with renewables scaling up sufficiently to cover the gap. Achieving a Net-Zero Energy Industry by 2050 As mentioned previously, any prediction made about the state of an entire global industry 25 years into the future can only ever hope to deal in generalities. However, there remains
plenty to be hopeful about, even if there are substantial challenges to overcome. Greater ambition is needed, combined with faster and firmer action. Whether or not this occurs will depend greatly on three major factors: attracting more investment capital, oil and gas companies’ participation, and unlocking the potential of green hydrogen. Capital remains key. Global investments across all energy transition technologies reached a record high of $1.3 trillion in 2022. Politics can play a central role in galvanising greater investment in the energy transition, with tax breaks and regulatory frameworks designed to better clarify the rules on previously unclear markets such as carbon credits. Similarly, greater public funding of energy transition technologies and projects would help to build private investors’ confidence in this area, allowing them to “follow the money”, and give stronger signals that public policy is to back the transition. Similarly, O&G companies are already a critical piece of the puzzle. A recent McKinsey report outlines how they are perfectly poised to play a meaningful role in the energy systems transformation. They have the expertise, the resources, the risk appetite and the increasing pressure of regulators and customers to consider, as they look to decarbonise their own operations while investing directly into greener energy production methods. As for green hydrogen, this nascent industry is still so relatively new that it is difficult to accurately map its current demand potential, let alone its growth trajectory for the next two and a half decades. However, observers across the energy industry and beyond agree that it is likely to play a pivotal role, given the speed of technological innovation boosting its efficiency and ubiquity levels. IRENA’s latest data suggests that if the energy industry can achieve net zero by 2050, 94% of hydrogen will be renewables-based. If this occurs, it will mean the relatively rapid development of a vastly impactive new industry based on clean energy production, storage and transport that is connected to global markets with sufficient logistical efficiency. In other words, a game-changing prospect for a clean energy future.
“ Developing world-changing ideas and technological concepts isn’t enough; they must be evaluated, recognised, supported, implemented and upscaled.
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THE FUTURE OF ENERGY
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