Where Are We Heading? | Energy Central

The global transition towards renewable is heading towards altogether a new phase.  The energy sector currently faces challenges of Ukraine war, rising coal output and increasing energy prices.  It is interesting to see how the industry copes with them in the next two to three decades.  However, decarbonized energy system, energy sustainability, affordability and security pulling in the same direction challenge the public and private sectors to resolve the threefold problem with a new approach towards implementation.  A lot of research is underway to test the confidence, sentiment and priorities for the energy sector across the world that demand participation across value chain, oil to gas producers and renewable generators.

The trilemma lead to competing priorities with just about 39% being optimistic in reaching the organizational decarbonisation targets and another 29% being pessimistic about this goal.

ENERGY SECTOR PRIORITIES:

The accelerated energy transition has left markets striving to maintain transmission and distribution systems, supply chains, permission and licensing, financing, infrastructure and the workforce.  Several barriers could slow down this energy transition though momentum is building up.  When we look at the optimism level, oil and gas industry shows improved sentiment (60% against 58% in 2022) compared to electric power (72% against 87%) and renewable (84% against 87%).  Renewable is expanding at speed despite power grid capacity, energy price volatility, inflation, supply chain failures, regulatory red tape and delays in supporting infrastructure projects.

While the energy industry has strong expectations to increased investment in clean energy, carriers and enablers, the organizations seem to invest in low-carbon hydrogen/ammonia (52%) in the year ahead.  Similar proportions are seen in wind (49%) and solar (46%).  Some even aim at increased investment in carbon capture and storage which may scape up in the next five years.

CHANGE BY 2030:

The phenomenal rise of clean energy technologies (solar, wind, electric cars) is reshaping how we power from factories to vehicles. This major shift underway is set to result in considerably a different ‘global energy system’ by the end of this decade. Tenfold increase in electric cars, renewable touching almost 50% , heat pumps and other electric heating systems and more importantly, three times investment in them indicate a greater role of clean technologies in the days ahead.

These changes stem from current policy settings around the world and if the countries deliver on their national energy and climate pledges on time, clean energy progress could move faster.  But, even stronger measures may be warranted to keep alive the commitment towards limiting global warming to 1.5%.  The rapid developments around the globe need to hasten clean energy to achieve benefits that they offer in terms of new industrial opportunities and jobs, energy security, cleaner air, energy access and a safer climate for everyone.

Every country needs to route its own way though international cooperation is crucial to accelerate clean energy transition.  The speed at which emissions decline depends solely on our ability to finance sustainable solutions.  It is time that we redouble collaboration and cooperation and not retreat.

Renewables set to contribute 80% of new power generation by 2030 under current policy, solar alone accounts for more than half this expansion.  While the world is set to a manufacturing capacity of 1200 GW of solar, it is projected to actually deploy 500 GW only in 2030.  Reaching another 800 GW of new solar capacity would lead to a further 20% reduction in coal-fired power generation.

The five key pillars – tripling global renewable capacity; doubling energy efficiency improvements; curtailing methane emissions from fossil fuel operation; large scale financing to triple clean energy investments and measures to ensure orderly decline in fossil fuel usage could be key for the projections made at international events on climate change.

However, demand for fossil fuels is likely to remain far too high to keep within reach of Paris Agreement to limit the rise of global temperature to 1.50C.  Curtailing the emissions curve into a path consistent with 1.50C looks possible but pretty difficult.  Despite encouraging progress, the costs of inaction would place global emission high enough to push global average temperatures by around 2.40C this century.

INDIA – 2070

Collaborative action seems fundamental in the net zero target of India in addition to significant progress in renewable energy coupled with coal resilience and infrastructure gaps.  Developing countries like India have a major role to share on worldwide goals on climate change.  Long term objectives are achievable through intermediate milestones and proactive actions.   Focusing on short-term goals takes India not only to meet its reductions targets but more importantly paves way for sustainable economic progress.  Development and conservation are the key words any country needs to work on to move towards the set target.

A few initiatives undertaken starting with Panchamrit Action Plan to reduce emissions through subsidies, frameworks and mandates across several sectors could trigger the right action. There are a few actions starting with prioritizing domestic production of photovoltaic modules under PLI scheme followed by resilient transmission infrastructure for renewable under Green Energy Corridor Initiative; heavy subsidies to solarize irrigation pumps under PM-KUSUM scheme; pumped storage and small Hydro projects to address grid stability to address intermittent renewable output.

Though Hydrogen mission is in nascent stages, India aspires to become global hub for producing, using and exporting green hydrogen. Carbon credit market has been made more inclusive to allow non-obligated companies to volunteer participation in reducing carbon footprint.  In order to make EVs financially viable, it has introduced battery swapping policy and PLI scheme for advanced chemistry cell.  Ministry of Environment plans to build thousand ‘Nagar Vans’ (urban forests) to account as carbon sinks.

Despite these encouraging progresses, there are gaps and challenges – one of them being reliance on coal and other fossil fuels.  Energy sector contributing to 40% of emissions has 65% contribution from fossil-fuel.  A few states however have progressed with renewable energy with solar, wind and tidal.  The second critical is, slow infrastructure development for electric vehicles – charging network development (2000 public EV charging stations) and high fixed and maintenance costs slow large-scale adoption.

Agriculture emissions and sectors like cement, steel and chemicals are large emitters of GHG.  Serious de-carbonization with high costs and technology limitations become challenging.  The Faster Adoption and Manufacturing of Electric Vehicles (FAME) has forced several challenges as also carbon capture, utilization and Storage (CCUS) which are slower than planned with cement and steel sectors in the pilot phase.

NET ZERO

Sustainable growth in order to achieve net zero is estimated to need $10.1 trillion by 2070.  India is projected to emit 160 Gt of carbon between 2020 and 2070 but, an extra $5 trillion would result in 50% reduction to 80Gt.  Robust policies supporting the pillars could minimize climate change impacts and move towards net zero more rapidly.

According to one of the reports, enhanced focus on 7 key levels – renewable (-10%); material circularity (-8%); carbon storage recovery (-7%); Natural climate solutions and sustainable farming (-10%); Scale up Green H2 (-4%); EV penetration (-2%) and others (-8%) seem to bear the potential to reduce the current 160 Gt of C)2 to 50% CO2 under accelerated scenario with an additional investment of up to $5 Trillion.

In view of renewable transforming into net zero targets, it is advisable to allocate dedicated funds towards center of excellence that would accelerate breakthroughs in renewable and EVs, hydrogen technologies and carbon capture.  Eco-labeling mandate on products and services would raise awareness and create consumer side pressure to fast track green transition.  In the light of loss of jobs in energy intensive (coal) it is imperative to design up skilling programs to ensure transition and meet the demands of green energy.

Along with the above measures, localized and targeted campaigns on climate literacy in the educative curricula at different levels will facilitate greater and precautionary awareness and accountability in this journey towards net zero in India.

COMPLACENCY:

All said and done, journey towards net zero hides both promising initiatives and significant challenges.  Every country has taken shelter in renewable and promotion of EVs despite heavy reliance on coal and inadequate infrastructure.  Collaborative efforts across all sectors are indeed pretty essential towards focus on net zero. 

The three important pillars that support the journey towards net zero include: Implementation of robust policies; investment in sustainable practices; raising awareness on green actions play crucial role.  The challenge of sound economic growth and environmental responsibility decides the objective towards net zero.

However, given the current global uncertainties it is difficult to comprehend the 2030 situation as many of the policy makers may not be present to witness the reality.  Imagine the kind of changes that would take place by 2070 when the entire generation will be new. The challenges that India is facing currently, need not be the same in any other part of the world.  Each country will have a different story to narrate in their journey towards this mandate.