Image credits: Congreso Anual Conjunto de Asociaciones del Sector Energético
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News Article

Problems of the Energy Transition Need Integral Solutions

By Karin Dilge | Wed, 10/05/2022 - 17:19

Recently, talks about reducing carbon emissions for the most polluting industries globally have taken the spotlight as damage caused to the environment via unsustainable production became increasingly apparent. Government leaders and companies are now trying to reduce their emissions to reach the goal of 1.5°C by 2030. Meeting at the Annual Joint Congress of Energy Sector Associations, industry experts gathered to discuss these challenges. 

Dr. Ute Collier, Deputy Director, the Knowledge, Policy and Finance Centre of the International Renewable Energy Agency (IRENA), discussed how the intergovernmental agency with its 168 members carries out a global assessment to find out where it needs to be operating and support the global energy transition goals. 

“To reach the goal to significantly reduce emissions by 2050, much remains to be done regarding energy efficiency,” said Collier. Although people are much more concerned about and aware of climate change and the urgency to build more efficient production processes, there a small percentage of fossil fuels will still be in use by 2050. and the overall energy transition will be a slow one. 

According to Collier, hydrogen will play a key role in the transition. However, green hydrogen barely exists in the market as of today. Nevertheless, renewable energy sources have grown in capacity continuously and outpaced non-renewable sources of energy from 2019 onward. Today, 27 percent of electricity globally is produced with renewable resources, added Collier. 

Nonetheless, “2030 is absolutely critical on the way to 2050 targets,” she said. Therefore, the world needs to see a rampant acceleration of renewable energy development. To enable this, investment should increase massively as well. Industries where electrification is possible need to start their transition as soon as possible.  

Furthermore, Collier talked about the necessity to switch from inefficient to efficient biomass and biofuels and the need to do so sustainably. “The problem is that in Mexico, biomass is still rather inefficient.” Moreover, she highlighted that hydrogen demands focus on two priority areas: extra capacity of renewable power needed for green hydrogen production and the use of electricity directly in a low-carbon manner. According to Collier, refineries are one of the areas where governments should prioritize hydrogen use. 

The cost of producing and consuming renewable energy has been hotly debated, but in the past years, the world has seen the cost of solar and wind energy reduced significantly, mostly thanks to subsidies, said Collier. This price factor is also important to increase access to renewable power sources. “An energy transition needs to be just and inclusive,” she said. Globally, this represents a challenge, as 2.4 billion people do not have access to sufficient power to cook their meals. The global industry should therefore establish ways to carry the transition forward in a more just way. 

“To achieve decarbonization, we have to completely change the way in which we generate, transport and consume energy,” said Carlo Brancucci, Co-Founder and CEO, Encoord. To decrease carbon emissions, cooperation is essential because energy demand is still increasing: by 2024, it will have increased by 13 percent. 

Moreover, he detailed the main challenges he sees to reach the goal of seeing 35 percent of the energy produced with renewable energy sources by 2024. “Renewables have different characteristics than other sources of energy, suffering from issues like variability and uncertainty,” he said. Brancucci explained that renewable resources vary geographically and seasonally, which means that they cannot be used to produce electricity everywhere and all the time. Moreover, how much power is produced can vary frequently. 

Furthermore, energy consumption is evolving, as modern consumers are increasingly active in installing solar panels on their roofs and being able to observe their energy consumption more closely.

Brancucci highlighted the need to change the way the current system operates, focusing instead on flexible power plants as transmission will play a key role in reducing the price of energy. What is more, the value and impact of investments will depend on how the system will operate. Therefore,  “integral and coordinated planning is necessary to make fast and efficient decisions,” he added. In that sense, the collaboration between private and public sectors will be imperative to create optimal conditions for the energy transition.

Karin Dilge Karin Dilge Journalist and Industry Analyst