Decarbonisation dilemma: Energy transition complexities
International leaders have set out their goals to become carbon neutral by 2050. Moves to meet net zero emission targets have been widely shared, most recently at the COP26 summit in Glasgow. However, there’s been little academic research into the complexities that come with the transition of energy.
Capital.com has spoken to experts in the field to further understand the challenges, the key factors affecting greenhouse gas (GHG) emissions and possible solutions to the global warming crisis.
Why is energy transition and decarbonisation important?
Decarbonisation, essentially reducing carbon dioxide (CO2) and other greenhouse gas emissions in the atmosphere, is key to keeping global warming within acceptable levels.
C02 absorbs and radiates heat, releasing it gradually. Without this carbon cycle, the Earth’s average annual temperature would be below freezing. However, increases in greenhouse gases have tipped the Earth's energy out of balance, trapping additional heat and causing global temperatures to rise.
Antonia Gawel, Head of Climate Action at the World Economic Forum, explained to Capital.com why decarbonisation is so important.
Energy transition outlook: How off track are we globally?
Gawel highlighted to Capital.com the findings in a report co-authored by the World Economic Forum, UNEP, ELD and Vivid Economics. It said that if the world is to combat climate change, biodiversity and land degradation targets, it needs to close a $4.1tn financing gap in nature by 2050.
Energy transition: Why is it urgent?
The latest report by the Intergovernmental Panel on Climate Change (IPCC) paints a stark picture of climate change accelerating faster than expected, triggering a range of irreversible tipping points, unless drastic action is taken urgently, Gawel further explained to Capital.com.
What are the key factors affecting greenhouse gas emissions (GHG)?
Human activity is increasing the concentration of some greenhouse gases in the atmosphere, including C02, methane, nitrous oxide and fluorinated gases.
Burning coal, oil and gas increases emissions. Deforestation removes the trees that regulate the climate by absorbing CO2.
Livestock farming raises emissions because cows and sheep produce large amounts of methane when they digest food.
The use of fertilisers within the agricultural sector is also a contributing factor, as they contain nitrogen and emit nitrous oxide. Fluorinated gases, which are emitted from equipment and products that use these gases, also contribute to warming.
These products have been used in industry and by consumers for decades.
Decarbonising energy supply: Where is the dilemma?
Fernando C. Hernandez, a commercial and technology specialist in energy, Principal at Hernandez Analytic and a business ambassador for Scotland in America’s energy sector, explained to Capital.com his thoughts on why there’s a decarbonisation dilemma.
New power sources to reduce emissions: Join commitments
In 2015, the EU and close to 200 countries signed up to the Paris Agreement.
The agreement commits the nations to "pursue efforts" to limit global temperature rises to 1.5C, and to keep them "well below" 2.0C above pre-industrial times
The treaty also aims to strengthen countries’ ability to deal with the impacts of climate change and support them in their efforts.
In addition to the Paris Agreement, the Plan of Action for Energy Cooperation (APAEC) 2016–2025, drawn up by the Association of Southeast Asian Nations (ASEAN), is another example of countries working together. According to a UN report, the region has set a target of 23% of renewables in the energy mix by 2025.
The UN has highlighted how the energy transition requires input from all countries and communities, but noted how they don’t all have the same abilities, technologies, policies, finance and resources to increase efforts.
Examples of energy transition: Decarbonisation projects
In a further bid to mobilise the energy transition, the UN Secretary-General, António Guterres, called for countries to cancel all planned coal projects. He also appealed for an end to international financing of coal power generation, and urged greater support for developing countries to ensure a just transition to renewable energy.
So, what are the main types of renewable energy sources to help meet net zero emissions? Solar energy, wind energy, hydropower, geothermal energy and biomass energy are some of the most common sources, according to the US Energy Information Administration (EIA).
According to McKensey, Europe has created a hub for renewable energy. Denmark became a home of wind energy with Vestas, the world’s largest wind-turbine manufacturer. Solar energy took off following Germany’s Renewable Energy Sources Act in 2000.
Renewables are also central to the strategy of Europe’s largest energy companies, including Denmark’s Ørsted, Germany’s RWE, Norway’s Equinor, Portugal’s EDP Energias de Portugal, Spain’s Iberdrola and Sweden’s Vattenfall.
Notable installations globally include the Alta Wind Energy Center in the US, which is the second-largest onshore wind energy project in the world, and the Walney Extension in the UK, which is the world’s largest offshore wind farm.
Hydro-electric power examples include the Sihwa Lake Tidal Power Station in South Korea, which is the world's largest tidal power installation, the Rance Tidal Power Station in France and Hydro-Quebec in Canada.
China also has one of the world’s biggest hydro-electric power hubs. However, this source produces only a third of the energy it gets from coal.
Consultancy firm McKinsey said a major limitation of such renewable energy reliance is its intermittency, as wind and sunshine are not under producers’ control, leading to an inevitable variability in its generation.
What are the main challenges of energy transition?
One of the challenges to decarbonising energy, as highlighted by Gawel, is that more financial support is needed to support future energy sources and technologies.
“The rising cost of raw material and equipment required to generate renewable energy (solar and wind panels) are yet another factor resulting in reluctance towards energy transition, due to the absence of economies of scale.”
Another challenge is keeping up with the pace of demand in order to power homes, businesses and communities. Innovation and the expansion of renewable power sources are key to maintaining a sustainable future.
However, as we have recently seen, supply and demand is not in balance.
Europe is navigating a record-breaking surge in energy prices that threatens to derail the post-pandemic economic recovery.
Hernandez said that the crunch has seen nations contend with the realities of the energy transition.
The European Union is gradually cutting its dependency on fossil fuels. Renewables become the bloc's main source of electricity for the first time in 2020.
Challenges with industrial decarbonisation
When it comes to industrial decarbonisation, as recently witnessed in the UK, the number of electric vehicle (EV) charging points does not meet demand for the number of electric vehicles being produced.
The UK’s Society of Motor Manufacturers and Traders (SMMT), which represents more than 800 UK automotive companies, told Capital.com that the number of battery electric and plug-in hybrid vehicles potentially sharing a standard public charge point rose from 11 to 16 vehicles per charger between 2019 and 2020.
Moreover, It said only one new charger is currently being installed for every 52 new electric vehicles registered, with cars that can be plugged-in now accounting for one in every six new car registrations.
As a result, the body has called for improved targets to ensure that the infrastructure meets demand.
Vehicle manufacturers are just one example of a sector that has had to prioritise climate-friendly alternatives over its traditional offerings to remain sustainable.
For more insight on the general challenges, Osama Rizvi, an energy analyst at Primary Vision, explained to Capital.com how he sees it.
What is the solution?
“I believe, moving forward, and before talking about the solutions...we need to reframe the issue and make it more holistic. The solutions will not work if the problem isn't understood well,” Rizvi said.
Meanwhile, the World Economic Forum has been taking relentless action towards building public-private collaboration to tackle the climate crisis, Gawel explained.
Hernandez also shared his thoughts to Capital.com on the solutions.
“The energy basket is a tool and solution to sustain a nation’s energy, as it accepts different forms of energy inputs and is non-binary, foregoing an us-versus-them philosophy in terms of pinning renewables against fossil fuels. Notably, the basket’s composition is to be determined by the demands and fluidity of the grid, as opposed to high-minded rhetoric.
“The energy basket’s deployment has been realised by France, which has utilised a matrix of energies in modern times: phytomass (wood); nuclear; and natural gas, as noted by Vaclav Smil.