Growth will come from clean energy investment and carbon reduction technologies
Written by ABC Audio ALL RIGHTS RESERVED on August 21, 2022
Electricity production from renewable sources is accelerating faster than ever worldwide, confirming the transition to a new economy in energy production. Despite rising costs for the materials used to build solar panels and wind turbines, new renewable energy capacity additions are projected to increase significantly worldwide in the coming decades.
In the rapid energy transition, an important role will be played by the goal of the energy autonomy of the countries since the risk of increasing fossil fuel prices in the long term exists. Energy autonomy and high prices of fossil fuels such as oil and gas are the two parameters that make renewable energy sources even more competitive.
But even if the transition to renewables is rapid, the world is still a long way from being fossil fuel-free on the global path to net zero emissions by 2050.
The challenges are many. Governments are expected to further accelerate the development of renewables by addressing obstacles such as licensing and grid integration challenges, social acceptance issues and insufficient tariffs. The biggest challenge, however, concerns how to disconnect from fossil fuels to the extent that, at the same time, a sufficiently strong alternative solution for clean energy production will be created.
Oil and natural gas will remain an important part of the energy mix for decades to come
The recent war in Ukraine proved that unless a strong enough alternative energy production solution is created, then economic progress and the management of the climate crisis are at risk, while it will be questioned whether a just transition, equal for all, can be ensured.
What will be needed is an inclusive approach that draws on the experience of all sectors of society, science and business, where no one is excluded from the transition to clean energy production.
The Russia-Ukraine conflict has forced countries to reassess their strategic energy needs. But, policies aimed at de-reliance on fossil fuels without adequate, sustainable alternatives are simply disastrous, as they will lead to the erosion of economic growth while at the same time leaving less revenue available for investments in the energy transition, thus undermining environmental sustainability.
As the world expands in activity and the population grows, global energy needs will increase, so maintaining global energy security will require oil and gas to remain an important part of the energy mix for decades to come.
All will be focused on technology that reduces carbon emissions
Given that fossil fuels will remain for many more decades, what is expected is that significant investments will be made in the area of ensuring a lower carbon intensity in production and consumption units that use fossil fuels. This will require fiscal policies through tax incentives, financing and significantly greater investment in cutting-edge technologies that will reduce gas emissions from the use of fossil fuels.
In other words, the energy transition will involve continuing to meet global needs with fossil fuels, which will require investment in new innovative clean energy systems, including blockchain technology.
With regard to investments in clean energy, large investments are expected in nuclear energy, wind and solar energy, and hydrogen with the aim of achieving net zero emissions.
By 2050, the energy transition to clean energy is estimated to require hundreds of trillions of dollars in investment to reach the goal of net zero emissions. This means that there will be a huge increase in investments in the sector of clean energy, which will involve all the countries of the planet and a large number of companies that will be involved in achieving the goal of environmental sustainability. As oil and natural gas will continue to exist for many more decades in our lives and in our production activity, a lot of innovative technologies will be required since everyone will focus on technology that reduces carbon emissions, as this will be the main and primary goal for all people and entities in the world.
However, the right balance between renewable energy sources and fossil fuels will need to be found, as this will be one of the most critical factors that will determine global development and a sustainable future for humanity.
