What factors could influence the pace of the energy transition?
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The energy transition is well underway. But huge challenges still stand in the way of decarbonisation. Influenced by a range of factors, from political will to the development of emerging technologies, the global energy mix is not changing nearly as quickly as the world needs it to.
Our Energy Transition Outlook for 2019 models two potential scenarios for the next twenty years. Both scenarios fall outside the 2°C or lower global warming trajectory agreed to at the 2015 Paris climate change conference.
What will it take to achieve a 2-degree trajectory?
The key challenge is one of scale. While some of the technologies required for a pathway to a 2-degree future are economic, proven and scaleable, many others are not. Significant additional investment and political will are needed if these technologies are to become commercial propositions.
Watch as David Brown, Head of Markets and Transitions for the Americas, explains why scalability is the key challenge facing the energy transition.
What political factors are impacting the energy transition?
Since Paris, the global backdrop has become more polarised. And the US-China trade war has put an abrupt pause on collaboration between two of the world’s biggest economies.
Policies being promoted in the EU and smaller economies are helpful. But larger, energy-dense countries and energy-rich segments have not made any serious progress.
David discusses the role of China and the US as key influencers in the energy transition.
What would it take to meet the world’s power needs purely with renewable sources?
Although renewables are becoming more competitive, there are practical limitations to reaching a fuel mix made up of 50% or greater share for solar and wind. The first limitation is storage.
Right now, the global energy storage market is relatively small – 4GW in 2019, less than 0.5% of solar and wind installed power capacity.
The second limitation is value creation: so far, returns offered by renewables don’t compare favourably to the best oil and gas developments.
David explains why longer duration and cheaper storage hold the key to creating value in the power sector.