The energy crisis has potential to speed up the energy transition but threats to net zero 2050 target remain.
The current energy crisis is likely to continue for the foreseeable future. The effects of higher gas and electricity prices have been felt acutely across much of the world. This has created immediate challenges for governments, who are making interventions to protect consumers from high prices. But it should also encourage to rethink the fundamental design of energy markets as governments seek to transition to net zero according to GridBeyond’s latest research: Global Energy Trends 2023: Crisis, Contingencies and Climate change.
This year, GridBeyond’s flagship report looks at the vulnerabilities and strengths of the energy sector and identifies renewables and technologies like energy storage, battery and EVs as essential for a more resilient and flexible grid and a stronger energy market less dependent on fossil fuels.
Over the last 12 months, the high and volatile energy prices seen across the globe have meant that security of supply and affordability of energy have become more relevant, while less attention has been put on sustainability. While this implies a detour on the path to net zero, the emphasis being placed on the security of energy supplies confirms an under-appreciated benefit of the energy transition—that greater energy security and independence can result from a reduced reliance on imported fossil fuels.
Renewables play a key role in clean energy transitions although costs for new solar PV and wind installations have increased, reversing a decade-long cost reduction trend, natural gas, oil and coal prices have risen much faster, further improving the competitiveness of renewable electricity. But renewable electricity needs to expand faster to reach net zero by 2050, supported by an increase in the technologies that provide flexibility to the grid.
Michael Phelan, CEO, GridBeyond commented:
“Events in Ukraine highlight the continuing importance of energy security, but this immediate challenge sits alongside the need for the world to achieve a deep and rapid decarbonisation. But energy market volatility and security constraints present an opportunity to supercharge the energy transition by ramping up clean energy investments and reshaping industrial and end consumer consumption.
“Times of crisis put the spotlight on governments and alongside immediate actions to reduce reliance on Russia imports many governments are now taking longer-term steps to increase or diversify oil and gas supply; many looking to accelerate structural changes in energy markets. This means we could be on the brink of a historic turning point towards a cleaner and more secure energy future. But it is important to remember that time is ticking and this decade is our chance to stand up and play our part in creating a net-zero future that ensures supplies are available at a price that is affordable for all consumers. While there’s still much uncertainty around how we will achieve this, we know it is going to take collaboration from leaders across all countries, sectors and societies.”
A copy of the White Paper Global Energy Trends 2023 – Crisis, Contingencies and Climate change can be downloaded here.