The energy transition is a pathway toward transformation of the global energy sector from fossil-based to zero-carbon by the second one half of this century. At its heart is the need to reduce energy-related CO2 emissions to limit climate change. Decarbonisation of the energy sector requires urgent action on a global scale, and while a global energy transition is underway, further action is needed to reduce carbon emissions and mitigate the results of climate change. Renewable power and energy efficiency measures can potentially achieve 90% of the required carbon reductions.
The power transition is going to be enabled by i . t, smart technology, policy frameworks and market instruments. IRENA has assessed decarbonisation pathways through REmap, and it is equipped to back up and accelerate the power transition by providing the essential knowledge, tools and support to Member countries because they increase the share of renewable energy in their power sectors.
The Energy Transition Netherlands has many dimensions. The ubiquity of energy in modern industry and society will ensure that the impacts are felt over the global economy. Policymakers have an opportunity to pursue pathways that effectively channel the transition to provide a future energy system that is secure, sustainable, affordable and inclusive. A strong enabling framework and multi-stakeholder collaboration are key for the effective energy transition.
There are some universal drivers for energy transition, which make it a concern for all countries to actively investigate their priorities:
Demand and provide shifts: Global energy consumption is predicted to increase by 30 percent from 2017 to 2040. This growth is driven primarily by non-OECD countries, since they move even closer to universal use of energy and consume more energy to back up economic and industrial growth, so that as developed countries decouple energy consumption and GDP. Additionally, the future demand also is going to be met with a more diversified primary energy fuel portfolio, driven through the gradual replacing of coal in power generation by alternative energy sources and natural gas, by reduced interest in liquid hydrocarbons because of electrification of transport, and by increased prioritization of national energy security and import independence.
Innovation: Innovation has been a constant companion from the energy system, ushering previous transitions from biomass to coal, and subsequently from coal to liquid hydrocarbons. While previous transitions were gradual processes, the energy industry is looking towards a dynamic future. Recent trends in technical maturity and price reductions in solar photovoltaics, onshore and offshore wind, battery storage and unconventional fuel extraction fundamentally have altered the global energy balance. Moreover, technologies such as smart grids, demand response and blockchain will open new frontiers for future years energy system by changing the relationship between consumers and suppliers.
These new energy market participants demand new set of skills, highlighting the necessity for human capital development.
Environmental concerns: The energy system contributes two-thirds of global greenhouse gas emissions. The requirement to act has materialized in landmark international cooperation (as with the Paris agreement) and national renewable power targets in countries including India and China. Private sector organizations have stepped up their responses: the Norwegian sovereign wealth fund announced divestment from coal-based assets, while oil and gas majors have raised stakes in renewable energy and Swiss Re is implementing ESG benchmarks across its entire $130 billion investment portfolio.
However, progress on environmental sustainability is slow, because the carbon intensity of the global energy system remains flat, while air pollution has worsened in lots of countries and 2-thirds in the world’s energy consumption is not subjected to efficiency interventions. Going forward, as countries work to satisfy increased demand, environmental concerns will intensify vaaelo implications for energy system reliability and fuel diversity planning.
Driven by these trends, the vitality transition is well underway, there are significant opportunities for countries to boost the performance with their energy systems.
Policy decisions made today will determine whether the energy system of the future is capable of delivering across its three key imperatives: economic development and growth; energy security and universal access; and environmental sustainability. The challenges in the current system are largely as a result of path dependencies from historical over-(or under-)prioritization of one of those three key imperatives. Consumption patterns and sunk investments represent significant socioeconomic lock-in, leading to the device inertia.