Is the energy transition in stall mode?

With record emissions, renewable energy projects challenged by rising costs and inflation and the use of fossil fuels set to rise, it appears as if the energy transition has stalled.

This is one of the sentiments expressed in DNV’s latest report, the Energy Transition Outlook 2023.

The findings of the report show that, rather than completely replacing fossil fuels, renewables are merely meeting increased energy demand.

Between 2017-2022 renewables met 51% of new energy demand, whilst the remaining demand was supplied by fossil fuels, with fossil fuel supply continuing to grow.

The report also paints a bleak picture with regards to meeting 1.5°C targets, stating “CO2 emissions will be only 4% lower than today in 2030 and 46% lower by midcentury. Energy related CO2 emissions are still hitting record highs and are only likely to peak in 2024…”

In a DNV release, Remi Eriksen, group president and CEO of DNV stated: “Globally, the energy transition has not started, if, by transition, we mean that clean energy replaces fossil energy in absolute terms,” adding that the energy transition has been taking place more at a sector and community level.

However, Eriksen also added that many of the setbacks are short term and ultimately the global energy system will see a sginificant shift in the energy in the space of a single generation.

Have you read?
Iberdrola and Enlit unveil ‘milestone’ energy transition alliance
How cross-sector collaboration can help the energy transition in France

Report highlights

Geopolitical events have brought energy security into sharp focus, with nations prioritising domestically produced power. The trend is favoring nuclear, renewbles and in some cases coal.

The report states that “in the long term, energy security and sustainability will pull in the same direction, with decarbonising energy mixes…increasingly shielding national energy systems from the volatility of the international energy trade.”

Bold policy packages have sped up net zero progress, with the report highlighting the US Inflation Reduction Act and Europe’s EU Green Deal, REPowerEU, and Fit for 55 packages making big impacts.

The global race to the top will spur further policy advances, as well as drive clean technology R&D and skills development. However, the report also emphasises that in emerging economies, de-risked financing will be needed to maximise the benefits.

By 2040, global solar installations are projected to reach 500GW annually and by 2050, solar PV capacities are projected to reach 8.8TW with an additional 6.5TW for solar+storage.

The report forecasts a nine-fold growth in grid-connected wind power generation globally, from 2,000TWh in 2022 to 18,300TWh by mid-century.

Also of interest:
Energy Transitions Podcast: Time to humanise energy

However, the report warns that transmission and distribution grid constraints could be a critical bottleneck for the expansion of renewable electricity, as well as other distributed assets such as sotrage and EVs.

Despite efforts from both the EU and the US to lesson permitting delays, DNV is calling for a deeper policy response, which may include “expropriation and financing to ease cable manufacturing production constraints.”

Eriksen added, “There are short term set-backs due to increasing interest rates, supply chain challenges, and energy trade shifts due to the war in Ukraine, but the long-term trend for the energy transition remains clear: the world energy system will move from an energy mix that is 80% fossil based to one that is about 50% non-fossil based in the space of a single generation.

“This is fast, but not fast enough to meet the Paris goals. Ahead of COP 28, DNV will publish its ‘Pathway to Net Zero’ report, showing that technology is not the main challenge, but rather the incentives to drive fast deployment of renewables and storage and disincentives to drive down emissions from fossil fuel are lacking.”

Originally published on powerengineeringint.com