The urgent need for smart capital investments to speed up decarbonisation

Louis Strydom, Director of Growth and Development for Europe and Africa at Wärtsilä, emphasizes the importance of timely and smart capital investments in the right technologies.

In an interview at Enlit Europe, Strydom explained that to reach energy transition targets, $1 trillion of investment will be needed in renewable energy, $500 billion in grids, and $100 billion in flexible technologies annually.

"If we need to make this transition affordable enough so that it can actually happen and happen quickly, we need to be much smarter about the investments and that's where we need to bring in the right assets at the right time in the right mix."

While we change the power mix to incorporate more renewable energy, it's critically important to consider the economics, he said, while ensuring the availability and stability of electrons.

"You can't simply be spending...without actually focusing on the economics. That means we need to be incredibly scarce with our capital and use as little as possible and in the smartest place."

More insights from Enlit Europe:
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The right technologies and policies

Strydom explained that there is a variety of technologies available and a variety of jobs these technologies need to do.

For example, said Strydom, Wärtsilä engines are now required to perform multiple jobs in a day, such as stopping, starting, ramping, and participating in ancillary services markets.

"It's becoming much more complex."

He explained that it's important to get the "right technologies doing the right jobs" and to use them in a portfolio of solutions rather than looking for one silver bullet.

And the way to ensure we invest in the right technologies stems from effective policy mechanisms.

Also of interest: Wärtsilä inks contract to decarbonise power plant in Madagascar

Strydom recommends changes to the market structure to avoid overspending on assets. "We need to get more granular and move below the 5-minute intervals in terms of settling your markets..."

Besides getting market dynamics right, he also advocated for policy pragmatism and getting to grips with the nuances of system flexibility.

Watch the interview for more insights into why making smarter capital investments can speed up the energy transition.