Possible Energy Transitions through 2029
Renewable energies are experiencing rapid growth, due not only to their limited impact on the environment but also to shrinking costs. To fight climate change, new investments in low carbon technologies are necessary. Apart from its positive aspects, the energy transition carries risks, notably geopolitical. The notion of energy security will be profoundly modified. These risks can be anticipated and managed.
The world has embarked on an energy transition that entails fundamental change in the social, economic and environmental spheres of human society. Public and private actors worldwide are increasingly engaged in the dynamics of this transition which is set to accelerate as global ambitions to combat climate change and to advance sustainable development require the rapid decarbonization of energy. These changes will also profoundly affect geopolitics, as they will have implications for the global distribution of power, relations between countries, the risk of conflict, and global stability. While the potential benefits of the transition clearly outweigh the risks overall, governments and industries need to revaluate their situation and outlook in the new world that is evolving. They have to try to steer their way to economic growth and a sustainable future, while navigating the disruption that a fast-moving transition may bring.
The energy transition
The speed of the on-going energy transition and its fundamental impact on the shape of global energy systems exceeds all expectations. Ten years ago, there was still widespread doubt that renewables were a viable and reliable source of energy that could power economies and meet growing energy demand. Instead, the prevailing perception was that renewables were a luxury which only a few industrialized countries could afford. In fact, most of the energy scenarios and projections considerably and consistently underestimated the growth potential of renewables.
But the pace of developments in the growth of renewables in the global energy mix in the last ten years leaves today little doubt about their enormous potential. Globally, the total installed renewable electricity capacity now stands at 2,179 GW, and in terms of generation, at approximately 6,000 TWh, which is about 23 percent of global electricity production. In 2017, 167 GW of additional renewable energy generation capacity was installed, which represents 70 percent of all new capacity, and more than double that of fossil fuels. One of the main drivers for this energy transition is that the business case for renewables keeps getting stronger. The levelized cost of electricity (LCOE) for solar photovoltaics has fallen by more than 73 percent since 2010, and the cost of electricity from onshore wind has fallen by more than 23 percent. IRENA analysis estimates that by 2020, all renewable energy technologies currently in commercial use will be cost-competitive with fossil-fuels in most parts of the world, and even undercut them significantly in many cases. […]
OUTLINE
- The energy transition
- Energy transition in the next decades
- The geopolitics of energy transition
Adnan Z. Amin is Director General of the International Renewable Energy Agency (IRENA) in Abu Dhabi.
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Possible Energy Transitions through 2029
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