Energy Transition: green for a global cause

By March 24, 2022November 16th, 2022No Comments
Energy Transition

Access to reliable and affordable energy has always been a global concern. Now, more than ever, the concern has grown to include sourcing “green” energy and minimizing carbon footprints in an effort to curb much of the irreversible damage done to the planet. One of the ways energy experts are taking on the issues of clean energy and sustainability is through a worldwide shift called the Energy Transition

What is Energy Transition?

The Energy Transition is the transformation of the global energy sector from nonrenewable sources like oil, natural gas, and coal to renewable energy production. This transformation is being made possible through technological advancements, an international push towards sustainability, and more recently, the falling costs of renewable energy.

What is Net Zero?

At the 26th United Nations Climate Change Conference of Parties (COP26), nearly 200 countries set, or are at least, considering a goal of net-zero emissions by 2050. “Net Zero” means cutting greenhouse gas emissions to as close to zero as possible. In order to keep global warming to no more than 1.5°C (2015 Paris Agreement), emissions need to be reduced by 45 percent by 2030 and ultimately reach Net Zero by 2050. Energy transition is crucial because emissions are continuing to rise, along with the earth’s temperature. Currently, the world’s temperature, on average, is about 1.1°C warmer than it was in the late 1800s. 

International Action

Today, the energy sector is responsible for around 75 percent of global greenhouse gas emissions. Replacing fossil-based systems with wind and solar can dramatically reduce carbon emissions.

According to research provider BloombergNEF, the world put $755 billion towards low-carbon energy technologies last year, up 27 percent from 2020. Additionally, the countries with the most contributions to energy transition in 2021 included China, the U.S., Germany, the U.K., and France.

Examples of specific national policies and plans for reaching Net Zero:

  • The North Sea Transition deal between the U.K. government and the offshore oil and gas industry aims to decarbonize the North Sea region with new, cleaner energies.
  • The EU Climate Benchmark and Paris Aligned Benchmark provide a tool to support climate-focused investment strategies.
  • The Dominican Republic is working with a private sector to fund the plans in its Nationally Determined Contributions (NDC), including revamping transportation, a major source of emissions, by shifting to electric and hybrid bus systems. 
  • China’ plans include increasing the share of non-fossil fuels in primary energy consumption to around 25 percent. This may allow CO2 emissions to peak before 2030 (and achieve carbon neutrality before 2060), bringing its total installed capacity of wind and solar power to over 1.2 billion kilowatts by 2030.

United States Action

According to Deloitte Insights, between 2010 and 2020, U.S. renewable energy generation doubled from 10 to 20 percent — the majority of that growth coming from solar and wind energy.

The Biden Administration has set a goal to decarbonize the power sector by 2035, consistent with the Paris Agreement. The administration said they intend to set a Clean Energy Standard (CES) and invest 65 billion dollars in modernizing the power grid as part of its infrastructure plan. These measures are awaiting approval from Congress.

The administration has also begun to target transportation emissions reduction. The goal? To make half of all new vehicles sold in 2030 zero emissions. Stricter fuel efficiency and emissions standards for light-duty vehicles have also been proposed — especially at the state level. California is allowed to set more strict emissions standards than the federal government. Twelve other US States and the District of Columbia are currently following California’s standard.

The United States’ progress, while impressive, will need to continue at an accelerated pace to achieve its clean energy goals. According to S&P Global Market Intelligence, the country will need to add an additional 630 GW of wind and 450 GW of solar by 2035, or about 85 GW of new renewable energy each year to reach its 2030 and 2050 goals. 

With the alignment of state and federal policies, the U.S. has a better chance meeting its clean energy targets. At the moment, only 21 out of 50 states have carbon-free electricity goals and only 2 have Net Zero by 2050 goals.

Corporate Initiatives

According to the EPA’s Green Power Partnership, of the very “greenest” businesses, 307 total organizations utilize nearly 38 billion kilowatt-hours of green power, which is equivalent to the annual electricity use of more than 3.5 million average American homes. Among these organizations are Microsoft Corporation, Apple Inc., HP Inc., and the New York Mets.

Amazon is the top corporate buyer of renewable energy in the U.S. and Microsoft is a close second. Both are aiming to use 100 percent renewable energy for all operations by 2025. They also made the commitment to decarbonize completely and operate on 24/7 carbon-free energy by 2030.

The International Energy Agency estimates that one percent of all global electricity is used by data centers, contributing to one percent of all global CO2 emissions. Most of the world’s data centers are found in the U.S. Tech companies like Microsoft and Amazon use significant amounts of electricity for data centers to drive Amazon Web Services (AWS) and Azure cloud services, and power other operations. 

To reduce data center carbon footprints (and eventually reach Net Zero emissions), tech giants need a combination of innovation and technology. They must also focus on in-house efforts like optimizing server cooling, moving workloads to the cloud, and investing in technologies that help reduce energy usage overall. 

Clean Energy and Jobs

Over 3 million Americans currently work in clean energy (renewable energy, grid and storage, clean fuels, energy efficiency, and clean vehicles), according to the Bureau of Labor Statistics. 

Climate policy proposals from the Biden administration could create millions of U.S. jobs by 2050 and boost the economy. A 2021 report by the Clean Energy Labor Supply shows that reaching 50-70 percent renewable energy generation by 2030 would create between 500,000 and 600,000 jobs — in solar, wind, and battery storage alone.

These jobs and economic growth rely on current and future government commitments and willingness to pass climate legislation and clean energy initiatives at the federal, state, and local levels. 

A Way Forward

The world certainly has its work cut out for itself as we focus our collective efforts on the many ways we can reach our decarbonization goals, while balancing energy availability, affordability, and security. At a time when fossil fuels and renewables are working together to provide the energy needed to power the world, we must remain mindful of the end goal of sustainability, and take collective action to ensure a successful Energy Transition.

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