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In a world grappling with climate change, clean energy is crucial for emissions reduction and offers significant benefits to communities, especially those lacking access to reliable power, hindering education, healthcare, and economic opportunities. The shift toward clean energy becomes more pronounced and accelerates due to the circumstances and consequences in the wake of the COVID-19 pandemic. According to the International Energy Agency (IEA), there is a significant potential for a quicker, cleaner energy future as a result of the 3.8% year-over-year decline in oil and gas demand and the 3% increase in renewable electricity generation in the first quarter, which made up 28% of the total electricity supply. However, the progress made remains insufficient. The World Economic Forum (WEF) emphasizes the need to triple renewable energy and substantially escalate investments in solutions such as clean fuels, storage, carbon management, and advanced nuclear. Realizing this heightened growth trajectory requires an annual investment of over $500 billion in advanced energy solutions by 2030.
THE GROWING ENERGY DEMAND
As the global economy recovers and international tourism resumes, energy needs are expected to grow by more than 60% in the coming decades, as reported by the APPEC conference. Despite progress in renewable energy production in 2022, about 70% of our energy still comes from fossil fuels to meet our current demands. While initiatives like the European Union's stringent RED II policy, aimed at achieving 32% renewable energy consumption by 2030 has accelerated the global shift toward cleaner energy sources, our continued dependence on fossil fuels remains a major hurdle in achieving a swift transition to cleaner energy alternatives.
THE SCATTERED TRANSITION
Another significant hurdle in achieving a swift energy transition lies in the lack of global consensus regarding goals and strategies. Countries worldwide have established disparate targets for attaining net-zero emissions, with timelines ranging from 2050 in the European Union and the United States to 2070 in India. This disparity in objectives can complicate efforts for international collaboration and coordination during the transition process. Furthermore, numerous energy-producing developing nations heavily rely on oil and gas exports to sustain their budgets and fund social programs. Shifting from these traditional revenue sources presents a formidable economic challenge. For example, Nigeria has been depended on oil for over 80% of its revenue, despite attempts to diversify income streams.
5 STEPS TO ACCELERATE ENERGY TRANSITION
While targets and plans for the global energy transition by 2030 may seem slow to progress due to the scale of the task and lengthy timespans, there are immediate actions that can be taken with impactful results achievable within 2024. The World Economic Forum suggests five prompt actions to accelerate the energy transition. Firstly, encourage corporate members of the United Nations Framework Convention on Climate Change (UNFCC) to announce net-zero plans, as only 10% have such strategies, aligning global efforts for climate action. Second, call for a 50% reduction in project approval timelines by regulators to streamline processes. Third, advocate for a doubling of annual investments in clean energy technologies by innovators, energy companies, users, and investors to accelerate the growth of advanced solutions. Fourth, champion industrial-scale deployment of critical technologies like clean hydrogen and storage. Lastly, highlight the importance of stable policy and regulation to provide a consistent and predictable environment for investors, ensuring confidence and minimizing delays in the deployment of clean energy solutions in 2024.
Considering the diverse goals in energy transition and an escalating global energy demand, collaborative efforts are crucial to accelerate the transition toward renewable energy sources. While a rapid and comprehensive transition seems challenging, it is also vital to acknowledge that nations with diversified energy portfolios will be better positioned to weather energy crises, whereas others may grapple with significant challenges. A global focus on a “Just Energy Transition” should take center stage to ensure inclusivity in embracing cleaner energy sources. Now, more than ever, enhanced collaboration is pivotal for driving this change.
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