COP28 will examine whether the global community will meet its climate targets — a half-century after the 1973 Arab Oil embargo. The United States Energy Association tackled this scenario, arriving at far-ranging conclusions about how far we have come and whether net zero by 2050 is possible.
The oil-rich United Arab Emirates (UAE) is now hosting the global climate conference in Dubai — a nation that uses its wealth to do good and expand climate-friendly solutions worldwide. The UAE and the International Renewable Energy Agency (IRENA) aim to build on the solar, wind, hydropower, geothermal, and battery storage foundation.
“Wind, solar, batteries, electric vehicles, and heat pumps, have either reached their inflection point or passed the inflection point. They’re now competing on cost and end value in the marketplace,” says Markham Hislop, publisher of Energi Media, during the forum where I was a panelist. “We expect exponential growth in adopting these technologies, although countries will build at different rates.”
He adds that China will drive the energy transition over the next 30 years — especially in the developing economies. For example, 130 countries attended China’s third Belt and Road Initiative October 2023 forum to learn about and win Chinese investment in global infrastructure.
What does net zero mean, and does it equate to the elimination of fossil fuels? Net zero involves removing as much carbon from the atmosphere as we put into it. For example, the rainforests absorb CO2. So does direct air capture or carbon capture and sequestration, albeit costly and in their infancy.
Paris aims to keep temperature rises to no more than 1.5 degrees Celsius by mid-century compared to pre-industrial levels to mitigate such things as droughts, floods, and food and water shortages. Scientists say we are nearing the 1.2 degrees mark and on track to hit 2.7 degrees. Before Paris, the trend was 4 degrees Celsius.
The question now is whether emerging nations will rely more on renewable energy resources or coal, oil, and natural gas to fuel their economies. Which sources are are the most affordable and most accessible?
Can Societies Adapt To A New Energy Economy?
Last year, the globe added a record 300 gigawatts of renewables. IRENA says that green energy makes up 40% of the total installed capacity worldwide. However, the growth rates must rapidly escalate if the Paris Agreement is to succeed. Consider that we emit 35 billion tons of CO2 annually from fossil fuels and the equivalent of 5 billion tons of CO2 from deforestation.
“If you look at the climate models, they show that it’s cumulative carbon emissions that are correlated and drive temperature increases,” says David Greely, chief economist at Abaxx Exchange. It’s a function of the rate we have burned fossil fuels and deforested lands for agricultural purposes.
“We need it to go to zero net carbon if we’re going to see temperatures stabilize at current levels,” he adds. “Our ability to take carbon out of the atmosphere at this point is very limited compared with how much we put in. Getting to net zero means radical reductions in fossil fuel use and deforestation. We talk about peak oil. We haven’t hit peak coal globally.
“We live on an energy system built over 150 years that depends on cheap, reliable fossil fuels, and we need to get off that very quickly, Greely concludes. “And that is a staggeringly complex problem. When people must choose between affordable and reliable energy and climate goals, they return to affordable and reliable. Nobody wants to freeze or have their economy collapse.”
How much of the hesitation is foot-dragging compared to the practical implication of making significant societal changes? The U.S. Department of Energy says the grid may need to expand by 60% by 2030 and triple by 2050 to meet clean energy demands. Melanie Kenderdine of the Energy Future Initiative told the audience that we need 360,000 towers to build out the long-distance transmission system, requiring steel, aluminum, and copper — raw materials in high demand.
Internationally, the task is even more challenging. Take the drive to electric vehicles, which Branko Terzic says is a function of disposable income and access to electricity: only 3 billion out of 8 billion globally have “adequate electricity.”
However, incomes are going up. In the last decade, 900 million worldwide entered the middle class. And China has as many cars as the United States, although not on a per capita basis. By comparison, India has 50 vehicles per 1,000 people.
“The developed world may go electric. But the developing world — without electricity — will use gasoline,” says Terzic, managing director of Berkeley Research Group.
Can Utilities Power the Future?
COP28 will dive deep into where countries are falling short of emissions reductions and what they can do to change that. Francesco La Camera, director-general of IRENA, agrees that the global community must catch up, noting that the legacy energy infrastructure favors the production of oil, gas, and coal production.
Still, 80% of the installed electric generation capacity has come from renewables in the last four years due to falling prices. However, increasing the size and scale of those efforts requires climate finance and sound public policy. That means providing utilities with the incentives to make such investments and motivating richer countries to pay the Global South to keep their rainforests standing.
Greening the world will require $5.7 trillion, returning 85 million new jobs by 2030, IRENA says. By contrast, the oil and gas industry supports 9.8 million jobs or 5.6% of total U.S. employment, says PwC.
If the power and gas utilities rise to the challenge, they will prosper and set an example for other industries. Ameren
AEE
CNP
DUK
“The oil and gas industry is already getting disrupted,” says Energi’s Markham Hislop. “Smaller firms can’t get capital, or the cost is excessive. Climate policies are squeezing them, and you’re seeing many lost jobs,” forcing them to double down on the status quo and fend off political challenges.
Look to the newspaper business, which peaked in 2005 just as Google
GOOG
Indeed, that’s what the UAE is planning for — ‘the last drop of oil’ — and why its long-term strategy is to continue making green energy investments. Change is coming, but at a slower pace than necessary.
Read the full article here