Resilient Energy Transition: WEF study

In News

• ‘Fostering Effective Energy Transition 2022’ report by World Economic Forum (WEF) has called for urgent action by both private and public sectors to ensure a resilient energy transition.

About

• The report builds on the trends from the Energy Transition Index to provide recommendations on how to navigate the transition through a turbulent macroeconomic and geopolitical environment.
• Strengthening energy security is of paramount importance having dual diversification; in importing partners in the short-term and in fuel mix in the long-term thus improving resilience.
• The report addresses the challenges to environmental sustainability, energy security and energy justice and affordability.

Major Findings

• Transition not in tandem with climate urgency: 
  • The energy transition is not keeping pace with the growing climate urgency and recent compounded disruptions (pandemic and Russia-Ukraine conflict) have made the transition even more difficult. 
  • High energy prices, risks of energy supply shortages, and soaring demand for fossil fuels are simultaneously challenging energy affordability, energy security and access, and sustainability.
• Holistic approach: 
  • It is crucial to develop adequate enablers and support mechanisms to keep the momentum of the transition through this turbulent phase. There is need for holistic approach that delivers concurrently on the three transition imperatives:
    • energy affordability
    • availability
    • sustainability
• Lack of affordable energy supply: 
  • The lack of access to an affordable energy supply has emerged as a key threat to a just transition. 
  • Actions are necessary to protect vulnerable stakeholders through appropriate support measures, in a way that incentivizes efficient consumption.
  • Behavioural interventions and fourth industrial revolution technologies can help households and businesses alike.
• Diversity and security:
  • Energy diversity and security are in short supply. Dual diversification (of supply source and supply mix) is key to strengthening countries’ energy security.
  • Diversifying the ecosystem of import partners in the short-term and diversifying the portfolio of domestic energy with low-carbon alternatives in the long-term can yield significant benefits.
• Matching demand with supply: 
  • Supply-side interventions will need to be augmented with demand-side efficiencies. 
  • Current energy market volatility and security constraints provide an opportunity to supercharge the transition by boosting demand for clean energy and fostering more efficiencies.
• Ensuring effective regulations: 
  • Regulatory frameworks need to be strengthened to drive the necessary actions and investments. 
  • Anchoring climate commitments into legally binding frameworks would not only ensure that those commitments endure political cycles, but also provide enforcement mechanisms to keep the long-term implementation efforts on track.
• Going ‘Clean’: 
  • Industrial activity generates more than 30% of anthropogenic emissions, yet many industries face considerable challenges to decarbonize. 
  • ‘Clean demand’ signals can nudge new investments in  projects required for the development of low-emission industries.
• Net-zero ecosystem: 
  • The solutions to industries’ net-zero chokepoints are seldom found within a single company or even industry. 
  • A new generation of ambitious multi stakeholder collaboration models between suppliers and customers, industry and cross-industry peers, and the wider industrial ecosystem of stakeholders has emerged and needs to be built upon.

Energy Transition in India

• Need for Transition
  • India is committed to achieve a net-zero target by 2070 and meet fifty percent of its electricity requirements from renewable energy sources by 2030.
  • In order to meet its high electricity demands on account of rising population and growth, it has to increase its reliance on fossil fuels in the short run. However, it has done well to diversify its energy basket with increasing renewable share every year.
• On Commitments: 
  • It has overachieved its commitment made at COP 21- Paris Summit by already meeting 40% of its power capacity from non-fossil fuels- almost nine years ahead of its commitment.
  • The share of solar and wind in India’s energy mix have grown phenomenally.
  • India is pioneering a new model of green economic development which provides a blueprint for other developing economies.
• Growth of green energy:
  • Renewable electricity is growing at a faster rate in India than any other major economy, with new capacity additions on track to double by 2026.
  • The country is also one of the world’s largest producers of modern bioenergy and is ambitious in expanding further.
  • The IEA expects India to overtake Canada and China in the next few years to become the third largest ethanol market worldwide after the United States and Brazil.
• Renewable batteries: 
  • India is particularly well placed to become a global leader in renewable batteries and green hydrogen. These and other low-carbon technologies could create a market worth up to $80 billion in India by 2030.
• India and Energy Transition Index: 
  • India ranked 87 out of 110 countries in the Global Energy Transition Index (ETI), a benchmark by the World Economic Forum.

Way Forward

• Prioritising a resilient energy transition and diversification of the energy mix is crucial in responding to energy market volatility.
• The key stakeholders; governments, companies, consumers should come up with collaborative approaches to push the energy transition.
• The transition to clean energy is an imperative but the technology is costly. The developed country should be serious in their efforts to transfer funds and technology to developing countries if the earth has to attain net-zero emission.

Source: BS