Energy leaders concerned about pace and progress of clean energy transition
The majority of energy leaders are concerned about the pace and progress of the low-carbon energy transition, citing challenges around affordability and access to modern and reliable energy systems.
A new poll of more than 700 energy leaders globally from the World Energy Council has found that there is an ongoing scramble to recover financially from Covid-19, which has been compounded by the gas price hikes resulting from the ongoing war in Ukraine.
The survey found that 64% of energy leaders are concerned by the pace of energy transitions, which is almost double the amount that expressed similar concerns in last year’s survey.
Additionally, 43% highlighted affordability and modern energy access as the biggest challenges facing the transition, while 46% warned that self-interests and a “me first” approach to green technologies were creating too much focus on country-specific energy security, rather than tackling it as a global agenda.
The Council’s World Energy Pulse, published today (10 May), also notes that President Biden’s Inflation Reduction Act has caused nations to reevaluate their approaches to energy security.
The World Energy Council’s secretary general Dr Angela Wilkinson stated that the results showcase that the “world energy system is no longer fit for purpose” and that nations and decision-makers needed to promote a faster transition to fairer energy systems.
“Throwing more money and technology at complex system change is not enough to ensure faster or fairer energy transitions,” Wilkinson said. “Inclusive implementation is essential – mobilising, enabling and convening more people, diverse communities and different industries, and understanding place-based realities.
“Addressing this complex challenge requires a humbler leadership approach and active learning. Our call to action on humanising energy is key to making energy transitions happen in a new context of low trust, increasing fragmentation and polarisation, and new demands for energy justice.”
The Pulse found that 86% of respondents are trying to manage trade-offs over security, affordability and sustainability of energy systems, through the World Energy Trilemma framework. The framework offers countries a way to benchmark clean, just and inclusive energy transitions and will help shape discussions at the upcoming World Energy Congress, taking place in Rotterdam in April 2024, which will convene 7,000 visionary world energy leaders.
The Pulse also found that decarbonisation technologies are dominating the interests of decision-makers, cited by 48% as the main technology focus, compared to adaptation solutions, such as reuse (4%), remove (4%) and recycle (3%).
Almost 40% of respondents stated that the financial system will need to align with the needs of the sustainability transition to help improve energy systems. However, just 8% of respondents are concerned about market volatility, which has significantly reduced since the start of the coronavirus pandemic.
Concerns persist, however, that stalling the global energy transition will add to household bills. The UK, for example, has seen energy bills skyrocket in recent months and research suggests that failed green policies have contributed to the price increase.
Research from the Energy and Climate Intelligence Unit (ECIU) found earlier this year that UK homes are paying, on average, £1,750 more for energy and fuel annually than they would have if the Government had brought forward effective national campaigns on insulation, low-carbon heating and transport and domestic renewables.
The analysis from the ECIU follows on from a separate study from Imperial College London, which concluded that many other major European economies, including Germany, have cut their gas demand more rapidly in 2022 than the UK.
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