Honestly, we can't do it alone

This is a defining moment for the energy industry. The current global complex landscape sends a potent reminder of the impact that geopolitics can have on energy transition plans. Despite the challenges, we see the energy transition is still happening and has momentum.?

This week sees the Berlin Energy Transition Dialogue (BETD) take place, focusing on the path towards achieving the Paris Agreement goals and halting the pace of climate change. Under the motto: “From Ambition to Action,” the BETD provides an opportunity for an international public and private audience to come together with high-level policymakers and experts to discuss possible actions for the ongoing global transformation of the energy sector. The event could not be held at a more critical time in modern history with significant implications for the future of energy.

The war in Ukraine brings the issue of energy supply and the security of supply into focus. Three things are crucial for countries to have energy sovereignty:

1. more diversity in the energy system
2. faster implementation of energy transition measures
3. massive expansion of infrastructure and storage facilities.

But it is not only the war that is massively changing the energy sector. We’ve also got to reckon with the impact of climate change – and the clean energy transition.?

When the problem is global, innovation cannot be local. We need to work across borders. We need to innovate in ecosystems and partnerships to leverage the potential of innovation – and to speed up the scalability of existing and new technologies.

To this end, global renewable energies must also be expanded much faster. In 2021, the share of renewable energies worldwide grew by 8% to a total capacity of 8,300TWh, according to the Global Energy Review. This corresponds to almost one-third of global electricity consumption per year.?#

Natural gas as a facilitator of the transition

As the cleanest burning and fastest-growing fossil fuel, we have to reckon that natural gas will be a key component of any future energy transition scenario.

Countries (primarily Europe) will need to diversify the natural gas supply more intensely and make greater use of liquefied natural gas (LNG). Gas fueled 24% of total global power generation in 2020 and will play a key role in displacing coal-fired generation until the 2030s.

Where electricity cannot be covered by renewables, highly efficient power plants based on natural gas can help halve CO2 emissions compared to coal-fired power plants. Converting gas turbines to green hydrogen would facilitate climate-neutral operations in the future. Today, our gas turbines tested in our new Zero Emission Hydrogen Turbine Center are ready to burn up to 75% of hydrogen in the fuel mix. We will hit 100 % by 2030.

?Scaling up storage infrastructure

All this will only work if infrastructure and storage facilities are massively expanded and adapted to the new conditions: from modern high-voltage direct-current transmission grids and high-performance pipelines to LNG terminals and extensive gas storage facilities.

The growing share of renewable energies also requires a fundamental strengthening of the existing power grid. In Germany alone, more than 7,500 kilometers of transmission networks will have to be modernized, strengthened, or newly built. In the UK, the National Grid’s Viking Link is a 1400-MW interconnector that will supply the technology to enable the direct sharing of clean electricity between Britain and Denmark for the first time. We are supplying the lead technologies for the project, including a zero-emission hydrogen fuel cell to provide off-grid power to the project’s construction site.?

?Finance

In the energy world, investments have long timescales and are often capital intensive. McKinsey Global Institute recently estimated that a net-zero world will cost around 275 trillion dollars by 2050. Moreover, each country has its own priorities and unique situation.?

Governments should look responsibly at the risk-reward profiles to remove obstacles and regulations that can prevent some companies from moving forward with promising ventures. One way this can be done is by direct investment and loan programs.

How quickly the transition happens is not just a question of economics but also one of global co-operation on climate change. Politics, business, and society urgently need to work more closely together. Energy security and a successful energy transition are everyone’s responsibility?