Moving fast on clean energy isn’t enough. Here’s how to accelerate progress

Solar. Electric vehicles. Heat pumps. Hydrogen. The signs are positive. But how can we add even more impetus to the energy transition?

Has the world finally turned a corner on the long road towards a clean energy future? It’s certainly advancing along that road in the right direction, and we think history will look back on 2022 as the year a foot was placed firmly on the accelerator.

Achievements that were once only visible in the distance have now been passed. Electric vehicle sales are approaching 15% of the global market.[1] Solar is on track to become the world’s largest power source in terms of capacity by 2027.[2] And, most importantly, governments are throwing money at clean energy at a rate that far exceeds anything seen before.

But nobody should make the mistake of thinking the route to a successful energy transition will now be smooth and free of hold-ups. Yes, we have seen many signs of hope on the journey so far, but warning lights are flashing up ahead. The chance of limiting global warming to 1.5°C is alive – but barely.

The truth, as our Chairman Al Gore and Senior Partner David Blood write in the introduction to our latest Sustainability Trends Report, is that the world is still not moving fast enough.

Here’s where we see the most promising signs of progress, and the ways we think progress can be accelerated:

Solar superstar

Solar is the world’s fastest-growing electricity source.[3] It hit an installation record in 2022 and is accelerating in line with scenarios that see power emissions falling to near zero by 2050, although other renewables need to up their game for that to happen.

Solar generation jumped by a quarter last year.[4] The reasons for the boom? Supportive government policy plus a desire from homeowners to cut power bills.

But there is an obstacle ahead – long waiting times to connect to power grids. The queues used to be 18 months long but are now more than five years in some countries. This must be resolved quickly.?

Electric vehicles go vroom

Sales of electric cars are expected to surge 30-35% this year after accelerating nearly 60% last year.[5] , [6] They could make up a fifth of the new car market by 2024.[7]

More countries are banning the sale of new cars with petrol engines by 2035 and there is rising public interest in electric vehicles. We’ve moved far beyond early adopters – the mass market is now considering going electric.

Low numbers of charging stations and long charging times may be putting some buyers off, but those complaints are solvable.

The biggest problem is possible shortages of battery metals. New mining and recycling methods can change this. A battery disposal fee could support battery recyclers.

Governments going greener

The US Inflation Reduction Act could pump as much as $1 trillion into clean energy.

This has triggered not only a loosening of subsidy rules in the EU,[8] but also talk of a green trade war that could damage the energy transition. The hotspot is US-China relations, with battles intensifying for market share. We expect China to open the purse strings to defend its markets.

Complete decoupling from China is impossible. It has immense production capabilities for renewable technologies.

Coalitions must be built. National interests and geopolitics cannot get in the way of what needs to be done.

Heat pumps are hot

This may sound impossible, but heat pumps can be 300-400% efficient. How do they do this? By moving heat around, rather than having to create it.

Sales of heat pumps leapt 50% in some European countries last year, and they are now outselling gas furnaces in the US. If run on clean electricity, they can heat or cool buildings with no emissions.

Progress here needs to be complemented by better building codes worldwide, to ensure new buildings, including in the developing world, are fit for the future. Work is also needed to refit drafty old buildings in the EU and US.

Hydrogen hype

Hydrogen has the potential to clean up heavy industry in a way nothing else can. This is part of the reason behind the recent rush of planned projects.

But so many have now been announced that the world might end up having more hydrogen in 2030 than it could actually use.

It’s time to slow down and think. How big could the market realistically be? Can we make hydrogen cost-effective?

One big question is where will it really make sense to use hydrogen? The answer is areas that cannot be electrified directly. Why? Because half the power is lost when electricity is converted to hydrogen and converted back again.

The road ahead

The climate crisis may originate with physics, but solving it is a problem of politics and money. Ultimately, for the clean economy to accelerate, the political cost of trying to undermine it must become too high.

Read our full Sustainability Trends Report to find out more about where the world is on its journey to a cleaner future.

[1] IEA, Electric Vehicles – https://www.iea.org/energy-system/transport/electric-vehicles

[2] IEA, Solar PV – https://www.iea.org/energy-system/renewables/solar-pv

[3] Ember, Global Electricity Review 2023 – https://ember-climate.org/insights/research/global-electricity-review-2023/

[4] Ember, Global Electricity Review 2023 –? https://ember-climate.org/insights/research/global-electricity-review-2023/

[5] IEA, Global EV Outlook 2023 – https://www.iea.org/news/demand-for-electric-cars-is-booming-with-sales-expected-to-leap-35-this-year-after-a-record-breaking-2022

[6] IEA, Global EV Data Explorer – https://www.iea.org/data-and-statistics/data-tools/global-ev-data-explorer

[7] IEA, Global EV Data Explorer – https://www.iea.org/data-and-statistics/data-tools/global-ev-data-explorer

[8] Reuters, EU companies can get as much in EU aid as US subsidies under looser rules – https://www.reuters.com/markets/europe/eu-companies-can-get-much-eu-aid-us-subsidies-under-looser-rules-2023-03-09/