The role of infra in the energy balancing act
As the global population trajectory is set to rise, the energy demand is poised for a parallel surge. This growth intersects with the escalating imperative to mitigate climate change impact.
Energy is a vital component for the livelihood, health, and prosperity of communities, cities, and economies. Its demand is forecasted to double by 2050 to match the surge in world population to 9.8 billion in that same year. This is anticipated to place immense strain on food, water, and energy production. On top of this, the world also faces an issue with equal gravity and consequences – climate change caused by Greenhouse Gas (“GHG”) emissions through the process of energy production.
Overcoming these challenges warrants a drastic change in the global energy system and an array of alternate energy sources. Due to the complexity of the global energy system and the sharp rise in demand, this will require the collective effort of all stakeholders throughout the supply chain, including consumers. This change in our energy systems will not be instantaneous, and fossil fuels will continue to play a crucial role in providing reliable energy in the interim.
Energy infrastructure companies play a crucial role in this global energy transition. Their mission must strike a delicate balance between delivering affordable, reliable energy with the imperative to reduce environmental impact. In our business as an offshore energy solutions provider, technology plays a vital role in enabling this inclusive transition. Technologies such as those championed by our Zero Emissions FPSO Concept increase energy efficiency of our assets and leads the overall reduction of emissions. At the same time, we participate in the carbon capture value chain, having carbon capture initiatives part of our strategy to remove the majority of the residual emissions on our operating assets.
“Carbon capture and storage (CCS) technology and managing methane emissions throughout the fossil energy value chain can help meet ambitious CO??emission reduction targets, while fossil fuels remain part of the energy system. This will thereby allow fossil fuels to become "part of the solution", rather than remain "part of the problem".?All technologies have a role to play in an energy system guided by rational economics.” (UN Chronicle, No. 3 Vol. LII)
Investments in the exploration of Nature-based Solutions (NBS) by energy infrastructure companies are also crucial for enhancing global emission reductions. NBS, such as afforestation, reforestation, and the protection of forests play a key role in absorbing CO? from the atmosphere and enhancing biodiversity. These solutions not only sequester carbon but also provide benefits like improved water quality and resilience against climate impacts.
Energy infrastructure companies, like all other corporations around the world, need to get serious about reducing their own emissions. There is a global push to do so, with many governments, financial institutions, and the private sector setting their own climate goals and action plans, aligning with the Paris Agreement. Carbon offsets are one of the tools to manage residual emissions, supplementing primary reduction efforts. Companies are able to catalyse the development of both the domestic and international carbon markets not just through the trade of credits, but by taking pilot-risks in developing carbon projects, producing tangible environmental benefits through carbon removal or avoidance. Furthermore, all stakeholders need to unite, collaborate, and share their distinct insights to accelerate the growth of the carbon market.?
The power and transportation sectors account for 42% and 23% of global greenhouse gas emissions respectively (IEA, 2023), making these the two most material contributors to global emissions. Thus, beyond technological advancements in operational emission reduction, investments into building alternatives, clean energy infrastructure (such as wind and solar) and developing a low-carbon transportation infrastructure that utilises these cleaner energy sources are key. These efforts are pivotal for evolving the global energy system and ensuring the success of the energy transition by securing and scaling reliable alternatives.
“We are passionate about doing our part to seize these opportunities, and to collaborate with like-minded partners to unlock exponential value that can bring about real, material change for the better.” – Lim Chern Yuan, Yinson Group Chief Executive Officer
The journey towards a balanced energy future is complex and multifaceted. Infrastructure serves as the backbone of this journey, enabling the integration of innovative technologies, fostering sustainable practices, and facilitating the transition to a low-carbon economy. As we navigate this path, it is imperative that we leverage every tool at our disposal. The collective efforts from all parties will determine the pace and success of this global endeavour, shaping the legacy of our future.