Spring 2024 issue of ETC Matters
Energy Transitions Commission
Reaching net-zero carbon emissions from the harder-to-abate sectors is technically & financially possible by mid-century
ETC Matters is our seasonal newsletter bringing you the latest from the Energy Transitions Commission. In this issue, we are pleased to share:
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Members Talk
Each issue we highlight our members & introduce their work in pursuing the transition. In this issue we feature an exclusive interview with?Mikael Nordlander, Director Industry Decarbonisation at Vattenfall.??
What are the key milestones you see on the road to net-zero, and why??
We need to reach the tipping point for development and deployment of some key enabling technologies for the transition. We are starting to see that happening for PV [photovoltaic] and batteries, but it is needed also for other fossil-free technologies. We also need to shape the frameworks for markets in a way that the transition becomes more profitable and less risky than the fossil business-as-usual. For example, by including externality costs for fossil technologies and initial stimulation of fossil free solutions. This is partly happening but needs to be more widespread. To really unleash the speed and force of the transition, we eventually need to reach a state where the transition becomes desirable,?not only necessary. The power of good examples cannot be overestimated here.??
What is the one necessary change you feel most personally passionate about in the transition journey???
Since 2016, we have been working hard together with Swedish heavy industry to replace fossil fuels with fossil free hydrogen and electricity, for example, in the HYBRIT project where we have developed solutions for a fossil free value chain for iron- and steelmaking together with SSAB and LKAB. Eight years and €200 million later, we have proven that the technology works and is ready to scale up. Since the global iron and steel sector is responsible for about 7% of global CO2 emissions, the HYBRIT solution could play a very important role for the transition of this industry. Having the opportunity to be part of setting up and realising such a project is a great privilege.??
New ETC Members
It is great to see our work and impact expand as we strengthen our membership.
We are pleased to welcome a new ETC member this quarter, SLR Consulting. SLR Consulting's driving purpose is Making Sustainability Happen. Its team of expert advisors and technicians partner with clients to tackle some of the world's most complex sustainability challenges. SLR has been advising clients for over 25 years at every point of their project life-cycle. Starting as a UK business, they now operate as a global company with more than 3,500 people delivering client solutions across six regions. The ETC is pleased to welcome back Bradley Andrews, CEO of SLR Consulting, who was previously ETC Commissioner at Worley.
ETC Publications
Read about key insights from our reports, and hear about the analytical work we have coming up next.
How to finance the energy transition?
Finance remains a top priority on the climate agenda. It plays a pivotal role in building a clean energy system and phasing down fossil fuels. Our report, Financing the Transition, pinpoints the finance flows and policies required to unlock this transition.
There are two distinct types of financial flows needed for the energy transition: capital investment, and concessional/grant payments where there is no economic incentive for critical priorities, namely phasing out coal, ending deforestation, and carbon dioxide removals. While investment is expected to come predominantly from businesses, concessional/grant payments require funding from governments, voluntary carbon markets, and philanthropy.
Capital investment in the energy transition is expected to average ~$3.5 trillion annually until 2050. But much of this investment will be required even in the absence of net-zero objectives, namely to build power systems in the developing world. And after accounting for the anticipated decline in fossil fuel investment, ~$3 trillion a year is required. That is just 1.3% of annual global GDP over the next 30 years. There is more than enough global capital to finance the transition, and the falling costs of renewable energy make a compelling business case for investment.
Investment will need to grow from $1 trillion today to $2 trillion by 2025, $3 trillion by 2030. This requires a doubling of investment in high-income countries and China by 2030, and a four-fold increase in middle- and low-income countries.?With well-designed government policies, which create the right incentives for low-carbon investment, achieving this financing goal is not only feasible but imperative for a sustainable future.
Looking ahead
Offshore Wind
The ETC is currently drafting an Insights Briefing on offshore wind, which explores recent perceptions of a technology in crisis. Will costs come down again? This briefing sets out five key actions that can help to relaunch the confidence cycle in offshore wind, which remains a key technology in the clean energy transition.
Power Grids
Electricity demand – and therefore power flows – is set to grow by 2.5-3.5 times from now to 2050. The generation mix is expected to shift dramatically towards intermittent renewables. But significant economy wide electrification requires a wider web of wires (e.g., for road transport, heating homes, low temperature industrial heat). Grid investment and reform is therefore critical to increasing the uptake of renewables and reducing power sector emissions. The ETC’s work on electricity grids will cover: the challenge of building the grid, how to maximise the use of new and legacy assets, and managing the renewables system balancing challenge with interconnection, storage, flexibility and generation technologies.?
Buildings Decarbonisation
Roughly 30% of final global energy demand comes from buildings. The ETC’s work on buildings decarbonisation will describe the optimal fuels and technologies for heating and cooling across countries and building archetypes. Our analysis will aim to answer how far final energy consumption can be reduced by improving efficiency and highlight solutions to lower peak electricity demand in buildings. The team recently hosted an expert workshop with ETC members which focussed on building heating and opportunities to reduce energy consumption.
Nationally Determined Contributions (NDCs)
Every five years, members of the Paris Agreement must submit Nationally Determined Contributions (NDCs), declarations of their climate action plans to reduce emissions. The next round of submissions is due in 2025. To date, nations have taken different approaches to setting their NDCs, which has led to a difficult-to-compare set of results and varying levels of ambition.The ETC is exploring how to accelerate the ambition and implementation of NDCs submitted at the next ratchet in 2025.
Road Transport
The ETC is also developing new analysis exploring energy productivity in road transportation, both passenger and freight vehicles. Building on past work like Making Zero-Emissions Trucking Possible and our Fossil Fuels in Transition report, we anticipate widespread road transport electrification by 2050. Battery electric vehicles (BEVs) already exhibit three times the efficiency of ICE vehicles. Our analysis will look at how improving technical efficiency of road vehicles can reduce oil consumption, electricity demand, emissions, and how use of alternative transportation methods will impact the future of road transport.??
Events
London Climate Action Week
Now in its 6th year, London Climate Action Week (LCAW) marks the midpoint in the global climate calendar. This annual festival of climate action brings together individuals, organisations and communities as they host a diverse range of events and collaborations.?
London Climate Action Week aims to mobilise whole-of-society climate action in a diverse global city, through innovative coalitions and city-wide engagement. In 2024, join us in harnessing the power of London to accelerate global climate action.
领英推荐
The ETC is delighted to once again be a Knowledge Partner with Climate Action and will attend Climate Innovation Forum at LCAW in this capacity.?
The Transition Explained
Our short explainers describe key energy transition topics quickly in digestible formats.
4 myths around planning and permitting wind and solar projects
In this video we explain four common misconceptions about why wind & solar projects are being held back. The real issue is that it currently takes up to four times as long to plan and permit renewable projects than it does to build them.
By streamlining processes, the ETC estimates project development times would be halved.
To find out more, read the ETC’s Insights Briefing: Streamlining planning and permitting to accelerate wind and solar deployment.
Subscribe to our YouTube channel to be notified about upcoming videos.
Regional Spotlight – ETC Around the World
Each issue will highlight work from our programmes across the world. In this issue we hear from ETC’s Global Programmes Lead, Rose Dortch, about the engagements with partners and members in Indonesia and India at the start of this year.
ETC Member Focus: Indonesia and India
In early February, the ETC’s Chairman, Lord Adair Turner, and our Global Programmes Lead, Rose Dortch, headed out to Indonesia and India for their first visit of 2024. The agenda was action-packed, meeting with local corporates, ETC members, partners and local & national government officials. We learned invaluable lessons, better understood local dynamics driving the pace of the transition to date, and opportunities to achieve net-zero as efficiently and quickly as possible – with implications for similar markets.
Indonesia
Adair and Rose began their Indonesian leg with a visit to ETC member Institute for Essential Services Reform (IESR). The discussion with IESR’s analytical team covered their recent groundbreaking reports on the energy transition in Indonesia. The work most notably presents an argument for >85% of Indonesia's electricity to be sustainably sourced from solar power, without the need to compromise grid stability. This assertion is supported by their sophisticated 15-minute dispatch model, confirming the feasibility of integrating high shares of renewable energy. The work further highlights Indonesia's unique potential to harness solar energy and battery storage to address daily energy variations.
India
Following their Indonesia visit, Adair and Rose continued on to India, beginning in New Delhi where they were hosted by ETC partners TERI (The Energy Research Institute). During this stop they attended the World Sustainable Development Summit (WSDS) organised by TERI, with Adair speaking on Leadership Panel: Addressing the Energy Trilemma in a Resource Constraint World. With Adair and Rose having planned to be in Delhi for the WSDS, they took advantage of their time there by meeting with government officials Bhupinder Singh Bhalla, Secretary of the Ministry of New and Renewable Energy (MNRE), and Shri Pankaj Agarwal, Secretary of the Ministry of Power. This was a unique opportunity to unpack and define the government’s view on the energy transition in India. India is a crucial country for the global energy transition, as it is expected to become one of the largest power producers in the world, and a major player in the renewable energy technology sector. The amount and diversity of work being done around the energy transition in India has increased tremendously in the last five years. Meetings such as these are extremely useful to the ETC. Understanding the breadth and depth of this work will allow us to identify potential areas of collaboration and further our impact on the journey to net-zero.
It’s in the Charts
This section highlights key graphs from our analysis, outlining the ETC’s positioning on key sustainability topics. Our charts are one of the many ways our thought leadership shapes debate around the complex subject of the energy transition.The chart below can be found in our report,?Material and Resource Requirements for the Energy Transition.
Which raw materials are most used in clean energy technology?
The availability of raw materials crucial for the energy transition hinges on two key factors: the cumulative demand over the transition period and the annual demand versus potential supply.
Materials like copper, steel, nickel, and aluminium are in high demand across various clean energy technologies, driven not only by the transition but also by other industrial and consumer uses.
Conversely, materials like lithium and polysilicon are more specific to certain clean energy technologies, such as batteries and solar panels, with the transition being the primary driver of demand.
This chart, from our Material and Resource Requirements for the Energy Transition report, maps the relative importance of key raw materials in clean energy technologies and their other uses.
Meet the Team
Get to know us! Each issue we sit down with a core team member and chat about their work and objectives; their views on mitigating climate change, and their inside perspectives on the ETC’s workstreams and analysis. Today we introduce?Hugo Liabeuf, Senior Energy Insights Analyst?at the ETC.?Hugo was the lead author of the ETC’s latest report, Fossil Fuels in Transition. Hugo also largely contributed to the CCUS: Vital but Limited?report and Building Energy Security Insights Briefing, published in response to Russia’s invasion of Ukraine and the gas crisis. He is currently leading the ETC’s work on Nationally Determined Contributions.
What has been your proudest achievement to date at the ETC??
Definitely the Fossil Fuels in Transition report - I'm particularly proud of it for two main reasons:
First, because it has been a sort of “first-of-a-kind” project for the ETC, focusing on the phase-down of the existing energy system rather than the growth of the new, acknowledging not every market will emerge as a winner in the transition. In discussions with our broad membership, an invaluable variety of points of view which really helped us shape the insights of our work – this is truly the ETC’s distinctive feature. I am convinced this report really helped us engage in this complex debate and helped us land some important messages at COP28.
Second, given the tricky nature of the topic and the tight timelines, this report has truly been an ETC-wide effort, involving most, if not all, the Analytical team, but also our entire Regional, Communications and PMO teams. It was truly inspiring to witness such a wide pool of talent and skills we have as a team, without which, it would have not been such a successful report.?
What are you most excited about that's coming up at the ETC? ?
I would need to say our work on energy productivity. It's a very broad and complex topic and is often overlooked given it’s neither high-tech nor clearly visible to customers. But it is a huge piece of the puzzle to net-zero. Energy efficiency is supposedly a “no brainer” – it’s very cheap, low-tech, there are many opportunities for improvement, and it is crucial for the transition. Yet we are not doing it at any sort of scale required to meet climate objectives – that’s a bit odd right? Countries have also committed to doubling energy efficiency by 2030 - I am not sure that the implications are understood, or people have plans to achieve that objective.? I think the ETC has a crucial role to play in this paradox, with its strong ability to cut through the complexity of issues and build compelling stories around what can and must happen. Very much looking forward to the outputs of that work!
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