1. A lot of Investment: For the energy transition to succeed, the use of renewable energies must be massively increased worldwide. By 2050, the share of renewable energies in the United States needs to triple at the very least. The Asia-Pacific region will have to increase its share by four times to 10 times compared with 2020 – by comparison in Europe, we assume a three- to fourfold increase. Such gains can be achieved only if the framework conditions are right, regulatory barriers are lowered, and, in particular, access to enormous quantities of materials is guaranteed. After all, we know that the material intensity per installed kW is significantly higher compared with conventional technologies.
2. Effective Implementation: The need to carry out new grid infrastructure and renewable projects is greater than ever. Making this possible will require a ramp-up of resources, factories, and infrastructure. Since the volumes we are talking about are so huge, it will be necessary to set boundary conditions for energy projects as effectively as possible. It is not just about easier, faster, and more predictable permitting procedures but also more standardized equipment and concepts.
3. Innovation: 45% of all emissions savings in 2050 will come from technologies that have yet to reach the market. The question, therefore, is how do we make innovative technologies commercially viable in the energy market? Because energy projects have such a long life span, it is tough to implement technologies that, despite being innovative, haven’t been proven in the long term. An example of what can happen if innovation is pushed too fast and without a balanced risk and reward profile can currently be observed in the wind industry. It has made great technical progress in recent years, but the market remains flawed. This needs to be addressed so turbine suppliers can earn what they require in order to fund innovation. If we want innovation to thrive, we must define how a risk and reward profile can be distributed fairly.
4. Global Trade: There is no doubt that pushing for diversification of supply chains and technologies is the right approach. However, we should not fool ourselves. Diversification comes at a cost and requires time. While diversifying, we also need to ensure that we keep global trade open and viable. Everything that slows the implementation of energy technologies will also slow the fight against climate change.
To conclude, while the challenges facing COP28 cannot be underestimated, neither can the vast opportunity of solving its problems if done right. COP28 will bring together a diverse set of stakeholders – we should not miss the opportunity for all of them to leave as climate change leaders.
I would be interested to hear your take on the matter – let me know in the comments section of the LinkedIn Article: https://tinyurl.com/4xm45b5y