Ammon News – BY SULTAN AL JABER
The record growth of renewables, accounting for more than 80% of all new power generation capacity last year, is the clearest sign that the energy transition is accelerating. But recent events have shown that unplugging the current energy system before we have built a sufficiently robust alternative jeopardizes economic and climate progress – and calls into question our ability to ensure a just and equitable transition for all.
A successful energy transition must be built on joint progress for the economy and the climate. It must be based on scientific, economic and technical facts, appreciate multiple dilemmas and difficult trade-offs, and accelerate the deployment of practical solutions. And for that, we need an inclusive approach that draws on the experience of all sectors of society and, above all, does not exclude the energy sector.
The world was already facing a deep energy supply crisis as economies began to rebound from the COVID-19 pandemic. The Russian-Ukrainian conflict then made a tight market even tighter and forced countries to reassess their urgent short-term strategic energy needs. The message to governments must therefore be clear: policies aimed at disengaging from hydrocarbons too soon, without adequate viable alternatives, are doomed to failure. They will compromise energy security, erode economic stability and leave less income available to invest in the energy transition.
What is needed is a realistic, practical, growth-friendly and climate-friendly new strategy. Strategy must appreciate the complexity of energy and industrial systems, and that the scale of the transition required is colossal, requiring greater alignment and collaboration on everything from capital allocation to product design, through public policy and behavior change. This means first looking at the demand side of the energy system. Wind and solar power are making great strides, but most energy is used in heavy industry, manufacturing, construction, transportation, and agriculture. These hardest-to-reduce sectors have the greatest effect on the climate and therefore require more investment, now.
While investments in renewable energy globally exceeded $365 billion last year, combined investments in energy storage, carbon capture and the hydrogen value chain do not were only $12 billion. It’s not enough. It is estimated that the energy transition will require more than $250 trillion in investments over the next 30 years. Of course, no country, let alone a single company, can pay this bill.
But funding is not the only problem. Energy transitions take time. While wind and solar accounted for the vast majority of all new electricity generation capacity in 2021, they still represent only 4% of the current energy mix. As global energy needs grow ever larger, maintaining global energy security will require oil and gas to remain an important part of the mix for decades to come.
That’s why we need to do more now to reduce the impact of oil and gas on the climate. Producers, governments and the private sector must work together to ensure that each new production unit is less carbon intensive than the previous one. This will require supportive fiscal policies through tax incentives, operational efficiency through technology, greater commitments to reduce methane and flaring, and significantly greater investment in carbon capture technologies.
These realities guide the UAE’s approach to energy transition, which is to continue to meet global needs today while investing in the new energy systems of tomorrow. The United Arab Emirates has three of the largest single-site solar power plants in the world, has invested in renewable energy projects in more than 40 developed and developing countries and plans to increase its renewable energy portfolio to 100 gigawatts of power. ‘by 2030. We have also invested in nuclear energy and are laying the foundations of the hydrogen value chain, which is essential to achieving net zero emissions.
Although the UAE remains a reliable supplier of some of the world’s low-carbon oil and gas, we will reduce its intensity by another 25% before the end of this decade. And, as the first country in the Middle East and North Africa to announce a Net Zero 2050 strategic initiative, we are decarbonizing our economy sector by sector. We have implemented the first industrial-scale carbon capture program in the region, and all the electricity consumed by our national oil company now comes from zero-carbon nuclear and solar power.
As we approach this year’s United Nations Climate Change Conference (COP27) and as the United Arab Emirates prepares to host COP28 in 2023, we must focus on practical solutions that will help solve the trilemma. securing an accessible, affordable and sustainable energy supply. If the COP process is to deliver on the promises of the Paris Agreement, we need an inclusive dialogue on the framework for a realistic energy transition. This dialogue should bring everyone around the table, from governments and civil society to scientists and the private sector. It must include professionals from across the energy sector, because a rational discussion of the practicalities of an energy transition that reduces emissions without impeding economic progress is not possible otherwise.
But let’s not wait to start this conversation. If we are to deliver on the promises of the Paris Agreement, we must deliver climate and economic results now. Our ultimate goal should be to contain emissions, not progress.
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