In his role as vice president of energy transition at Forum Energy Technology, Ivo Bozukov is responsible for identifying development paths for technologies to enable the organisation’s customers to achieve maximum positive environmental impact. Ivaylo Bozoukov is a seasoned entrepreneur and business leader, having founded his own company, TrakiaBioProduct. He takes a special interest in businesses and technologies created to achieve a positive environmental impact.
This article will look at the energy transition and how people, businesses and governments all over the world are coming under mounting pressure to make the shift from fossil fuel-based energy to renewable sources like solar and wind power.
With renewable energy accounting for an ever-increasing proportion of the energy supply mix, improvements in energy storage and electrification are key drivers of the global energy transition.
Global commitment to decarbonisation polices and regulations has been mixed. Nevertheless, the energy transition is predicted to continue to gain traction as investors increasingly prioritise environmental, social and governance factors.
Todays investors and companies seek greater transparency and confidence in accounting for long-term climate opportunities and risks. Forward-looking businesses are adapting in accordance with the energy transition, falling in line with global transformation in the energy sector and moving away from fossil fuel-based modes of energy production to renewable energy sources. Making the switch from non-renewable sources of energy like coal, oil and natural gas to sustainable sources has been made possible by technological advancements. The transition is further driven by a social push towards sustainability.
Spurred on by permanent structural changes to energy prices, demand and supply, in addition to easing the burden on natural resources like coal, oil and gas, the energy transition also aims to reduce greenhouse gas emissions through various means of decarbonisation.
After years of dependency on regulations to promote growth in the industry, renewable energy sources have finally become a powerful and cost-effective electricity source. The cost of both wind and solar power have fallen drastically globally in recent years, so much so that in some regions of the US, UK and Europe today, wind power is actually cheaper than traditional high-carbon electricity sources. As costs continue to decline and solar and wind power become increasingly mainstream, experts predict exponential growth in the renewable energy industry, solidifying its reputation as a strong investment opportunity.
The International Energy Agency predicts that between 2019 and 2024, the world’s total renewable-based energy capacity will increase by 50%. In response to this shift, utilities are rapidly transitioning away from coal-based energy sources. Although some market observers anticipate that this trend will slow, there is mounting pressure on power companies to retire existing assets that are dependent on coal supplies, investing instead in renewable forms of power generation. In addition, many oil companies are increasingly diversifying and investing in renewable, low-carbon energy sources in response to ever-increasing concerns over climate change, a movement that experts predict will continue to gain momentum.
The energy transition paves the way for a variety of different benefits, not only in terms of the climate but also the economy and society as a whole. For example, digitisation of electricity grids paves the way for a new age of smart grids, facilitating the provision of new services for consumers. From an environmental point of view, renewable energy sources reduce pollution, while coal-fired power plants can be repurposed, culminating in a circular economy that creates new jobs while protecting the environment.
Although in the United States federal subsidies for solar and wind energy are set to expire, demand for renewable energy is predicted to remain high, driven primarily by large-scale renewable energy purchases by corporations. Indeed, the corporate renewables market is tipped to see continued growth, with demand already secured through initiatives like the RE100 coalition, which encourages large companies to commit to sourcing 100% of their energy from renewable sources. In addition, there is also the Renewable Energy Buyer’s Alliance, which was launched by more than 300 companies, including General Motors Co., Walmart Inc., Facebook Inc. and Google LLC.
There is undeniable evidence that the planet is heating up. Evidence from NASA indicates that in 2020, the earth’s average temperature was 1.02°C hotter than baseline 1950 to 1980 mean temperatures. In addition to melting the polar ice caps and resulting sea level rises, climate change is also causing other severe ecological impacts, including flooding and fires, hurricanes and desertification. The global scientific community is in virtually unanimous agreement that unless urgent action is taken, the environmental consequences will be dire.
At COP21 in Paris, the international community entered into a treaty designed to keep global warming within a maximum of 2°C higher than pre-industrial levels and ideally below 1.5°C. In terms of achieving this goal the energy transition will play a vital role, helping people, businesses, communities and entire countries to move away from fossil fuels and embrace renewable energy sources in order to drive down greenhouse gas emissions and mitigate the worst impacts of climate change.
