International Finance

Renewables key to achieving climate goals

Global climate summit at Glasgow concluded with a mutual agreement of approximately 200 nations to work together.

Just words won’t solve global warming. Perhaps, a rational execution-based structure with public-private partnerships would. Global climate summit at Glasgow, Scotland 2021 concluded with a mutual agreement of approximately 200 nations to work together for combating the global climate crisis. New pledges were taken up by leaders mainly on deforestation, coal financing and methane gas pollution, to name a few. Moreover, the US-China deal and carbon trading stirred the global media.

However, many climate activists, politicians and legal experts weren’t convinced much by the hoax promises and political gimmick. They believe the demand for a pragmatic execution approach to combat climate change is the need of the hour. Though the Covid-19 pandemic was a nightmare, it bestowed the urgent need for sustainability and renewables.

The ozone layer self-replenished the bizarre void, air quality index improved, and reduced carbon emissions which were all the indirect positive consequences of the Covid-19 lockdown in many countries. Nations took the oath unanimously to achieve net-zero carbon emissions in the imminent future. But mere words and pledges wouldn’t solve such a massive global crisis. It would need a higher degree of international collaborations, public-private partnerships, new policies, subsidizing and promoting electric vehicles, making EV infrastructure robust, and much more.

The year 2020 witnessed the instant surge of clean energy demand. The addition of 260 GW of renewable energy was 50 percent higher than the 2019 total renewable energy capacity. However, we are still behind the net-zero carbon targets, penetrating EVs into automobile markets and building a sustainable lifestyle.

For these, we need profound policies, new and better technologies, and the involvement of young entrepreneurs. Here are the rational and pragmatic actions to catalyse sustainable energy and the use of renewables by combating the global climate crisis.

Every year calls to cut global greenhouse gas emissions grow louder, yet emissions remain unsustainable. International climate targets demand emissions to peak as soon as possible and then quickly drop to net-zero levels by the second part of this century. The energy sector accounts for the great majority of global CO2 emissions, emphasizing the need for a greener energy system. The Covid-19 pandemic reduced global carbon dioxide emissions in 2020. However, without systemic reforms to the energy sector, this reduction will be only temporary.

The fast expansion of usage of wind energy, solar energy, and electric vehicles has demonstrated the ability of new clean energy sources to reduce emissions. Net-zero emissions will necessitate the deployment of these technologies on a much larger scale, in tandem with the development and widespread deployment of many other clean energy solutions currently in the early stages of development, such as numerous applications of hydrogen and carbon capture. The IEA’s Sustainable Development — a path for attaining international climate and energy targets — envisions the global energy system reaching net-zero emissions by 2070, integrating behavioural changes as well as a fundamental shift in energy system technology.

The research focuses mostly on the sustainable development scenario, but it also contains a parallel Faster Innovation Case that investigates the technological implications of attaining worldwide net-zero emissions by 2050. The report tries to analyze the obstacles and possibilities involved with a quick transition to clean energy. The paper examines all aspects of the energy system – from fuel conversion and power generation to aviation and steel manufacturing. It also includes all forms of renewable energy such as hydro energy, solar energy and wind energy.

Role of government to reduce carbon emission
Some countries have already enacted or proposed net-zero laws, while others are debating their net-zero initiatives. Many businesses have also declared carbon-neutral goals. Governments and corporations can be encouraged by the success of renewable energy technology. However, meeting these objectives will necessitate a far greater focus on the transportation, industrial, and construction sectors, which now account for more than 55 percent of CO2 emissions from the energy system.

Governments have a disproportionate role to play in facilitating transitions to net-zero emissions. Long-term aspirations must be supported by thorough clean energy programmes that include actions suited to local infrastructure and technological requirements. Policy toolkits need to be implemented to catalyse the reduction of carbon emissions.

Taking action to reduce emissions from existing assets would be highly beneficial. If the government tries to enhance markets for innovations in their early stages of adoption, that would help innovators to deliver products faster. Creating and improving infrastructure would allow the deployment of technologies at the earliest. Furthermore, increasing funding for research, development, and demonstration would make the innovations impeccable and would lead to world-class products. This would lead to an increase in international technological collaboration as well.

Economic stimulus measures in response to the Covid-19 problem provide a critical chance to take immediate action that may improve the economy while also promoting clean energy and climate goals, including the five sectors listed above.

Effective government action is required to boost the early adoption of renewable energy technology. The aim is to incentivize their use in order to close the cost and performance gap with conventional technologies. They have a significant role to play in making this happen, maximising private capital contributions through proper laws and regulations, and ensuring that all linkages in clean energy technology value chains are handled. Solar photovoltaics (PV) and lithium-ion (Li-ion) batteries are two instances of how technological design has resulted in remarkable advancements.

How can the Government implement renewable technologies?
Clean energy technologies benefit from market-pull mechanisms. Stimulating demand for clean technology, goods, and services makes them more marketable. Market deployment increases economies of scale and learning-by-doing, which helps to enhance technical performance and lower costs. Depending on the complexity of the value chain and the value to consumers, among other variables, different technologies will necessitate different deployment incentive methods.

Following the market launch, R&D support will be maintained. Supporting a dynamic portfolio of competing concepts at various degrees of maturity for each priority area increases success prospects, as does favouring solutions with quick innovation potential. Historical data demonstrates that continued R&D is necessary even after commercialization to drive the creation of new designs and components, as well as to reduce costs and enhance performance. Diversity and competitiveness assist in accelerating growth while also leaving room for unforeseen occurrences.

Final electricity consumption doubles under the sustainable development scenario. This expansion is being driven by the usage of electricity to power automobiles, buses, and trucks, generate recycled metals and provide heat for industries, and supply the energy required for heating, cooking, and other appliances in houses.

According to the faster innovation case, electricity output in 2050 will be approximately 2.5 times more than it is today, necessitating a pace of development comparable to adding the whole US power industry every three years. Meanwhile, annual additions of renewable energy generation would need to be around four times the current record, which was set in 2019.

In addition to the increasing need for energy from various sectors of the economy, a significant amount of new generation is required for low-carbon hydrogen. In the Sustainable Development Scenario, the worldwide capacity of electrolyzers, which create hydrogen from water and energy, increases to 3300 GW from 0.2 GW. These electrolyzers would take twice the amount of power that the People’s Republic of China generates today to produce the low-carbon hydrogen required to achieve net-zero emissions. This hydrogen acts as a link between the power industry and businesses where direct usage of energy would be difficult.

Capturing CO2 emissions in order to utilize or store them sustainably (known as CCUS) is a critical technology for achieving net-zero emissions. CCUS is used in the Sustainable Development Scenario to produce synthetic low-carbon fuels and to remove CO2 from the atmosphere. It is also critical for manufacturing some of the low-carbon hydrogen required to achieve net-zero emissions, namely in areas with low-cost natural gas supplies and sufficient CO2 storage. Simultaneously, the usage of contemporary bioenergy triples from current levels. It is used to either directly replace fossil fuels (e.g., biofuels for transportation) or to indirectly offset emissions through its use in conjunction with CCUS.

The stability of today’s global energy system is largely supported by developed global markets in three primary fuels—coal, oil, and natural gas—which account for around 70 percent of worldwide energy consumption. In the Sustainable Development Scenario, electricity, hydrogen, synthetic fuels, and biofuels account for a similar amount of demand as fossil fuels do now.

Policies and innovations to deliver wind energy, solar energy efficiently to the masses is the need of the hour. It’s the only way we can make an imminent improvement in the use of sustainable energy to reduce greenhouse gas.

Biomass energy is the most versatile renewable energy on the list. It has the unique ability to be used as a fuel in solid, liquid, and gaseous forms. With the excessive use of biomass, we can curb the greenhouse gas caused by the consumption of fossil fuels.

The hydrogen solution is going to be the miracle solution to achieving climate goals.

Theoretically speaking, the major consequence of using hydrogen would help to store surplus renewable energy when the power grid cannot gulp more than its capacity. It could be the replacement of petrol, diesel in transportation, which constitutes the 3rd largest factor of climate change. It could act as a replacement of fossil fuels in fuel and chemical production as a nil carbon feedstock.

Heavy industry and transportation role in the reduction of carbon emission:
Energy efficiency, material efficiency, and avoided transportation demand (e.g., substituting walking or cycling for personal automobile trips) play key roles in decreasing emissions in long-distance transportation and heavy industries. Hydrogen and CCUS are responsible for almost half of all emissions reductions in the steel, cement, and chemical sector. The utilization of alternative fuels like hydrogen, synthetic fuels, and biofuels ranges between 55 and 80 percent in the trucking, shipping, and aviation sectors.

Reaching net-zero emissions will be dependent on how we manage the emission challenges posed by these industries’ long-term assets, many of which were recently developed in Asian economies and will be operational for decades. The circumstance emphasises the importance of hydrogen and CCUS technology. It will be vital to ensure that new clean energy technologies are ready in time for major investment choices. Strategically scheduled investments in heavy industries, for example, might help save around 40 percent of cumulative emissions from current infrastructure in these sectors.

The electric power sector decarbonizer contributes more to emission reductions. Electrification constitutes approximately 20 percent of cumulative savings relative to the Stated Policies Scenario in 2070, making it the greatest single contributor to CO2 abatement. The role of CCUS (Carbon Capture, Usage, and Storage ) would be vital because the function of CCUS evolves during the projection period. Initially, the emphasis is on decarbonizing existing assets in the power sector and heavy industries, but over time, the emphasis switches to carbon removal from the atmosphere, offsetting emissions in sectors where they are difficult to reduce. CCUS contributes the fourth-largest share of cumulative emission reductions in 2070, accounting for 15 percent of the total.

While sustainably generated bioenergy plays an essential role in reducing emissions in the short future in the Sustainable Development Scenario, such as in transportation, it also offers extra potential in other sections of the energy sector, such as industrial uses. Hydrogen with a low carbon footprint and synthetic fuels such as ammonia and synthetic hydrocarbon fuels can be used. The usage of these fuels will grow over time across many sectors and lead to a 6 percent reduction in emissions by 2070. These four technology families are crucial for decreasing emissions, particularly in sectors with difficult-to-lower emissions, such as manufacturing and long-distance transportation. However, the increasing awareness and accessibility to different technologies will help these industries implement those changes.

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