Presidents column: The energy transition is here…or soon, anyway

Tuesday, 24. April 2018

On 17-18 April Joanna Costello, the ISES Deputy Executive Secretary, and I attended the Berlin Energy Transition Dialogue (BETD) where there was much discussion about the status and future prospects of the Energy Transition (Energiewende). The ~2000 participants, representing over 90 countries, heard plenary speeches and forum discussions on topics that covered energy markets, carbon pricing, mobility, heating and cooling, investment strategies, and policies, among others. The BETD is a platform for bringing together an international public and private audience to discuss viable concepts for the ongoing transformation of the energy sector.

The opening ceremony featured ministers from the German government, followed by keynote speeches. Then Director-General Adnan Anin of the International Renewable Energy Agency (IRENA) discussed the 2050 Roadmap recently prepared by IRENA. The Roadmap shows that renewable energy deployment rates must be scaled up by a factor of 6 in order to achieve 2/3 renewable energy penetration by 2050. This will result in the “transition” becoming a “transformation”. Such a scale-up will result in a workforce of 29 million in the renewable energy sector.

The Director-General was followed by Dr. Fatih Birol, the Executive Director of the International Energy Agency (IEA), who focused his comments on the role of energy efficiency in the transition. He warned that, after a 3-year plateau, global carbon emissions are on the rise again, and the impetus for energy efficiency as a means to check this growth is becoming weaker. Approximately 68% of global energy consumption is not subject to efficiency standards, even though application of strict energy efficiency measures by itself can actually stabilize CO2 emissions without the need for new technologies.

A major event on the second day of the conference was the launch of the joint REN21-IRENA-IEA Study “Renewable Energy Policies in a Time of Transition”. The report, freely available on the REN21 website, provides a review of the status and recommendations for effective policies for the three major energy sectors: power, heating and cooling, and transport. In the power sector, presented by Diala Hawila (IRENA), tax incentives and reductions have traditionally been the policy of choice, although recently auctions have been used to a much greater extent (coming with record-breaking low prices). The success of any policy is very dependent on its design. Paolo Frankl (IEA) noted how the heating sector represents nearly 50% of all end-use energy consumption yet has far fewer policies than the power sector. To meet future solar heating needs, major policy classes for four end-use applications are required: 1) district heating and cooling, 2) competition with heavy natural gas use, 3) industrial and solar water heating, especially in emerging economies, and 4) clean cooking. Rana Abib, the new Executive Director of REN21, noted that transport represents 29% of final energy consumption, and nearly all of this (96%) is currently met by fossil fuels. Current transport policies mainly relate to biofuel usage, although this will change as more and more of the sector is electrified.

There were a number of good take-aways from the conference, many of which were captured in the final session on Integrated Energy Transitions, which included high-level speakers from around the world. The general sense is that we are at the tipping point of the transition, and it can be argued that once renewables reach 10% penetration overall, which will likely be by the year 2020, the transition to a zero-emission energy system will be upon us. But there will be significant challenges. For example, current global investments of fossil energy infrastructure total $25 Trillion, and stranded fossil energy assets already amount to $1.3 Trillion, which must be dealt with in the transition. Furthermore, innovation must continue, and policymakers will need to invest much more in “intelligent regulation” to speed up innovation. Innovation is an area in which ISES has a strong role, and an area in which we will continue to support and highlight at future events such as the BETD. In the end, the consensus of the BETD participants is that we will be well on our way to a zero-emission world by the middle of this century.

Just prior to the BETD Joanna and I participated in the REN21 Steering Committee meeting on 16 April to discuss REN21’s proposed 2019-2021 work plan. Last year the Executive Director, Christine Lins, announced her retirement. At the meeting, Rana Abib, who previously served at REN21 as a Research Coordinator, officially became the Executive Director. The meeting gave us all the opportunity to bid farewell to Christine and to wish her all the best for work in developing the Global Women’s Network for the Energy Transition, or GWNET. We also welcome Rana to her leadership role at REN21; we are looking forward to working with her.

As you can see in a related article in this newsletter, we are also very pleased to announce that Christine will now be joining the ISES Board of Directors.

I would like to close this column by making a special tribute to Prof. Karl W. Böer, who passed away at his home in Florida on 18 April. Karl was a true solar pioneer and played a very significant role with ISES throughout his career. In particular his “Solar Energy Medal of Merit” award is one of the official awards of ISES, and I have had the privilege to serve on the awards committee throughout my term as President of ISES. Karl was also the editor of the 2-volume “The Fifty-Year History of ISES”, published in 2005. You will find an article about Karl, prepared by the University of Delaware here.