Global Energy Transition: Blurred energy nirvana: The world is fast turning green

Source: The post is based on the article “Blurred energy nirvana: The world is fast turning green” published in the Business Standard on 4^th November 2022.

Syllabus: GS 3 – Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Relevance: About the Global Energy Transition to renewables.

News: Coal energy is getting increased, but renewable energy is growing rapidly.

What is the present trend of Global Energy Transition?

Few regions are expanding their coal power plants. For instance, a) Europe is extending the life of its coal plants, b) India is expanding coal production.

On the other hand, a few regions are expanding their renewable energy. For instance, South Africa and Indonesia have just secured $1 billion from the climate investment funds to prematurely retire coal plants to transition to renewables.

Solar energy: As much as 250 gigawatts of new solar capacity is projected to come online this year. This is 38% higher than in 2021. The top five markets would be China, the US, India, Brazil and Germany.

Solar installations far outpace wind because combined with batteries, Solar power factories provide a compelling choice to households, businesses and utilities.

Wind energy: A record 106 gigawatts of wind will be installed globally this year, with cumulative installations surpassing 1,000 gigawatts next year. Offshore wind represents 13% of total installations in 2022.

Increase in Corporate power purchase deals: a) Alphabet’s Google signed its largest solar deal agreeing to buy 942 megawatts to eliminate emissions from its operations, b) According to a private report, almost 22 gigawatts of corporate power purchase agreements have been signed globally, c) Corporate power purchase deals hit a record high in 2021, with more than 30 gigawatts procured.

Increase in EVs: BNEF’s latest update projects passenger EV sales at 10.6 million this year. India EV sales are also rising, but there is a skew towards two- and three-wheelers.

What are the challenges ahead in the Global Energy Transition?

a) Widening gap between energy transition asset finance in developed countries compared with emerging markets and developing economies (EM&DEs). For instance, while global energy transition asset finance hit a record $785 billion in 2021, EM&DEs saw only a fraction of that with $67 billion, the lowest share in 10 years. b) There is skewed finance among EM&DEs also. For instance, just handful of countries, such as India, Brazil and Vietnam have more finance allocation to green energy transition.

What will be the next phase of the Global Energy Transition?

Battery storage: Power from a battery is the next energy revolution. Storing solar, wind or other kinds of power for later use is becoming increasingly common. Battery technology is also evolving to lean more on metals that are easily acquired and at lower costs such as sodium-ion batteries.

Vehicle-to-grid or V2G technology: The growing number of electric vehicle (EV) batteries open another avenue for storing excess power for later use. Millions of EV batteries can be used to import or export power to the grid.

EV owners would get some revenue for participation, and grid operators would save on costly upgrades.