Energy Transition investments

High-voltage electricity transmission lines and poles.
Photo taken by Filipa Ferreira

Global investments in energy transition increased by 9%, reaching over $500 billion in 2020. Although investments in Renewable energy grew by 2% from 2019 levels, the surge stemmed from investments that will enable Electric vehicles to be used in the near future. A record year for EV investments with an 28% surge, as BNEF points out in its Energy Transition Investments Report.

Renewable investments continue to be made in the infinite natural resources of solar irradiation and wind. Investments in Biomass have decreased, showing a better alignment with the Paris Agreement goals and the need to invest in assets that limit global warming to 1.5ºC by 2030.

On the corporate sector, organisations have been also actively taking part in the energy transition, as illustrated in the graphic below, collected by Statista from BNEF data. As it can be observed, signing Paris Agreement has been key in this transition. In 2017 corporate PPA investments surged by 44%, in 2018 by 119% and 2019 by 43%. Geographically, the USA has been leading on corporate PPA’s investments.

Global Corporate PPAs historic investments from 2008 to 2019
Source: Statista and BNEF

Despite all clean energy investments made so far, more are still needed to ensure demand is met by cleaner sources. In 2020, OECD still generated 54.7% of electricity from fossil fuels, data from IEA shows. Renewable generation only grew by 4%. Only OECD data is revealed as at the moment, data from the rest of the world isn’t available.

Economic activity can take its normal course uninterruptedly, if the energy network that sustains it is reliable. Currently, reliability to ensure that security of supply is still an issue, as neither sun nor wind are continuously available or when consumers mostly need it. For example, electricity storage investments in 2020 remained unchanged from 2019, as per BNEF’s report. If there’s capacity to produce but no capacity to store when its cost is lower, an opportunity may be wasted.

To reduce that waste and help balancing the electricity system, options are available. At industrial level, demand response is widely available and G2V-V2G is emerging along with renewable energy installations for self-consumption, as the above graphic shows. On the domestic side, consumers are increasingly installing energy-efficient appliances. BNEF indicates a 12% increase in 2020. Prosumers are also on the rise. But to optimise energy assets, either big or small, professionals will be needed.

International Forest Day

To celebrate the International Forest Day, under the international theme “Forest Restoration, a path to recovery and wellbeing”, the Portuguese Government has decided to offer about 50,000 trees to be planted at citizens and NfP premises. So I’ve decided to do some research and calculate the approximate carbon sequestration those trees offered would have. Do you want to know? Listen to this podcast episode…

Net-Zero

The Paris Agreement states that the signatory parties, in recognition of peaking GHG emissions and its contribution to Global warming, should set decarbonisation targets so a “balance between anthropogenic emissions by source and removals by sinks on greenhouse gases” can be reached by the second half of the XXI century.

Carbon capture and storage isn’t commercially developed yet, meaning there isn’t enough capacity created to store the released atmospheric carbon, not to speak about the rest of the GHG. May it be because not enough R&D has been undertaken to understand the cost-efficient technologies to do so. Or studies may be inconclusive regarding the environmental impact of high concentrations of stored GHG emissions in the geological, hence, existent natural sinks.

A balance can be better achieved if emitted GHG are reduced, increasing the abated ones. Energy efficiency is thus imperative, and so is operational efficiency. Efficiency implies improvements in the resources’ usage in comparison to previous operative processes. If less resources are used, then less energy may be needed to achieve the same previous result. It also means less usage of other resources. Given the finite status of many resources, being efficient is paramount. Aren’t you happy when you achieve something with less effort? So is our Planet!

How can your organization achieve Net-Zero targets? Well, to deliberately achieve something you need to depart from a level of awareness. What cannot be identified cannot be consciously improved! If the process of achieving your Net-Zero targets is longer than other organisations, due to higher complexity of your manufacturing process and the corresponding value chain, you can start by setting Carbon Neutral targets to be achieved in the short-term, aiming at achieving Net-Zero at a later moment, but working towards them already. So, your Carbon Neutral goals should be focused to reach Net-Zero.

Figure 1 - A roadmap to Net-Zero. A circular graphical representation with different colours representing the phases and achievments to the end goal, Net-Zero GHG emissions.

Neutralization contributes much more than compensation in limiting Global Warming to the 1.5C. Figure 1, above, illustrates a high-level roadmap to Net-Zero. Starting by knowing your operations, processes, products or services and the value chain is key to determine what GHG emissions need to be known and understand where should be reduced. What can be measured can be improved, right? By knowing your GHG emissions level for scope 1, 2, in addition to 3, for a complete decarbonisation, you can set the base year. Knowing how they can be reduced and the pace allows you to measure the reduction impact and the timeframe. Consequently, the target year, by when Net-Zero should be attained, can be set. Announcing the commitment is important. Your stakeholders will be happy to know the organisation is moving in the right direction, as any good friend is happy for you when you’ve achieved a better stage in your life. Having the right people and tools for implementation is key for the success of this target. You may want people who are purpose driven, those who understand why is important to achieve so at a faster and balanced pace.