A delayed transition might necessitate carbon seize and removing applied sciences taking over a outstanding function.
That is in response to the evaluation, titled ‘A Delayed Energy Transition’, from Wood Mackenziean power analysis and consultancy agency, exploring the implications if the world experiences a five-year delay in transitioning to renewable power sources.
Within the occasion of a delayed power transition, the evaluation predicts a substantial lower in annual common spending on decarbonisation efforts, plummeting to $1.7trn. This represents a 55% discount in comparison with the expenditure outlined within the report’s net-zero 2050 situation, which is in align with the Paris Settlement targets of 1.5C to 2C.
The evaluation additional highlights the overall funding required might attain as much as simply $48trn. This determine is considerably decrease than the projected $75trn funding outlined within the net-zero situation.
The report additionally delineates how completely different sectors could be impacted by a delayed transition. On this situation, spending within the oil and fuel sector would rise to 31%, whereas funding in energy sectors is predicted to stagnate at 60%.
Moreover, spending in essential areas like hydrogen and carbon seize, utilisation and storage (CCUS) would drop to 2%, down from 8% within the net-zero situation.
Report writer Prakash Sharma stated: “With half of the worldwide inhabitants heading to polls in 2024, political realities and local weather scepticism within the main emitting international locations, such because the US and Europe, might cut back the assist for the transition as voters search financial safety and worth stability.
“The worldwide stocktake at COP28 in December 2023 additionally confirmed that no main nation was on monitor to satisfy the Paris-aligned commitments and that robust coverage motion and capital funding have been essential to speed up the transition.
“Indeed, Europe and the UK have already pushed back 2030 climate goals and other countries may follow suit.”
Urgency of motion: Bottlenecks to the transition
The evaluation underscores the pressing want for accelerated motion, as emissions are anticipated to peak in 2032, doubtlessly exhausting the remaining carbon price range for a 1.5C world by 2027, and posing vital challenges for international locations striving to satisfy the Paris Settlement objectives by 2050.
The report additionally highlights obstacles hindering the transition to renewables-led electrification. These embrace transmission bottlenecks that impede near-term additions of photo voltaic and wind energy, whereas unabated thermal provide continues to dominate versatile era to steadiness energy grids.
Moreover, the analysis identifies increased rates of interest and provide chain bottlenecks as elements contributing to elevated renewables prices by 10% to twenty% lately. Consequently, the fee decline of low-carbon hydrogen is predicted to be delayed, with demand forecasted to be almost 50% decrease than the bottom case in 2050.
The findings point out {that a} delayed transition might necessitate carbon capture and removal technologies taking over a outstanding function in rebalancing carbon ranges and reaching long-term local weather objectives.
UK to grant extra oil and fuel exploration licenses
Whereas the report underscores the necessity to expedite the power transition, the UK Authorities is poised to authorise fossil gasoline corporations to conduct exploration for oil and gas beneath offshore wind energy websites.
The North Sea Transition Authority (NSTA), tasked with overseeing North Sea oil and fuel operations, has revealed plans to grant licenses to round 30 corporations for hydrocarbon exploration inside zones earmarked for future offshore wind farms.
The NSTA stated: “The North Sea is a crucial useful resource for power safety and net-zero supply, so it’s very important that sectors collaborate to make sure these techniques can co-exist.
“Following discussions with our companions, we’ve got launched a brand new clause for overlapping oil and fuel licenses and wind leases for the primary time.
“This will be the main commercial mechanism for these licences to resolve spatial overlaps and to support co-existence of these important industries.”
The transfer has sparked discontentment throughout the environmental sector, with organisations urging the Authorities to prioritise the power transition.
RenewableUK’s chief government Dan McGrail stated: “While we welcome the efforts of the NSTA to work collectively on reforming the foundations governing oil and fuel co-location with offshore wind farms, we want a lot larger prioritisation of renewables over oil and fuel in spatial planning.
“Prioritising offshore wind over oil and gas isn’t just the right choice for the planet, but given renewables are the lowest cost means of generating power, we should be doing this for billpayers.”
