This image shows a coastal wind turbine in the Netherlands.
Mischa Keijser | Image Source | Getty Images
The discussion of energy transfers, what it means and whether it is actually going on at all, has become a major point of discussion in recent years.
How the transformation – which could be seen as a transition from fossil fuels to a renewable system – remains to be seen.
It depends on many factors, from technology and finance to international cooperation. Importantly though, everyone is overwhelmed by a lot of uncertainty and risk.
The above issues were considered in detail during a panel chaired by CNBC’s Dan Murphy at the Atlantic Council’s Global Energy Forum in Dubai on Tuesday.
“Digitalization is at the heart of the transformation of energy,” said Leo Simonovich, vice president of Siemens Energy and global head of industrial cyber and digital security.
“In the energy sector, 2 billion devices are going to be added in the next few years,” he said.
“Each of these devices could be a potential source of vulnerability that could be exploited by bad actors.”
Extending his statement, Simonovich explained the possible consequences of the above incident. “In a system that is increasingly connected and digitized, including legacy assets in need of digital resources, this could have a cascading effect,” he said.
“And what we’re talking about is not just data loss, what we’re really talking about is a security issue that could bring down major parts of the grid or, as we’ve seen with the United States colonial pipeline attack. State, part. [the] Gas network. “
Cybersecurity, Simonovich argued, “was both important as an opportunity to accelerate the transfer of energy if we could get it right because it builds confidence, but as a major source of risk that we need to address very urgently.”
In addition to cyber security, geopolitics will also play a role if the planet is to be transformed into a low-carbon power system, a point coined by Abdur Rahman Khalidi, chief technology officer at GE Gas Power, EMEA.
“It took the world several decades to reach a consensus in Paris, until 2015, that global warming is happening and that it is because of greenhouse gases and promises are starting to flow,” Khalidi said. “It simply came to our notice then.
Khalidi’s reference to Paris refers to the Paris Agreement, which aims to limit global warming “below 2, especially 1.5 degrees Celsius, compared to pre-industrial levels” and was adopted in December 2015.
“For decarbonization to happen – as we saw in COP26 – you need … a collaborative and collaborative world government,” he said. “I see that risk right now [is that] The world is sharply polarized and the world is being divided into ‘with’ and ‘against’. “
Khalidi’s remarks come at a time when Russia’s aggression in Ukraine has highlighted the extent to which some economies depend on Russian oil and gas.
Although the war in Ukraine has created geopolitical tensions and divisions, it has also resulted in a number of initiatives defined by the purpose of cooperation and sharing.
Last week, for example, the United States and the European Commission issued a statement on energy security announcing the formation of a joint task force on the issue.
The parties said the United States would “try to ensure” at least 15 billion cubic meters of excess liquefied natural gas for the European Union this year. It is expected to grow further in the future.
President Joe Biden said the United States and the EU would “work together to take specific measures to reduce dependence on natural gas – the duration – and most importantly the availability and use of renewable energy.”
Considering that fossil fuels play such a major role in modern life, any change in the economy and economy centered on renewable and low-carbon technologies would require a lot of money.
During Tuesday’s panel, the question of where this cash should be invested was addressed by Cara Mangone, who is the global head of climate strategy at Goldman Sachs. Among other things, he emphasized the importance of integration and commercial effectiveness.
“Our research estimates that it is going to take anywhere from 100 to 150 trillion [dollars] In the capital, about 3 to 5 trillion a year – just an astronomical amount, we are nowhere near that today – to meet the targets set in the Paris Agreement, “he said.
About half of this capital needs to be renewable and focus on technologies that were already on a commercial scale, Mangon explained.
“But the other half, very importantly, has to go into carbon capture, hydrogen, direct air capture, sustainable aircraft fuel, e-fuels – technologies that are not yet being adopted on a commercial scale because they haven’t hit. Price point is where it happens for many companies.” Can. “
The trillion-dollar figures cited by Mangon are found in a report entitled “Climate Finance Markets and the Real Economy” published in late 2020. Goldman Sachs says it has joined the Global Financial Markets Association’s Climate Finance Working Group to help with the report.
Mangon went on to explain how the goals could be achieved in a commercially effective way.
“We can’t get funding from the oil and gas sector, metals and mines, real estate, agriculture – the sectors that are really important for transition, that really need capital, that need support to be able to operate.”
Anna Spitzberg, the US Department of State’s deputy assistant secretary of energy transformation, follows the above view from a comment made on Monday.
“We always came out and said [the] The oil and gas industry is important for change, “said Spitzberg, speaking during a panel hosted by CNBC’s Hadley Gamble.
“They’re the players in the power system, they’re the key players,” he said. “They’re going to push the reduction options, they’re going to push the hydrogen alternatives.”
“And to be quite honest, they are investing significantly in clean energy, including something renewable.”
If these “critical stakeholders” were not employed, Spitzberg argued, the goal of methane reduction and efficiency would not be achieved.
“The message is that oil and gas companies need to be part of the conversation. But we want them to be part of the conversion conversation as well.”
The work will be done
Securing a successful power transfer represents a huge task, especially when one considers the current state of the game. Fossil fuels are embedded in a global energy mix, and companies continue to discover and develop oil and gas fields in locations around the world.
Earlier this month, the International Energy Agency reported that energy-related carbon dioxide emissions in 2021 had reached their highest level in history. Global energy-related global CO2 emissions rose 6% to a record 36.3 billion metric tons in IEA 2021.
In its analysis, the world’s top energy authorities have identified coal use as the main driver behind the increase. It said coal was responsible for more than a 40% increase in global CO2 emissions last year, a record 15.3 billion metric tons.
“CO2 emissions from natural gas have reached 7.5 billion tons above their 2019 level,” the IEA said, adding that CO2 emissions from oil have reached 10.7 billion metric tons.