IRENA defines the Energy Transition as the “pathway toward transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century”.
“Absent decarbonization shock treatment, humans will be wedded to petroleum and other fossil fuels for longer than they would like”
On December 12th, 2015, the Paris Agreement was signed. The topic is climate change. In this paper is stated that the 196 nations involved in this agreement are going to support one another from the financial, technological and of building capability point of view. The goal is to limit the global warming to a maximum level of 2 Celsius degrees indeed, preferably of 1,5 Celsius degrees. The whole plan is based on five-years cycles.
The reason why this agglomerate of nations decided to sign this agreement is to have the chance to stop or at least slow down this dangerous climate change.
The world is moving toward a continuous industrialization and evolution. This implies an increase in the energy demand to make everything possible. Thus, to keep in the meanwhile a good life quality, the research and the usage of renewable energy become extremely important.
Energy sources can be classified using many different criteria. The one we are focusing over here is about the source being renewable or not. A renewable source of energy has two main features, the first one is that is can be extracted without creating pollution and the second one is that it is unlimitedly available in the nature. We can consider sun, wind, geothermal, hydroelectric and biomass as renewable sources of energy. On the other hand, we have non-renewable sources of energy such as coal, oil, gas, hydro power, diesel power. These sources are exhaustible over time.
Nowadays, both wind power and solar power represent only the 5% of the total amount of energy used in the world. Nonetheless, the usage of these kind of energy is increasing year over year.
In the previous 40 years many forecasts about the possible scenarios have been conducted along renewable energy and decarbonization area.
To keep the Paris Agreement target due to 2030 alive, a cut of 45% in global emission is needed. The pandemic initially contributed positively to the cut. After the first deep, emissions rose sharply in 2021 though.
From the American side there is Biden that has chosen to allocate a huge amount of money to create the fourth energetic transaction. The plan consists of decreasing the greenhouse gases of a 50% in the next 10year, so due to 2030, with a quickness never seen before.
When we talk about renewables energy it is important to consider the materials employed to create the infrastructure needed to produce energy. E.g., the solar panels are going to create in the future a very high request of cobalt, copper, lithium, graphite, cadmium, and other rare materials. Furthermore, this is going to generate some toxic waste materials.
For this reason, many people think that basing everything on renewable energy is not the solution and is not green as it seems. Nonetheless, I believe the energy transition is necessary, more for a scarcity point of view.
This war displays its major impact over 5 categories of products. Energetic sector, food industry, transportations, metal, and microchips. In this article I want to focus on the energetic sector.
Most of the energetic reserves stored in Europe come from Russia. Mainly gas and oil. After the Russian invasion of Ukraine, the European Union and other countries around the world started to implement sanction against Russia. One of this sanction consists in the non-approval of the readiness of Nord Stream 2. The pipeline was ready to carry gas from Russia to Germany, the only step missing was the technical approval, now denied.
Since non-renewables sources are subject to scarcity, there could be a huge problem from small triggers.
During the beginning of the pandemic in 2020, oil price dropped drastically due to the travel ban. This creates less demand in oil and consequentially also oil price decreased. OPEC countries coordinated with Russia and Mexico creating OPEC+. They decided to cut dramatically the number of oil barrels both produced and stored. The cut was of 9,7M barrel/day in May and June 2020. This allowed the oil price to go back to the long-term average.
This price surge could be catalyst for the energy transition. But, at the same time there are different opinions about the topic.
Russia invasion of Ukraine generated both a shift toward more independence using clean energy and a possible longer lifespan for fossil fuel in the global energy mix.
Robert Habeck, German Vice-Chancellor, expressed his opinion about how both these sanctions towards Russia and the lack of fossil fuels from this country due to the war, could make the green transition even faster.
There are analysts that believe that an increase in the price of these raw materials could lead to a better awareness among the consumers, and this may lead to larger and more frequent investments and purchases classified as “sustainable”.
On the other hand, such an increase in the oil price could generate, among the oil producer companies, even a bigger interest on the matter of the extraction. Such a situation would lead to an abundancy of oil and, therefore, to a decrease in the price. Furthermore, many countries are trying to get fossil fuels from other areas such as the Gulf. This “fossil fuel run” should be stopped to avoid the worst outcome on the energy transition from this invasion.
Furthermore, is important to point out that this situation could trigger an interest for nuclear energy.