What is the energy transition?

You might often hear the word energy transition nowadays. but do you know, “What is the Energy Transition?” This article will give you an idea about the energy transition and how the world is adopting this concept

What is Energy Transition?

The shifting from using fossil fuels (coal, oil, and natural gas) as the primary sources of energy towards utilizing renewable and more sustainable sources of energy. The transition aims to address various challenges associated with the current energy system, such as climate change, air pollution, resource depletion, and energy security concerns. Environmental, Social, and Governance (ESG) is something that is more prioritized by the investors and the Energy Transition will play a crucial role in getting a good ESG rating.

The key aspects of the energy transition are as follows:

1. Renewable Energy: The use of renewable energy sources such as solar, wind, hydroelectric, geothermal, and biomass is to be increased as these sources generate electricity without emitting greenhouse gases, offering a cleaner and more sustainable alternative to fossil fuels.  As per the IEA report, Solar PV generation increased by a record 179 TWh (up 22%) in 2021 to exceed 1 000 TWh. Solar is the second-largest absolute generation growth amongst all renewable technologies in 2021, after wind. Solar PV is becoming the lowest-cost option for new electricity generation in most of the world, which is expected to propel investment in the coming years. However, average annual generation growth of 25% in the period 2022-2030 is needed to follow the Net Zero Emissions by 2050 Scenario.

The amount of electricity generated by wind increased by almost 273 TWh in 2021 (up 17%), 55% higher growth than that achieved in 2020 and the largest of all power generation technologies. Wind remains the leading non-hydro renewable technology, generating 1 870 TWh in 2021, almost as much as all the others combined.  The trends of renewable additions in subsequent years are given in the graph below:-

 

 

1. Decentralization: Energy transition often involves decentralizing energy production. Instead of relying solely on large, centralized power plants, there is a push towards distributed energy generation, where smaller-scale renewable energy installations are integrated into local communities. Decentralization is a new opportunity and most countries are adopting this methodology to improve their power systems. the core component of decentralization is the embedded generation of energy or you can say onsite generation of the energy. Similarly, the demand response is another tool that aids in the decentralization of energy.  https://youtu.be/LpD51e5mqm8
2. Energy Efficiency: Energy transition emphasizes the importance of using energy more efficiently. Improving energy efficiency in industries, buildings, transportation, and appliances can reduce overall energy demand and greenhouse gas emissions. Energy efficiency tells us about the better use of energy as per the optimum equipment capacity. This is a very fast method to improve the energy transition. There are lots of startups and companies that are working towards energy efficiency. they are making particular facilities or particular equipment like Chiller, Boilers, etc to improve the output and reduce the input and this subsequently leads to overall energy savings. These companies are working on ESCO Model as well as the CAPEX Model.
3. Electrification of Transport: Transitioning from fossil fuel-powered vehicles to electric vehicles (EVs) is a crucial element of the energy transition. Electric transportation reduces dependency on oil and lowers emissions. You may also read this article: 2 wheeler electrification
4. Energy Storage: With the intermittent nature of some renewable energy sources (e.g., solar and wind), effective energy storage solutions are essential. Advancements in battery technology and other storage methods are critical to ensuring a stable energy supply
5. Policy and Regulation: Government policies and regulations play a significant role in facilitating the energy transition. Subsidies, incentives, carbon pricing, and emission reduction targets can promote the adoption of renewable energy technologies. You may also read Electric mobility transformation in India
6. Social and Economic Impacts: Energy transition can lead to significant changes in job markets, economic structures, and societal well-being. Addressing these impacts and ensuring a just transition for affected communities is vital.

7. Innovation and Investment in Energy Transition

   : Encouraging investment in renewable energy projects and supporting technological innovations are essential for accelerating the energy transition.The energy transition is driven by the recognition of the need to combat climate change and its associated environmental, social, and economic consequences. By shifting to cleaner and more sustainable energy sources, the world can reduce greenhouse gas emissions, mitigate climate change impacts, and create a more resilient energy system for the future.