This article is sponsored by Ørsted
“Without renewables, there can be no future.” One might think that’s the new tagline of a renewable energy company, but these are in fact words from António Guterres. Speaking at a Global Compact Board meeting during New York Climate Week in September, the UN Secretary-General described renewables as “the only credible path” to real energy security, stable energy prices and sustainable employment opportunities.
This year the related energy security and cost-of-living crises – with soaring inflation rates pushing 71 million people into poverty in developing countries and leading to financial struggle for a quarter of people in developed countries – have been front and center in national and global debates. And while the upcoming COP27 negotiations will need to address the urgent challenges around securing finance for emerging economies, climate adaptation, and loss and damage, these recent crises will also likely feature in conversations.
So, as world leaders meet in Sharm-el-Sheikh in a few days, I would urge them to focus their efforts on the long-term solutions to the root cause, the common denominator of these crises, and to address them together. I’m talking about the same common denominator that has increased the likelihood of extreme weather events such as the disastrous flooding that hit Pakistan and displaced 33 million people; the record-breaking heatwave that lasted more than two months in China; and hurricanes Fiona and Ian that wreaked havoc in parts of the Caribbean and North America that were still recovering from Maria, Ida, Harvey and too many others to name.
That common denominator: our global economy’s dangerous reliance on fossil fuels and slow transition to renewables. A reliance that leaves us exposed to extreme energy price volatility, even more so recently with the war in Ukraine waged by Russia – the world’s largest fossil fuel exporter in 2021. A reliance that leads to unabated climate change, exacerbating natural weather events, which in turn impact energy system resiliency and reliability. Not only is there a clear interplay between these crises, but climate change is also a threat multiplier.
Fortunately, we know how to address climate change. Multiple IPCC reports have made it abundantly clear over the past few years: We need to cut global greenhouse gas (GHG) emissions drastically and rapidly. And while the production and use of energy is responsible for 73 percent of global emissions, the solutions to decarbonize and transition from fossil fuels to a renewable energy future are within reach.
In a recent report, the International Renewable Energy Agency (IRENA) found that renewable energy remains cost-competitive — across onshore and offshore wind, and solar. It estimated that the renewable power added in 2021 saves around $55 billion from global energy generation costs in 2022. The transition to green energy is not only the single most credible path to energy security but also the path to clean, affordable and resilient energy, and to fair and equitable green jobs.
The solutions to decarbonize our global economy are within reach and yet there is still significant untapped potential for renewable energy. World leaders at COP27 can and should send a strong signal to accelerate the transition.
The need for speed to unlock green energy
The targets set in the Paris Agreement that global nations adopted in 2015 require that we halve global emissions by 2030. We are still very far behind that target, and we are already witnessing how fossil-fueled climate disasters are having ever more dire consequences on global ecosystems and human well-being. Every fraction of a degree matters, and we can’t afford to waste any more time. This includes our current approach to the renewable energy build-out.
Business as usual — where permitting processes for renewable assets often take as long as, if not longer than, construction — is no longer a viable option. Depending on the country and the renewable asset type, permitting can take up to six years, if not longer, before construction can begin. This is no longer compatible with a 1.5 degree Celsius trajectory in line with the Paris Agreement. We need a paradigm shift.
Local and national policy makers, authorities, industry and civil society must work together to accelerate the deployment of green energy. A supportive policy framework can help streamline and shorten permitting procedures significantly, giving more clarity for developers and the supply chain, and helping to unlock investments.
We also need to focus our attention on heavy transport and industry. From shipping and aviation, to heavy-duty road transport, to chemicals, aluminium, cement and steel — these sectors are the building blocks of our global economy and represent a third of GHG emissions.
Electrification through renewables holds the key to decarbonization across industry, transportation and heating. But for many of these sectors, direct electrification is not feasible with today’s available technologies. This is where power-to-X — converting electricity into another form of energy, e.g. power-to-fuel or power-to-hydrogen — can play a pivotal role. Decision makers can support this by finalizing and fast-tracking ongoing regulatory and administrative processes and appoint a clear role for renewable hydrogen and e-fuels.
Renewable hydrogen and e-fuels will enable society to phase-out oil-based fuels in these key sectors. And by converting these green electrons into fuels that can be stored, power-to-X will also be critical in adding another layer of resiliency to our global energy system, helping us achieve our energy security goals.
Green energy right, now
There is undeniable urgency; the renewable energy build-out must happen right now. But we can choose whether it will be a race to the top or to the bottom. Energy companies and authorities alike shouldn’t let this urgency blind us to the fact that the renewable energy build-out mustn’t come at the expense of people or nature. It’s the opposite; the renewable energy build-out can benefit both people and nature. This must be our north star.
We should choose a race to the top that not only takes into account cost-cutting priorities but also strives to generate long-term value — only so can we generate popular momentum and ensure local communities reap the full benefits of renewable energy projects.
The renewable energy build-out must put local communities and ecosystems at the center. By looking beyond cost, we can develop projects that generate long-term socioeconomic benefits and improve biodiversity to nurture healthy, thriving ecosystems.
Building green energy right means strengthening the resilience of local communities, with broad direct, indirect and induced impacts — from fair and equitable green job creation, to infrastructure and supplier investments, to capacity and skills building. It also means building it in harmony with nature and looking at how renewable energy projects can deliver a net-positive biodiversity impact. We can find solutions that address climate change and the no-less urgent biodiversity loss crisis, harnessing nature’s full potential for climate mitigation and adaptation.
António Guterres urged to accelerate action and “jumpstart the renewables revolution.” This revolution will require all of us: businesses, local and national governments, and civil society. We all have unique roles to play and no time to waste on yet unfulfilled climate pledges. Together, we can address our interrelated climate, energy security and cost-of-living crises, and consign fossil fuels to the past. We must build green energy right now and build it right, for people and nature. This is one of the key messages that Ørsted will be delivering at COP27.