A necessary change: 50% of global pollution is caused by the generation of electricity
An energy change based on highly polluting fossil fuels, for a system based on renewable sources. The move from decarbonisation to electrification of sectors such as transport or the digitisation of networks incorporates the need to achieve cleaner electricity.
The growth of world demand for electricity.A growth derived from the increase in consumption by emerging countries, whose populations are growing rapidly.
The massification of the urban environment.The concentration of industrial activity, transport... All this causes 80% of the world population to live with air quality below the standards set by the WHO.
It has government support.From the EU, through the Green Deal, whose objective is to be neutral in carbon emissions by 2050; new carbon taxes, incentives for electric vehicles and the obligation for new buildings to be “zero emission” from 2021. And not just Europe; the USA and Japan also aim to achieve zero carbon emissions by 2050 and 2060 respectively
The electrification of society is a fact, and its production through renewable sources is the only possible outcome.
Companies are beginning to obtain greater profitability thanks to their energy transition-linked investments.
LRecent and progressive advances have caused a reduction in costs, both in the implementation of infrastructures and in the storage of electricity.
Cheaper infrastructure.Over the last eight years, the material costs associated with solar and wind energy have been reduced by 80% and 35% respectively.
Cheaper batteries.The price of lithium-ion batteries (the most common type of batteries), have been cut by 88%.
It is now more profitable to build and operate a clean energy generating facility than a fossil fuel plant.
Levelised cost of different energy sources.
Graphic Source: Schroders
But, there are also social and circumstantial reasons:
New communication habits.Telecommuting, social media and online entertainment require more electricity. Google and Facebook estimate a 20% growth in electricity needs for their data centres and networks.
The Ukrainian war.The uncertainty about the supply of gas to Europe, with the consequent increase in the price of both gas and oil, places the development of renewable energies as a strategic priority.
The paradigm shift in energy generation and consumption is a process that involves multiple transformations. Companies from different sectors are involved in this value chain:
Power generation and distribution companies.These companies increasingly rely on renewable energy sources.
Industrial equipment companies.Such as turbines for power generation, more insulating construction materials that improve efficiency, or cables and electrical equipment necessary for the deployment of new transmission lines.
Companies that develop solar panel technologies, battery storage and charging centres for electric mobility.
The new electric vehicles.In addition to the components needed to manufacture them, the new forms of mobility tend towards autonomous driving that requires new technological advances.
What do the experts think?
The International Energy Agency estimates that the demand for electricity will increase in the next two decades. from the current 25,000 TWh to 40,000 TWh. It is expected that two thirds of that energy will be generated through renewable sources.
The same organisation foresees that an additional investment of US$ 60 billion will be necessary to reach the objective of not increasing the temperature by more than 1.5 ºC in this century.
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