How the energy transition will be a hugely impactful part of the coming decades.
Fossil Fuels: Costly, Risky, Volatile
The transition away from oil, coal and gas is becoming increasingly critical, with numerous studies showing that fossil fuels–in addition to their effect on the climate– are also more expensive, less safe and less reliable than renewable energy sources.
This was highlighted in 2022 when Russia’s invasion of Ukraine caused a spike in natural gas prices across Europe. Governments around the world have responded by scaling up investments in renewable energy sources and infrastructure such as batteries.
In 2022, the United States passed the landmark Inflation Reduction Act, which aimed to address the economic impacts of climate change and foster the growth of clean energy industries. This legislation signaled a renewed commitment to transitioning towards a more sustainable, low-carbon economy.
In early 2023, Europe followed suit with the “Green Deal Industrial Plan,” a comprehensive strategy designed to transform the region’s industrial sectors and support innovation in clean technologies.
Rapid Renewable Energy Growth
Rapid growth and cost reductions in renewable energy sources like solar & wind have revolutionized the way we generate electricity.
In just two decades, the cost of solar power has dropped by over 80%, making it a viable alternative to traditional fossil fuels. Wind turbines are now being installed at an unprecedented rate, with global capacity increasing from 17 gigawatts in 2000 to 564 gigawatts in 2019.
This rapid expansion is helping countries around the world reduce their dependence on carbon-emitting fuels. Moreover, the widespread adoption of renewables is providing affordable and reliable access to electricity for millions of people in developing countries who previously lacked access or relied on unstable, polluting sources of power.
Advancing Battery Storage Tech
Innovations in battery and energy storage technology have transformed the way we store and use electricity. Advances in lithium-ion batteries, for example, have enabled us to store more energy than ever before, allowing electric vehicles to travel further distances on a single charge.
This has made them increasingly popular as an alternative to petrol or diesel cars. Other developments such as flow batteries are providing reliable access to electricity for remote communities.
New battery technologies are emerging at a rapid clip with promising advances for energy grids, industrial applications, and transportation like electric cars and even electric aircraft.
Renewable Energy Innovations
New renewable energy sources like geothermal, ocean current & tidal power, waste energy conversion offer additional opportunities to generate clean electricity.
Geothermal power plants utilize the Earth’s natural heat, found deep within its crust, as an abundant and reliable energy source.
Meanwhile, the power of ocean currents and tides is being harnessed more effectively than ever before. In countries such as Japan and the United States, advanced technologies like underwater turbines and other energy capture devices are being employed to transform the kinetic energy of these water movements into usable electricity.
Waste energy conversion has also gained significant traction as an innovative method for generating clean electricity. This process involves converting organic materials, including food waste, raw sewage, and agricultural byproducts, into renewable energy sources.
Electric Vehicle Innovation
Advances in electric vehicle technology have overhauled the way we travel, providing a cleaner and more efficient alternative to traditional fossil fuels. Electric vehicles now account for the majority of growth in global car sales.
Innovations such as improved battery capacity and energy storage technology have enabled electric vehicles to travel further distances on a single charge. Car manufacturers are also developing autonomous driving systems and smart routing that can help reduce emissions even further by optimizing routes and improving traffic flow.
Boosting Building Efficiency
Increasing energy efficiency in buildings and appliances is essential for reducing emissions and creating a more sustainable future. Governments are introducing regulations to ensure that new buildings meet higher standards of insulation, while incentives are being offered to encourage people to upgrade their existing homes.
One of the most simple innovations is LED lighting, which has become increasingly popular due to its low power usage and long lifespan compared to traditional bulbs.
Appliances such as refrigerators, washing machines and air conditioners have become much more efficient over the past two decades, with some models using up to 70% less electricity than older models.
Smart thermostats can be used to automatically adjust heating or cooling systems based on occupancy levels or weather conditions, helping reduce energy consumption even further.
In addition, home-installed heat pumps are becoming more widespread and promise to even further cut both costs and emissions.
Empowering Microgrids and Waste Energy
Increasing access to reliable and affordable energy is slowly transforming global power markets. Microgrids, which are small-scale electricity grids that can operate independently or in conjunction with larger networks, provide a cost-effective solution for rural communities that lack access to traditional power sources
These microgrids also offer benefits to centralized grids including load balancing and the ability to feed energy back into the grid in periods of high demand. Waste-to-energy programs also offer an alternative source of energy by converting organic waste into biogas or electricity.
In India, microgrids powered by solar panels are providing clean energy to remote villages where grid connections are not available. In China, waste-to-energy plants process over 30 million tons of municipal solid waste each year, generating enough electricity to power millions of homes.
In Africa, several countries have implemented projects that convert agricultural residues such as crop stalks into biofuel for cooking and heating purposes.
Nuclear Power Innovations: Modular Reactors
Innovations in nuclear power, including the example of modular reactors, have the potential to reduce costs and increase efficiency. Modular reactors are smaller than traditional nuclear plants and can be built off-site before being transported to their destination for installation.
This reduces construction time and cost while also allowing for more flexibility in design. Additionally, these reactors use less fuel per unit of energy produced compared to traditional designs, making them a more efficient option. Furthermore, they are designed with safety features that make them inherently safer than older models.
The ability to deploy such modular reactors at lower costs remains to be demonstrated, but no other existing power source offers the stability and reduced environmental footprint that nuclear power does, so its development is well worth pursuing.
Fostering Fusion Power Investment
Fusion power is one notable alternative to current nuclear fission plants, with public and private investments into fusion power increasing rapidly in this century. Fusion technology has the potential to provide an abundant, safe and carbon-free source of energy that could revolutionize our current energy systems.
Governments around the world are investing heavily in research and development, with China recently announcing plans for a large-scale experimental reactor by 2035. Private companies such as General Fusion, Tokamak Energy, and Commonwealth Fusion Systems have also invested billions of dollars into their own projects.
The European Union has committed €1 billion towards its Fusion for Energy program, while Japan’s ITER project is expected to cost over $20 billion when completed in 2025.
These investments could help accelerate the validation and eventual commercialisation of fusion power, which would provide humanity with a virtually inexhaustible source of clean energy for generations to come.
Carbon Capture and Storage in Europe and US
The development of carbon capture and storage technologies, along with maturing carbon markets in Europe and tax incentives in the Inflation Reduction Act in the United States, are key steps towards reducing global emissions.
Carbon capture technology captures CO2 from power plants or industrial processes before it is released into the atmosphere. Other technologies are being developed to capture CO2 directly from the atmosphere or oceans. Whatever its source, captured CO2 can then be stored underground or used for other purposes such as alternative plastics and beverage carbonization. Carbon markets allow companies to buy and sell emission allowances or certificates of sequestered carbon, creating an economic incentive to both capture CO2 and reduce emissions.
Tax incentives such as those included in the US Inflation Reduction Act provide additional financial incentives for businesses investing in clean energy solutions. These developments have helped drive down emissions while providing a boost to renewable energy sources like solar and wind power.
Climate-Friendly Economics: Support & Action
Political support and regulatory action that encourages climate-friendly economic activities have been essential in driving down emissions while providing a boost to renewable energy sources.
Governments around the world are implementing laws, tax incentives and other measures to encourage businesses to invest in clean energy solutions. In Europe, carbon markets have created strong economic incentives for reducing emissions. The US Inflation Reduction Act is having a similar effect in the United States.
Governments around the world are investing in next generation technologies such as fusion power, while also creating tax breaks for consumers for everything from heat pump installations to electric vehicle purchases. These developments demonstrate how political support and regulatory action can help create a more sustainable future through incentivising climate-friendly economic activities worldwide.
