A new report from S&P Global has said that the energy transition is facing ‘challenges’, with governments more focused on providing affordable energy than on sustainability.
The report, Look Forward: Energy at the Crossroads, suggests that achieving net-zero emissions by 2050 is ‘unlikely’, with the energy transition developing differently around the world, depending on available resources, technologies, and policy choices.
Elsewhere, it notes that Western economies face challenges in reducing dependence on China for clean technology, requiring significant investment and planning to develop local manufacturing.
Transformative approach
“Today’s energy transition is fundamentally distinct from its predecessors, as it is meant to be transformative rather than an energy addition,” commented Atul Arya, chief energy strategist at S&P Global Commodity Insights.
“Its scale and associated challenges mean it will not proceed as many expect; it will be multidimensional, proceeding at different rates with different technologies in regions with different priorities. This reflects the complexities of the energy system that is the foundation of today’s global economy and the ubiquity of fossil fuels as the building blocks of modern society. The importance of balancing economic growth, energy security, energy access and sustainability underscores the need to rethink the transition and redefine a pragmatic path forward.”
Decarbonisation solutions
Other findings from the report include a growing interest in nuclear energy as a potential solution for decarbonisation, particularly as electricity demand rises due to AI-driven technologies. Artificial intelligence is also poised to transform operational efficiency in the energy sector, and ‘could transform how energy is produced and distributed’, S&P Global said.
‘New observation technologies are providing more accurate, actionable data on methane emissions, revealing higher emissions levels than previously reported,’ it added.
However, despite the estimated $25 trillion financial impact of climate change by 2050, only 35% of major companies have developed climate adaptation plans, it added. Read more here.
