The energy transition worldwide
The energy transition is a key element of action against climate change. Renewable energy and energy efficiency are considered to be key to reducing greenhouse gases, which are responsible for anthropogenic climate change. The energy transition also drives innovation, promoting growth, prosperity and employment in forward-looking industries. In addition, it can help wean us from our dependence on oil and gas.
The idea of switching our energy supply to renewable energy makes many citizens sceptical, provoking questions such as: ‘Isn’t that too expensive? What will happen to the people who work in the coal industry? What will happen with regions without much sun or wind? What geopolitical impacts will the energy transition have and what does that mean for our security?’
To find answers to these and other questions, it is a good idea to change perspectives.
Discover renewable energy from different perspectives
To successfully execute the energy transition and join forces to find solutions, we need to understand the various stakeholders’ interests and reconcile them with each other. Get to know the perspectives.
Choose a perspective and then switch between the different texts.
As they disappear, gargantuan wind farms, photovoltaic plants and high-voltage transmission lines are emerging that are altering our familiar landscapes. Not all citizens are welcoming this change.
The relationship between electricity producers and consumers is also already changing: with private mini-photovoltaic systems installed on their roofs, households are no longer just consuming electricity, they are also producing it themselves. In some cities, cooperative wind power plants are already in operation. This allows municipalities to be their own suppliers, relieving them of their dependence on the national electricity grid. As a result, electricity consumption is becoming more sustainable and affordable, and power generation more decentralised. Surplus electricity can additionally be fed into the national electricity grid. Moreover, it is now possible to electrify remote areas that were not previously connected to the national electricity grid.
Worldwide, over one billion people lack access to electricity. Billions of people are dependent on wood, charcoal and plant residues for cooking and heating. The lack of electricity dramatically impacts their quality of life, environment, health, education and income opportunities.
The energy transition creates better health!
Using electricity instead of coal or charcoal to cook and heat their homes means that families are not exposed to hazardous substances. In addition, a secure electricity supply ensures functioning medical care.
The energy transition creates more income!
When women require less time for housework, because they no longer need to gather firewood, families can boost their incomes.
The energy transition creates more equality!
When women are able participate in working life to a greater extent, equality increases. Women can also play a key role in boosting the acceptance of clean energy.
The energy transition creates more education!
When children and adults can learn in the evening thanks to the availability of electric light, educational levels increase.
The energy transition creates more opportunities!
Rural regions can develop without being completely bypassed by the cities.
‘How does the energy transition boost gender equality?’ Visit our exhibitions and read about Solar Sister in Nigeria.
At local level, there are more and more cooperatives and other citizens’ organisations that implement their own renewable energy projects, for example by installing photovoltaic systems on the roofs of their houses. The energy generated by these systems is delivered directly to the people living in the house. Green electricity is cheaper than electricity supplied from the central electricity grid, because the residents get well over a third of the electricity they consume from their own roof.
The engagement of individual actors or citizens’ organisations is changing the electricity market, enabling anyone to produce and use environmentally friendly, affordable electricity, helping the climate and reducing dependency on the national electricity grid. Our own action therefore also has a profound impact on the electricity market. The supply side will be forced to respond to changes in demand patterns. Large energy suppliers must adapt to the process of the energy transition in the long run.
At the same time, affected citizens must be included in the expansion and restructuring of local electricity grids. They must be able to participate in planning and reap financial benefits.
In addition, responsible use of raw materials continues to be important. This relates to matters such as working conditions and environmental pollution connected with the extraction of raw materials, and ensuring a fair share of profits for everyone concerned. Specifically, this means that regions with resource wealth must benefit to the same extent as the companies processing these raw materials. To protect human rights and the environment, we have to address environmental pollution in regions affected by the extraction of raw materials.
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In addition, the individual member states have committed to nationally determined contributions (NDCs) to achieve the overarching goal together. Restructuring the energy supply system plays an important role in meeting these goals.
Germany’s NDCs include the following, for example:
Become carbon-neutral by 2050 and reduce greenhouse gas emissions by 55 to 56 per cent below 1990 levels by 2030.
To reach these goals, Germany plans to increase the share of renewable energy. In 2019, renewables already accounted for 42.1 per cent of the electricity sector, 14.7 per cent of the heating sector and 5.5 per cent of the transport sector.
Germany has planned a three-stage expansion of renewable energy:
- 40 to 45 per cent by 2025
- 55 to 60 per cent by 2035 and
- at least 80 per cent by 2050.
The costs arising for expansion of the necessary infrastructure for the renewable energy industries are high, while these costs have only a marginal impact as fixed costs in the generation of power from fossil fuels. Without subsidies, the selling price of green electricity would be even more expensive than conventional electricity. Although electricity from renewable energy will be the cheapest form of energy in future, these high starting costs are obstructing access to the market. Policy-makers can influence the situation by providing subsidies, which give consumers an incentive to buy green electricity. When such subsidies are also tied to legal guarantees for producers, this also influences the supply side.
The Renewable Energy Sources Act (EEG) is an example of this type of legislation from Germany. The act regulates the preferential use of electricity from renewable energy sources and fixed remuneration for this electricity for those who generate it. A renewables surcharge (EEG surcharge) offsets differences occurring among the transmission system operators when trading this electricity.
The EEG has been copied some 100 times worldwide and has also supported many other countries with their energy transition. As a climate change law, it has been a veritable export hit. Thanks to the law in Germany and its counterparts worldwide, solar energy has gained momentum around the globe. The EEG has mobilised requisite investments, innovations and economies of scale. As a result, within two decades the initially costly technology has become the cheapest, most popular and fastest growing energy source throughout the world. Since the EEG came into effect, the prices of turnkey solar power plants have dropped by 80 to 90 per cent.
In the medium to long term, however, the plan is to use storage systems, using hydrogen for example, to bridge such periods. Here, politics can support the essential research or create conditions in which such technologies pay off.
The grand challenge entails reorganising the energy market. All of the stakeholders in the energy market need to respond as well as possible to the fluctuating levels of energy generated from wind and sun. At the same time, the networks need competition between the different offset options to keep overall costs low. The merging of regional electricity markets in Europe, which have been separate to date, and transnational grid expansion are securing the stability and flexibility of power grids.
Governments and parliaments conclude international agreements that regulate transnational cooperation between transmission system operators or national regulatory authorities, for example. International trade policy can contribute to increased use of renewable energy. Standards for implementing environmental and climate-related goals are especially effective if they are valid internationally. Establishing a common infrastructure for intelligent use of renewable resources is an equally important aspect.
In the past, many wars and conflicts have been waged over oil. Expanding renewable energy causes power structures to change. Monopolies on energy sources are dismantled and energy generation becomes more decentralised. In dialogue together, governments and parliaments can deal with these changes and prevent conflicts.
Staying engaged in dialogue on all these aspects is an important responsibility for politics.
This corresponds to 3,000 times the volume of energy produced by a large nuclear power plant every day. Alternatively, with this volume of energy, an electric car could drive around the world at the Equator 69 times.
While our handling of energy is increasingly efficient, energy consumption could increase to 1.8 terajoules a day in the next 30 years.
Compared to renewable forms of energy, fossil fuels are becoming less and less competitive.
Even in Germany, which has limited sunlight, electricity can now be generated from free-field photovoltaic systems for as little as 3.7 eurocents per kilowatt hour. In comparison, electricity generated from lignite costs at least 4.6 eurocents per kilowatt hour.
Expanding renewables and investing in energy efficiency is changing professions and creating new jobs in promising sectors.
Today there are already 11 million jobs in the renewables industry worldwide (2019). By 2050 this number could rise to as many as 42 million.
Companies in the energy sector need workers with brand new qualifications. These new jobs are replacing some jobs in the fossil energy sector. There are also structural changes taking place. For example, the opening of the energy markets in Europe is boosting competition and forcing companies to become more efficient. These factors are also leading to the adaptation of workplaces. As a result, in many places the workforces of conventional energy sector companies are shrinking while the share of employees in the renewable energy sector is increasing.
Investment in renewable energy is also rising. In 2018 it was twice as high as investment in the coal and gas industry. The renewables sector is thus playing an increasingly key role in the global economic system.
This is also related to the changing requirements for the electricity grid. Originally, it was designed solely to distribute electricity to individual consumers. It worked like a one-way street. Today, nearly all solar power systems and many wind turbines feed their electricity into the distribution grid. Whatever is not needed locally flows in the reverse direction. Furthermore, power generation from renewables fluctuates according to weather conditions. Solar power systems generate a lot of electricity when the sun shines but their output drops rapidly when it is cloudy. In order for distribution grids to remain stable despite inconsistent production, they have to be developed to create smart grids. Within these grids, all stakeholders communicate with each other, from generation to transport, storage and distribution and ultimately to the end consumers. This enables electricity generation and consumption to be better coordinated and adapted at short notice. For this reason, energy service providers are now also responsible for energy storage, energy management and data management, and much more besides.
Now more stakeholders have joined the market, too: energy producers, service providers and consulting companies, as well as private individuals and municipalities are now involved in the energy transition. There are private producer cooperatives as well as cities and companies that produce their energy themselves, all of which is making the energy transition more and more democratic.
The use of smart digital technologies enables forecasts to be made about the availability of renewable energy. The forecasts provide a basis for stability and flexibility in the electricity grid. Digital technologies also help optimise maintenance processes in power plants. Sensors connected to the internet enable damage to be detected automatically, as well as means of improving energy generation.
Today, large energy companies no longer shape the energy sector on their own. New, digital business models are emerging. Global digital businesses and start-ups are above all bringing small producers and consumers closer together.
But the renewables sector is continuously changing in other areas as well. Here are a couple of examples.
- Japanese companies are the world leaders in fuel cells, the ‘driving force’ for hydrogen-powered vehicles. Today, the largest Japanese automotive manufacturer has a global market share of 76 per cent in hydrogen mobility.
- Chinese companies rank number 1 on the global photovoltaics market. In 2019, China subsidised its solar power industry to the tune of EUR 370 million. Today, Chinese manufacturers account for 70 per cent of the market. The once leading Japanese and European companies now no longer even reach a joint market share of 10 per cent.
- In countries such as Kenya and Tanzania, pay-as-you-go (PAYG) models are increasingly being used for purchasing micro-PV units and solar home systems. A solar home system, which consists of a solar module installed on the roof, a battery and a lamp, can provide electric light for a family of four or five.
Where do we go from here?
Environmental technologies are booming, and their market share is continuously growing – and it will continue to do so in future, especially in the environmentally sound generation, storage and distribution of energy, energy efficiency, raw materials and materials efficiency, sustainable mobility, the circular economy and sustainable water management.
Scientific insights on climate change and global warming offer a foundation for politics and society to identify problems. Scientific research reveals how the energy transition can impact business and society.
Facts, analyses and forecasts provide the basis for policy-making. Solutions proposed by science help prevent negative social developments such as those associated with structural change in coal-mining areas. They also help to develop new technologies that can be leveraged to use renewable energy efficiently.
Wind and solar power is technologically sophisticated, reliable and affordable. Numerous researchers, including many in international think tanks, are working to make renewable energy even cheaper. Their main goal is to boost efficiency levels and reduce land use.
Research projects investigate the way in which people’s concerns can be better accommodated in the energy processes. In the field of acceptance research, studies examine conflicts of interest between nature conservation or tourism and sustainable energy supply, for example. Researchers listen to citizens, speak with politicians and business leaders and make efforts to provide a neutral base for decision-making.
Energy research has created the preconditions to successfully restructure the energy systems. Applied research has led to renewable energy being produced more and more cheaply and, in turn, being used ever more broadly, with rising levels of acceptance.
For this reason, storage solutions are a key component of the energy transition.
In addition to pumped storage power plants and batteries, hydrogen has a particularly important role to play here.
Renewable energy can be stored directly in the form of hydrogen, which makes it transportable. Hydrogen is the third most frequent element on the Earth’s surface and is contained in all organic substances, not only water. When hydrogen is burnt, the end products are only heat and water. One kilogram of hydrogen contains three times as much energy as a kilogram of petroleum.
Developments related to all aspects of this new energy source are in full swing. Today there are already niches where hydrogen energy is being used, in both stationary and mobile applications.
However, at present too much energy is lost during the conversion to electricity, which means that the use of hydrogen as an energy storage system is limited. International teams of researchers are working worldwide to substantially raise the efficiency level to make the use of hydrogen worthwhile.
It is difficult to predict the extent to which existing technologies can be further optimised or completely new technologies will trigger innovative leaps. This is why it is important to undertake research along the entire technology chain in a way that is technology-neutral and unbiased, from basic and application-oriented research to market entry and commercial use.
One of the things that scientists around the world are investigating is solutions for intelligent electricity grids that use the best means of offsetting fluctuations in the feeding in of renewable energy generated in decentralised systems. Scientists from 11 European countries are engaged in research in the EU’s PROMOTioN research project on linking wind farms in the North Sea across Europe. They are analysing the positive effects of a joint offshore electricity grid infrastructure. In addition, they are studying whether and how a common offshore electricity grid would strengthen the European electricity market in financial, technical and environmental technology terms.
This is just one example of successful transnational research work.
The energy transition is unstoppable.
In 2018, renewable energy accounted for 17.9 per cent of global end energy consumption.
For power generation in particular, the share of electricity produced from renewable energy is increasing, with no end in sight. In 2019, the share of renewable energy in the total global power generated rose to 27 per cent. This share is broken down into 58 per cent hydropower, 22 per cent wind energy, 10 per cent photovoltaic energy and 8 per cent bioenergy. The share of renewable energy in the electricity mix (including hydropower) is currently highest in China, the USA, Brazil, India and Germany. But other countries, such as Argentina, Australia, Israel, Mexico, Turkey and Viet Nam, are also seeing sharp increases in the share of installed capacity from renewable energy.
In industry, transport and buildings, however, the share of renewable energy is still comparatively low. However, progress is being made in these areas too.
Renewable energy offers huge potential.
Not only can we be supplied with climate-friendly energy and protect the climate, we can also improve air quality and benefit our health.
Worldwide, more and more people are gaining access to electricity, especially from renewable sources. Despite this progress, 860 million people, many of them in sub-Saharan Africa, still lack access to electricity. For the countries in this region, as well regions in South Asia and in South and Central America, decentralised systems such as mini solar power plants that operate completely off the grid have an important role to play.
To restructure our energy system sustainably and successfully, it is essential to adapt consumption, use available energy efficiently and come up with a suitable market design and storage options. Restructuring the energy supply system is complex and is highly dependent on local circumstances, such as the availability of sun, wind and water. This means that there is no one-size-fits-all solution. However, regions and countries can learn a great deal from the experiences of others and can join forces to promote the restructuring of the energy supply system worldwide. After all, to create a secure, sustainable and affordable energy supply system, we need joint solutions.
"Sustainable Development Goal 7 (SDG 7): Ensure access to affordable, reliable, sustainable and modern energy for all"
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