Naturally, last week all attention was focused on one provision in the final agreement of the climate summit in Dubai. A sentence of 34 words, to be precise, from the 21-page document. For the first time, government leaders of almost all countries in the world are promising to “move away” from oil and gas. During the 27 previous climate summits, politicians kept fighting each other about this. But now that provision was there after all. Advocates shouted that the “beginning of the end” of the fossil age had finally begun. They have been warning for years that fossil fuels are the biggest culprit when it comes to dangerous climate change.
But there is another provision that actually deserves just as much attention and that has been somewhat overlooked. Namely that in 2030, six years from now, there must be three times as much renewable energy as there is now. Think of sun, wind, hydrogen and biomass as energy sources. That is not just a goal. If the world succeeds in realizing that ambition, the demand for fossil energy could also fall significantly via this route – faster than expected, even if the oil countries continue to pump oil with the help of ‘loopholes’ in the climate treaty .
The International Energy Agency (IEA) Darling at a time when global demand for oil and gas will peak in 2030 and then more or less stabilize. Because more and more renewable energy is being added, which is taking the place of fossil energy. In these calculations, the world is on average on track to double the share of renewable energy in the total energy supply. If it comes to a tripling, it is possible peak oilmoment may come earlier.
Is this a hidden game changer in the Dubai treaty?
Cries of alarm
In any case, there are plenty of obstacles, experts say. Recently, you have heard more and more alarm calls coming from the sustainable energy sector. It has grown explosively in recent years, but can no longer keep up with the pace of sustainability. There are shortages of everything from turbines to transformers. And finding enough staff is often a problem. Industry organization Techniek Nederland estimates that there are currently twenty thousand professionals too few to make the energy transition in the Netherlands a success. And that number will probably only increase in the coming years if urgent “unorthodox” measures are not taken to increase the influx into the sector, a spokesperson warns. “The urgency is greater than ever.”
The power grid is also becoming increasingly full in various (Western) countries due to all the new wind farms and solar panels, which hinders further ‘electrification’ of companies and homes. And in poorer countries, for example in Africa, the power grid is not yet sufficiently developed to make large-scale electrification possible.
Interest rates have meanwhile risen sharply, which makes borrowing money for new investments in projects less attractive. All in all, that is a toxic mix for companies. Chemical group HyCC made recently announced that, partly due to rising costs, it is postponing the construction of a hydrogen factory in Delfzijl. Three companies operating in the Dutch part of the North Sea CO2 Gasunie, the Port of Rotterdam Authority and Energiebeheer Nederland have seen their budgets continue to explode in recent months, because parts became more expensive by the day. The consortium was unable to order earlier, because objection procedures were still ongoing.
And then there are the immense amounts of money needed to accelerate. Worldwide, 600 billion euros are now invested in renewable energy every year, but that amount must triple to more than 1,200 billion, according to calculations of the IEA. Some large private investors are already dropping out due to rising interest rates. The American data analysis agency Preqin calculated recently that such parties had $29 billion to invest in green energy in the first nine months of this year. In the same period last year, this was still $128 billion – more than 4.5 times as much.
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‘Within reach’
But there are also optimists who say it is possible. In fact, a tripling of the share of renewable energy in the energy supply is actually “within reach”. Researchers from Ember, a British think tank specializing in energy issues, this month put the existing greening plans of countries into perspective. in a row and according to them they are hopeful. A number of countries have already made plans to more than double, and some even more than triple, the study shows. If the world as a whole wants to have three times as much green energy by 2030, an additional 17 percent must be added annually from now on. In recent years, the world has almost reached that level, according to Ember. Between 2016 and 2023, an average of 16 percent was added. So it is mainly a matter of ‘holding on’.
Admittedly, that figure is a bit distorted by this year’s gigantic growth in particular. It was 71 percent, while in previous years it was always 10 percent, and as a result the average was significantly increased by one year. Ember also recognizes the existence of new ‘obstacles in the road’ that the sector complains about. But at the same time, the think tank states that the industry should not underestimate itself. “In recent years she has often shown that she can far exceed her own growth expectations.” The researchers point out, among other things, that the total production capacity of solar panel factories worldwide has grown even faster in recent times than the increase in the number of solar panels that were actually installed. That capacity doubled in two years. In other words: there are at least no shortages of solar panels that will put a brake on ambitions. In fact, solar panels are now cheaper than ever.
It helps, of course, that politicians in Dubai have explicitly committed themselves to this higher goal. If there is political support, companies dare to invest more easily. Ember, in the conclusion: “All signs point to acceleration.”
It is crucial that politicians also translate the set goals into concrete policy, says MEP Bas Eickhout, who follows the climate and energy dossier for GroenLinks in Brussels and was at the climate summit in Dubai in recent days. Policy that is legally enforceable, if necessary, because, according to him, there have been plenty of examples in recent years of governments that promised all kinds of things but did not put their words into action. Or they delayed, for example because of economic interests. In the Netherlands, the judge had to be involved to force the government to do more against greenhouse gas emissions, in the now famous Urgenda lawsuit. Eickhout: “I would have liked a sharper formulation. It is crucial that countries translate this into new, national ambitions.”
According to Eickhout, the next two climate summits in particular, in Azerbaijan and Brazil, “will actually determine the success of the Dubai summit.” In Azerbaijan, in 2024 it will mainly concern the financing of all new plans to be made. If poorer countries, especially those in Africa, fail to raise enough money, he says, it will likely be “business as usual” to stay. The change of course will mainly have to come from those countries, he says. “There are already significant plans in Europe and Asia and the business case for sustainability has now been discovered.” In Brazil, a year later, in 2025, it will have to be about all the plans themselves, so they really have to be in place. “And then it must become clear whether the tripling can actually be achieved.”
Profit reversed
But perhaps the most important thing is that at the same time significant efforts are being made to save energy by citizens, companies and governments. By making devices and machines that use energy more efficiently, for example. Or by simply consuming less. “Because if energy demand continues to grow, you can ‘add’ renewable energy all you want, but then that gain is immediately undone by the increase in consumption,” says senior climate finance researcher Pieter Pauw from TU Eindhoven. “Especially if the pace of demand growth is higher than the growth of renewable energy – and that has been exactly the case in recent years.”
Pauw is sometimes bothered by advertising posters from banks and companies that proudly say that they invest so much in renewable energy, he says. “If we do not continue to make significant savings on consumption, the energy transition will not happen fast enough. Energy that you do not use is the most sustainable: you do not have to generate, transport or store it. And you prevent congestion.”
A provision has also been adopted in this regard in the Dubai Convention. By 2030, the world will have to save energy by twice as much energy on average as it does now. Whether this will work is another question.
During last year’s energy crisis, many companies and households in Europe managed to significantly reduce their energy consumption, although this was often out of dire necessity because otherwise bills would remain unpaid. Now that prices have calmed down a bit, savings are also decreasing. Consumption is still lower, but things seem to be getting better. While the intention is to go even further.
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