6 March 2023
The first installation in this year’s Green Energy Conference (GEC) series focused on the role of partnerships in overcoming complex decarbonisation and energy security challenges and scaling up climate technologies.
Beyond the climate imperative, a key reason that commitment to the transition grew in 2022 was an increased appreciation of how low-carbon alternatives can aid long-term energy security and affordability. Geopolitical tension and extreme weather brought energy supply security to the fore of the political agenda and made governments eager to hedge against future energy price shocks and their consequent economic fallout. Catherine MacGregor, CEO of Engie, reflected on how this macro trend has informed Engie’s strategic investment priorities, increasing the focus on flexibility solutions like batteries and dispatchable generation.
Watch Catherine MacGregor, Chief Executive Officer of Engie, reflect on how macroeconomic trends have informed energy investment priorities.
With each passing year, the rate at which we must cut emissions and deploy new solutions for a net zero world gets steeper. While 2022 was a record year for energy transition investment, the world remains below a pathway consistent with the Paris Agreement goal of keeping global warming well below 2C. Aligning to that trajectory will require current annual investment to increase three-fold between now and 2030 and five-fold in the 2030s.
Time is of the essence in the transition and a recurring message from panellists was that at our current stage of the energy transition, scale trumps innovation. For most sectors, mature low-carbon technologies exist that can satisfy most of their demand and our priority should be scaling up production of these to improve their cost competitiveness. This was stressed particularly by the CEO of Verkor, a French EV battery manufacturer, with respect to the risks of focusing too much on new battery chemistries, and the CEO of SkyNRG, a sustainable aviation fuels producer, with respect to the focus on new aircraft propulsion technologies, such as hydrogen.
We don't need a breakthrough in the technology to be able to have the range that will satisfy most people’s needs, especially as the network of charging options will increase. We are in a position of being connected to the [innovation] ecosystem but also willing to accelerate the best viable technology of today.”
CEO of Verkor
We will see arguments around new propulsion technologies, we will see efficiencies in the airline industry, we’re going to continue to see offsets as part of the mix. But a huge chunk has to come from sustainable aviation fuel, and it can be done today.”
CEO of SkyNRG
The energy transition requires dizzying levels of new infrastructure across various sectors. This is especially daunting in sectors like carbon capture and storage (CCS) which, as flagged by Nick Cooper, CEO of Storegga, needs to build out infrastructure at the scale of the 120-year-old oil and gas industry between now and 2050 to meet the goals of the Paris Agreement. In that context, Catherine MacGregor expertly summed up the important role of repurposing and reusing in saying “the best infrastructure is that which has already been built.” Other speakers reinforced this point with regards to reusing minerals in EV batteries, repurposing grid infrastructure for flexibility solutions and EV charging deployment.
Though the increased focus on energy security in 2022 drove greater government commitment to the transition, it also drove a shift towards an increasingly nationalistic approach to climate policy. The race to deploy climate solutions is on and countries are taking major steps to attract investment in domestic value chains. Albert Cheung highlighted that China remains a clear leader, accounting for 50 per cent of the $US1 trillion invested in the transition in 2022 and exercising an even greater dominance in most clean energy and critical mineral supply chains. However, governments across the globe are looking to change this picture with a steady stream of policy announcements aimed at onshoring or “friend-shoring” clean energy supply chains to reduce their reliance on China and secure a competitive advantage in the transition.