Urgent Action Needed To To Ensure Swift Energy Transition

Acceleration of a more “holistic energy transition” is being reinforced by soaring fuel prices, shortage of essential commodities, slow progress on climate-change goals, energy justice and access, said a Swiss report.

“Countries are at risk of future events compounding the disruption of their energy supply chain at a time when the window to prevent the worst consequences of climate change is closing fast,” said Roberto Bocca, the WEF's head of energy, materials and infrastructure.

There is a growing need for investment in fossil fuels needed for energy transition, according to experts. Clean energy transition requires an increase in global renewable energy capacity as governments across the world seek security in renewable energy and its climate benefits.

As per sources, the new renewable power capacity rose by 6 percent in 2021 to a record 295 gigawatts, shaking off the rising cost of raw material, pandemic-driven construction delays and global supply chain challenges. This year as per IEA this number will increase by another 8 percent to 320GW. But this also means that we have to create a path that leads to more affordable access to energy.

Diversification of the energy mix along with fuels and energy suppliers is crucial for responding to volatility in the energy market.

Most countries rely on a handful of trade partners to meet energy requirements and increase deficient diversification of energy sources.

Of a total 34 countries with advanced economies, 11 rely on only three trade partners for more than 70 per cent of their fuel imports, the report found.

More countries need to make binding climate commitments, create long-term visions for domestic and regional energy systems and get investors for decarbonisation projects. Structural barriers to energy security include the surge in energy demand post-pandemic, fuel supply bottlenecks, inflationary pressures and reconfigured energy supply chains as a result of the war in Ukraine, the research revealed.

“The current energy crisis reveals just how important energy is to people and the economy,” said Espen Mehlum, head of energy, materials and infrastructure programme for benchmarking at the WEF.

Affordable access to energy is the way forward. Companies must help to protect against rising costs of living, including in transport, utilities and electricity, said Kathleen O’Reilly, global lead at Accenture Strategy.

“Vulnerable populations, in particular, who most feel the impact of volatile energy prices and their impact on other basic goods and services, must be a strategic focus in a transition to sustainability that is equitable in value and scalable in impact,” she said.

Success will largely rely on policy and investments. Prioritizing energy efficiency will strengthen energy system resilience and will be a win-win for reducing emissions.