Why I'm an energy transition optimist

4 December 2024 - In this blog, Dr Jan Rosenow, CISL Senior Associate and course lead of the new self-paced online course, Renewable Energy Foundations for Business, explains why he’s an energy transition optimist. There are common energy fallacies that stand in the way of the transition to clean energy, he discusses, and the urgent need for international co-operation and for business to drive the transition. There are also many reasons to be optimistic.

In 1993, the major German energy suppliers ran a full-page advert in national newspapers claiming that renewable energy could only ever provide 4% at the most to the German electricity system. Fast forward to 2023 and almost 60% of German electricity comes from renewables, mainly wind and solar. 30% of global electricity generation is now from renewable energy resources and in some countries, it now exceeds 90%. This little anecdote is an excellent representation of how the energy sector has changed and how fallacies are overcome. We were told many times that it would not be possible, just to find that several years later it became reality. This is why I call myself an energy transition optimist.

But it is also true that we are far from having transitioned away from fossil fuels. In fact, fossil fuel consumption has remained stubbornly high due to increased energy demand across the globe. However, for the first time since the Industrial Revolution, carbon emissions from fossil fuel combustion may finally plateau.

That’s good news for the climate. However, what is needed is not a plateau, but a steep drop of fossil fuel use to drive emission reductions. Whilst we have made significant inroads with electricity production, the share of clean energy in the industry, built environment and transport sectors has barely increased. Sceptics will point to global primary energy consumption data and claim that it will be impossible to replace all of that with renewable energy sources. Fortunately, we don’t have to do that.

The primary energy fallacy is a term coined eloquently by Paul Martin, a Canadian energy analyst. It is the idea that all primary energy from fossil fuels must be replaced by an equivalent amount of renewable energy. However, this is not necessary because more than two-thirds of primary energy is lost as waste heat during conversion processes. Think about a car engine: the majority of the fuel put into the car ends up as waste heat rather than moving the car. A fossil fuel boiler typically wastes 15% or so in converting fuel to usable heat. Electrification of those end uses on the other hand improves the efficiency dramatically. A heat pump will provide the same amount of heat as a gas boiler for 3-5 times less energy input because it moves and compresses pre-existing heat rather than burning a fuel. An electric car operates at almost 90% efficiency, making it multiple times more efficient than an internal combustion engine car which operates at about 20% efficiency.

What this means is that through electrification, we can dramatically improve the efficiency of our energy system and reduce energy being wasted. Recent analysis calculates that the improved energy efficiency of electrification alone (moving to technologies that use electricity as a source of energy such as electric vehicles and heat pumps) would result in a global reduction of final energy demand of around 40%, which is a significantly lower level of demand to be met through renewable energy production.

Another argument often made is that the big emitters in the world such as China aren’t committed to the energy transition, so why should other, much smaller countries be? The reality is that the amount of wind and solar power under construction in China is now nearly twice as much as the rest of the world combined. Yes, China also continues to build new coal plants, but the share of coal in the electricity mix is falling.

Too many argue that the energy transition is supposedly impossible instead of looking at how far we have already come. Yes, huge challenges remain, and we are currently not on track to meet climate commitments. There is a need to collectively rise to the sustainability challenge and the world remains resolutely on a deeply unsustainable path. But at the same time, we should find some comfort in the rapid transformation we have already seen in many countries around the world, and we should learn from what works and what has impact to shape our efforts going forward. We are at a turning point, and this should help us focus on making what seems impossible, possible. Together, we can lead the way in achieving the energy transition.

Innovation within the energy industry – supported by policy and by public and private investment – has driven and will continue to drive down costs of clean energy technologies. This trend is now unstoppable, according to the International Energy Agency. The challenges and hurdles present opportunities for innovation at the technical and political level. We will need to build out and optimise the use of our electricity grids. We can create the conditions in which electrification is the most economic option. And we must make sure that everyone can be part of and benefit from the transition. Unlike the German energy utilities in the 1990s, if we focus on how to get things done rather than on why they can’t be done, I believe we stand a chance of moving away from fossil fuels for good.

Businesses will play a leading role in building momentum for change. Innovation, driving down the costs of clean energy technologies and rolling them out to the market all require businesses to play their part. How to begin? Upskilling the workforce with CISL’s Renewable Energy Foundations for Business will enhance understanding of the current energy system, its challenges and opportunities for each organisation to lead the transformation to Net Zero.