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UK vs EU Energy Security Policy: What you need to know

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By David Kipling, CEO – On-Site Energy

In April 2022 the UK published its Energy Security Strategy. The key aim of the strategy is for the UK to achieve long-term independence from foreign energy sources and decarbonise the nation’s power supply. The main initiatives of the strategy are investment in nuclear generation and offshore wind, the latter being the source of hydrogen generation.

Contrasting this to EU energy security strategy (which is far more dependent on Russian gas) the EU highlights rapid action to embrace energy savings, diversification of energy supplies, and accelerated roll-out of renewable energy to replace fossil fuels in homes, industry and power generation.

UK plans are all long-term measures – it takes 10+ years to develop nuclear and offshore wind UK sees oil and gas as an important transition fuel and has set out plans to increase activity in the UK North Sea. In the meantime, CO2 reductions will be incremental at best.

EU has to act rapidly. A strong focus is on supporting energy efficiency and local renewables, which are much faster to implement.  This is also the fastest way to reduce costs and address current energy costs.

If you think about this in the context of our energy hungry industry, I think the right conclusion would be to follow the EU direction rather than wait for the long term measures. There is nothing lost by reducing consumption and using low-carbon generation to control and reduce costs.

If you would like to discuss how to be more energy efficient and use low-carbon energy generation, please contact David Kipling, CEO – On-Site Energy on 0151 271 0037 or email david@on-site.energy (www.on-site.energy).

Do you specialise in Carbon Management? We want to hear from you!

960 640 Stuart O'Brien

Each month on Energy Management Briefing we’re shining the spotlight on a different part of the market – and in March we’ll be focussing on Carbon Management.

It’s all part of our ‘Recommended’ editorial feature, designed to help energy management buyers find the best products and services available today.

So, if you’re a supplier of Carbon Management solutions and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Lisa Rose on 01992 374077 / l.rose@forumevents.co.uk.

Our features list in full:

Mar – Carbon Management
Apr – Metering & Monitoring
May – Water Management/Strategy
Jun – Energy Storage
Jul – Data Collection & Management
Aug – Waste Management
Sept – Solar PV
Oct – Lighting
Nov – Heating & Ventilation
Dec – Onsite Renewables

Do you specialise in Renewable Energy? We want to hear from you!

960 640 Stuart O'Brien

Each month on Energy Management Briefing we’re shining the spotlight on a different part of the market – and in February we’ll be focussing on Renewable Energy.

It’s all part of our ‘Recommended’ editorial feature, designed to help energy management buyers find the best products and services available today.

So, if you’re a supplier of Renewable Energy solutions and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Lisa Rose on 01992 374077 / l.rose@forumevents.co.uk.

Our features list in full:

Feb – Renewable Energy
Mar – Carbon Managemen
Apr – Metering & Monitoring
May – Water Management/Strategy
Jun – Energy Storage
Jul – Data Collection & Management
Aug – Waste Management
Sept – Solar PV
Oct – Lighting
Nov – Heating & Ventilation
Dec – Onsite Renewables

COP26: Calls to accelerate renewable energy job creation

960 640 Stuart O'Brien

More than 130 renewable energy leaders, under the auspices of the International Renewable Energy Agency (IRENA) Coalition for Action, have launched a Call to Action for COP26, encouraging all governments at national, regional, and local levels to ensure access to high-quality, sustainable jobs during the energy transition.

Limiting the earth’s temperature rise to 1.5oC by 2050 requires a full decarbonisation of the energy sector. As such, the clean energy transition must progress rapidly. But to build a climate-resilient future, the energy transition must advance in a just and inclusive manner, leaving nobody behind.

As countries convene in Glasgow to re-align strategies and renew ambitions at the 26th United Nations Climate Change Conference (COP26), there is an opportunity to increase momentum of the global energy transition – and a transition grounded in renewable energy has been proven to generate widespread socio-economic benefits, including jobs.

“Leaving fossil fuels behind, we need to make sure that everybody can participate in a low-carbon economy. Policies are needed to make the best use of renewable energy players’ insights and best practices in driving a renewable energy market and creating adequate and equal opportunities for all,” says IRENA Director-General Francesco La Camera.

The Renewable Energy and Jobs: Annual Review 2021 report by the International Renewable Energy Agency (IRENA) finds that the renewable energy sector offered employment to 12 million people in 2020 – a steady increase since 2012 at 7.3 million. Renewable energy jobs are also more inclusive, showing better gender balance with 32 per cent women employed in the sector, compared to 22 per cent in the fossil fuels sector. These records provide a very promising insight into a clean energy future.

With the clock ticking, members of Coalition for Action urge governments to consider the following five recommended actions in their decision-making to accelerate a just and inclusive energy transition, at COP26 this week:

  • Comprehensive structural and just transition policies are critical to secure the benefits and manage labour market misalignments that result from the energy transition.
  • Concrete and resilient finance mechanisms are required for countries to equitably transition away from fossil fuels.
  • Job and enterprise creation in the renewable energy sector must be complemented with labour and socio-economic policies in the energy sector.
  • Long-term partnerships between industry, labour unions and governments are essential to ensure job security and social protection, especially in areas particularly impacted by the energy transition (e.g., coal mining regions).
  • Data-driven actions and solutions are needed to support targeted policies that encourage job creation, capacity building and reskilling to empower those disproportionately impacted, such as women, youth and minorities.

See a more detailed view of the IRENA Coalition for Action’s Call to Action for COP26.

Renewable energy employing 12 million globally

960 640 Stuart O'Brien

Renewable energy employment worldwide reached 12 million last year, up from 11.5 million in 2019, according to the eighth edition of Renewable Energy and Jobs: Annual Review 2021.

The report was released by the International Renewable Energy Agency (IRENA) in collaboration with the International Labour Organization (ILO) at a high-level opening of IRENA’s Collaborative Framework on Just and Inclusive Transitions, co-facilitated by the United States and South Africa.

The report confirms that COVID-19 caused delays and supply chain disruptions, with impacts on jobs varying by country and end use, and among segments of the value chain. While solar and wind jobs continued leading global employment growth in the renewable energy sector, accounting for a total of  4 million and 1.25 million jobs respectively, liquid biofuels employment decreased as demand for transport fuels fell. Off-grid solar lighting sales suffered, but companies were able to limit job losses.

China commanded a 39% share of renewable energy jobs worldwide in 2020, followed by Brazil, India, the United States, and members of the European Union. Many other countries are also creating jobs in renewables. Among them are Viet Nam and Malaysia, key solar PV exporters; Indonesia and Colombia, with large agricultural supply chains for biofuels; and Mexico and the Russian Federation, where wind power is growing. In Sub-Saharan Africa, solar jobs are expanding in diverse countries like Nigeria, Togo, and South Africa.

“Renewable energy’s ability to create jobs and meet climate goals is beyond doubt. With COP26 in front of us, governments must raise their ambition to reach net zero,” says Francesco La Camera, IRENA Director-General. “The only path forward is to increase investments in a just and inclusive transition, reaping the full socioeconomic benefits along the way.”

“The potential for renewable energy to generate decent work is a clear indication that we do not have to choose between environmental sustainability on the one hand, and employment creation on the other. The two can go hand-in-hand,” said ILO Director-General, Guy Ryder.

Recognising that women suffered more from the pandemic because they tend to work in sectors more vulnerable to economic shocks, the report highlights the importance of a just transition and decent jobs for all, ensuring that jobs pay a living wage, workplaces are safe, and rights at work are respected. A just transition requires a workforce that is diverse – with equal chances for women and men, and with career paths open to youth, minorities, and marginalised groups. International Labour Standards and collective bargaining arrangements are crucial in this context.

Fulfilling the renewable energy jobs potential will depend on ambitious policies to drive the energy transition in coming decades. In addition to deployment, enabling, and integrating policies for the sector itself, there is a need to overcome structural barriers in the wider economy and minimise potential misalignments between job losses and gains during the transition.

Indeed, IRENA and ILO’s work finds that more jobs will be gained by the energy transition than lost. An ILO global sustainability scenario to 2030 estimates that the 24-25 million new jobs will far surpass losses of between six and seven million jobs. Some five million of the workers who lose their jobs will be able to find new jobs in the same occupation in another industry. IRENA’s World Energy Transitions Outlook forecasts that the renewable energy sector could employ 43 million by 2050.

The disruption to cross-border supplies caused by COVID-19 restrictions has highlighted the important role of domestic value chains. Strengthening them will facilitate local job creation and income generation, by leveraging existing and new economic activities. IRENA’s work on leveraging local supply chains offers insights into the types of jobs needed to support the transition by technology, segment of the value chain, educational and occupational requirements.

This will require industrial policies to form viable supply chains; education and training strategies to create a skilled workforce; active labour market measures to provide adequate employment services; retraining and recertification together with social protection to assist workers and communities dependent on fossil fuels; and public investment strategies to support regional economic development and diversification.

Read the full report here.

IRENA lays out path to sustainable, climate-friendly growth for business

960 640 Stuart O'Brien

Accelerating energy transitions on a path to climate safety can grow the world’s economy by 2.4 per cent over the expected growth of current plans within the next decade, a new analysis from the International Renewable Energy Agency (IRENA) shows.

The Agency’s 1.5°C pathway foresees the creation of up to 122 million energy-related jobs in 2050, more than double today’s 58 million. Renewable energy alone will account for more than a third of all energy jobs employing 43 million people globally, supporting the post-COVID recovery and long-term economic growth. 

IRENA’s World Energy Transitions Outlook sees renewables-based energy systems instigating profound changes that will reverberate across economies and societies. Sharp adjustments in capital flows and a reorientation of investments are necessary to align energy with a positive economic and environmental trajectory.

Forward-looking policies can accelerate transition, mitigate uncertainties, and ensure maximum benefits of energy transition. The annual investment of $4.4 trillion needed on average is high. But IRENA says it’s feasible and equals to around 5 per cent of global GDP in 2019. 

“This Outlook represents a concrete, practical toolbox to total reorientation of the global energy system and writes a new and positive energy narrative as the sector undergoes a dynamic transition,” said Francesco La Camera, IRENA’s Director-General. “There is consensus that an energy transition grounded in renewables and efficient technologies is the only way to give us a fighting chance of limiting global warming by 2050 to 1.5°C. As the only realistic option for a climate-safe world, IRENA’s vision has become mainstream.”

“Energy transformation will drive economic transformation,” continued La Camera. “Energy transition is a daunting task but can bring unprecedented new possibilities to revitalise economies and lift people out of poverty. IRENA’s Outlook brings unique value as it also outlines the policy frameworks and financing structures necessary to advance a transition that is just and inclusive. Each country will define what is the best for them, but collectively, we must ensure that all countries and regions can realise the benefits of the global energy transition for a resilient and more equitable world. We have the know-how, we have the tools, we need to act, and do so now.”

The next decade will be decisive to achieve the Paris and Sustainable Developments goals. Any delay will drive us to the direction of further warming, with profound and irreversible economic and humanitarian consequences. 

Phasing out coal, limiting investments in oil and gas to facilitating a swift decline and a managed transition as well as embracing technology, policy and market solutions will put the global energy system on track for a 1.5°C pathway. By 2050, a total USD 33 trillion of additional investment are required into efficiency, renewables, end-use electrification, power grids, flexibility, hydrogen and innovations. The benefits, however, greatly exceed the costs of investments. 

When air pollution, human health and climate change externalities are factored in, the payback is even higher with every dollar spent on the energy transition adding benefits valued at between USD 2 and USD 5.5, in cumulative terms between USD 61 trillion and USD 164 trillion by the mid-century.

IRENA’s Outlook sees energy transition as a big business opportunity for multiple stakeholders including the private sector, shifting funding from equity to private debt capital. The latter will grow from 44 per cent in 2019 to 57 per cent in 2050, an increase of almost 20 per cent over planned policies. Energy transition technologies will find it easier to obtain affordable long-term debt financing in the coming years, while fossil fuel assets will increasingly be avoided by private financiers and therefore forced to rely on equity financing from retained earnings and new equity issues.

But IRENA says public financing will remain crucial for a swift, just and inclusive energy transition and to catalyse private finance. In 2019, the public sector provided some USD 450 billion through public equity and lending by development finance institutions.  In IRENA’s 1.5°C Scenario, these investments will almost double to some USD 780 billion. Public debt financing will be an important facilitator for other lenders, especially in developing markets. 

As markets alone are not likely to move rapidly enough, policy makers must incentivise but also take action to eliminate market distortions that favour fossil fuels and facilitate the necessary changes in funding structures. This will involve phasing out fossil fuel subsidies and changing fiscal systems to reflect the negative environmental, health and social costs of fossil fuels. Monetary and fiscal policies, including carbon pricing policies, will enhance competitiveness and level the playing field. 

Enhanced international cooperation and comprehensive set of policies will be critical to drive the wider structural shift towards resilient economies and societies. If not well managed, the energy transition risks inequitable outcomes, dual-track development and an overall slowdown in the progress. Just and integrated policies will remain imperative to realise the full potential of the energy transition.

Today’s policies, finance and socio-economic analysis completes the outlined technological avenues for a 1.5°C-comptabile energy pathway, providing policymakers with a playbook to achieve optimal results from the transition. Launched by energyleaders at the Agency’s Global High-Level Forum on Energy Transition, this Outlooks aims to raise ambition towards UN High-Level Dialogue on Energy and Climate Conference COP26 later this year. 

Read the full World Energy Transitions Outlook.

EIB pledges €3.4bn for climate action and clean energy

960 640 Stuart O'Brien

€3.4 billion of new financing has been approved by the European Investment Bank (EIB) to accelerate the shift towards renewable energy and sustainable transport, corporate innovation, improved housing, education and communications.

€2 billion to harness wind and solar power

The bank’s Board of Directors of the EIB approved financing for the development of renewable energy projects in France and Germany, the increase the use of solar power by home owners across Spain, wind power in Ireland, upgraded energy distribution in Italy, and a pioneering photovoltaic plant that uses batteries and hydrogen to store energy.

€700 million to improve public transport

The EIB also agreed to back the acquisition of a fleet of hydrogen powered trains including the installation of hydrogen refuelling facilities in the Netherlands and to upgrade regional rail services in Germany. The EU Bank also approved financing to increase use of renewable energy at airports across Spain.

€720 million for COVID-19 economic resilience, business investment and corporate innovation

As part of the rapid response to COVID-19, the EIB Board agreed new financing to accelerate investment by companies most impacted by the pandemic in the Netherlands, Belgium and Luxembourg.

The EIB also backed support for corporate research and development in Germany, expansion of online digital business activity in France, and backing for climate related investment by companies across Poland.

€837 million for education, housing, communications, water and sustainable urban investment

The EIB approved investment to construct and modernise energy efficient social and affordable housing in northern Italy, upgrade urban and regional infrastructure in the Czech Republic, and improve communications in Poland and North Africa.

Financing also went to strengthening the supply of drinking water in Paris and upgrade drinking water supply and wastewater treatment in Vilnius.

Technical education across the Ukraine will be improved by the modernisation of 13 vocational education and training centres agreed by the EIB today.

Overview of projects approved by the EIB Board

“The green transformation of the global economy gathers speed. The green energy and sustainable transport projects approved by the EIB, the EU’s climate bank, today demonstrate the vision, ambition and partnership needed to slash greenhouse gas emissions this decade and beyond. I am thrilled that this week the European Union agreed to be climate-neutral by 2050. Tomorrow President Biden will host world leaders and renew the shared determination to fight the climate crisis. The return by the US to the community of countries committed to the Paris Agreement goals and to climate action is hugely welcome news, an essential and urgent step toward multiplying the effect of individual actions through global cooperation”, said Werner Hoyer, President of the European Investment Bank. 

Do you specialise in Renewable Energy? We want to hear from you!

960 640 Stuart O'Brien

Each month on Energy Management Briefing we’re shining the spotlight on a different part of the market – and in February we’ll be focussing on Renewable Energy.

It’s all part of our ‘Recommended’ editorial feature, designed to help energy management buyers find the best products and services available today.

So, if you’re a supplier of Renewable Energy and would like to be included as part of this exciting new shop window, we’d love to hear from you – for more info, contact Lisa Rose on 01992 374077 / l.rose@forumevents.co.uk.

Our features list in full:

Feb – Renewable Energy
Mar – Carbon Managemen
Apr – Metering & Monitoring
May – Water Management/Strategy
Jun – Energy Storage
Jul – Data Collection & Management
Aug- Waste Management
Sep – Solar PV
Oct – Lighting
Nov – Heating & Ventilation
Dec – Onsite Renewables

IRENA: Tripling renewables investment ‘to reach climate goal’

960 640 Stuart O'Brien

Global renewable energy investment increased between 2013 and 2018, reaching its peak at $351 billion in 2017, according to a new report by the International Renewable Energy Agency (IRENA) and Climate Policy Initiative (CPI).

The 2020 edition of Global Landscape of Renewable Energy Finance highlights however, that while a cumulative $1.8 trillion were invested during the five-year period, the amount falls short to achieve the global climate commitments.

Renewable energy investment slightly declined in 2018, with modest growth through 2019. Although this was largely due to the decreasing costs of renewables, the total installed capacity continued to grow. The current level of investment is still insufficient however to keep the rise in global temperatures within the 1.5°C objective by mid-century. To achieve this climate goal, investment in diverse renewables technologies must almost triple annually to $800 billion by 2050. 

Ambitious commitments from governments are needed, backed by supporting measures such as moving subsidies away from fossil fuels. The report says further investments are also needed in system integration and enabling technologies that increase system flexibility such as batteries and energy storage. To that end, policies that enable the integration of new renewables capacity additions into the energy systems are needed, leading to their decarbonisation and bringing wide socio-economic benefits.

“The investment trend in renewable energy before COVID-19 was a positive one,” said Francesco La Camera, IRENA’s Director-General. “But COVID-19 has shown us that much more effort is urgently needed to put us on a climate compatible pathway and help us recover better with a sustainable, resilient economy. Decision makers must design systemic approaches to policies that encourage and speed up the flow of investment into renewables, and away from fossil fuels, and doing so enable economic growth, social resilience and welfare.” 

IRENA’s post-COVID agenda showed that average annual investments of $2 trillion in renewables and other energy transition-related technologies in the 2021-2023-recovery phase could create 5.5 million additional jobs in the sector. An additional 19 million energy transition-related jobs would be created by 2030, following average annual investments of $4.5 trillion up to 2030. 

The majority of these investments could come from private sources, if government funds are used strategically to nudge investment decisions and financing in the right direction. The capital is available, with a push from the governments to mobilise it.  Public funds are able to leverage private investments by a factor of 3 to 4 if used strategically to steer investments toward clean energy solutions and away from fossil fuels.

Greater participation of institutional investors – which hold about $87 trillion in assets – will help to reach the scale of global investment needed. To this end, it is key to promote the use of capital market solutions, such as green bonds, that address the needs of these investors. The potential role of institutional investors for the global energy transition is further explored in IRENA’s report, Mobilising Institutional Capital for Renewable Energy, published this month.

“There is a very clear need for a rapid increase of investment in renewable energy coupled with a significant reduction and redirection of investment away from fossil fuel energy,” said Dr Barbara Buchner, CPI’s Global Managing Director. “We call for more effort and coordination among policy makers, public and private finance institutions, energy and non-energy producing corporations, and institutional investors to speed up the global energy transition. This action is fundamental to a more sustainable and resilient future.“ 

This year’s joint report analyses for the first time financial commitments to off-grid renewables technologies in developing markets, as they can bring the world closer to achieving Sustainable Development Goal 7 on universal access to affordable, reliable, sustainable and modern energy by 2030. Providing cost-effective energy solutions, off-grid renewables are essential in a time when energy access is crucial to power healthcare facilities, save lives and create jobs. While investments in off-grid renewables solutions kept growing, reaching an all-time-high USD 460 million in 2019, additional capital must be unlocked especially for income-generating activities and productive uses to improve the livelihoods and resilience of billions of women and men globally and to promote socio-economic benefits. 

Looking ahead, IRENA says policy makers need to signal long-term political commitment and enhance partnerships with the private sector to boost investors confidence and attract additional private capital in the sector. To that effect, the report laid out five specific recommendations that policy makers should implement to engage private sector actors, including institutional investors, capital market players and non-energy producing companies, in the collective path to green recovery and climate objectives.

Germany ‘goes aggressive’ on renewables

960 640 Stuart O'Brien

The more rigid targets brought around by the latest revision to Germany’s renewable energy act (EEG) in June aims for the country to achieve 65%, instead of the originally targeted 50%, of its electricity consumption comes from renewable sources by 2030.

Such stricter targets would mean that, during 2021-2030, the country’s solar photovoltaic (PV) and onshore wind would need over 2GW and 3GW of annual installations, respectively – a highly optimistic target in such an uncertain scenario.

Making the targets more stringent may be in line with the broader EU green deal agenda and sustainability objectives, but such a call – made a year before elections – may be fuelled by a political motivation rather than be an achievable goal, says GlobalData, a leading data and analytics company. 

Somik Das, Senior Power Analyst at GlobalData, said: “For all of the nation’s renewable sectors to be GHG neutral by 2050, the electricity industry needs to evolve at a much faster pace than has been seen in recent years. Solar PV is now aimed to see a deployment of 18.8GW of capacity from 2021 to 2028, with planned capacity at increments of 1.9-2.8GW. However, with respect to the country’s capacity mix in 2019, Germany would need to add around 4.6GW annually to meet the target. In reality, the average solar PV annual installations are likely be around 1.4-1.5GW, according to GlobalData estimations.”

While annual solar PV installations in Germany have picked up in the last few years, onshore wind installations seemed to be on the back foot and so the faster pace required is even more questionable. 

Das added: “In order to achieve the new target, 16.7GW of onshore wind capacity is planned to be auctioned by 2025. Therefore, to meet the 2025 target, the country would need to conduct more than 4GW of annual onshore wind installations. This is a considerable stretch, as it would mean that the already slumped segment would need to install more than the 3.1GW average seen annually during 2015-19.

“Overall, GlobalData expects, with the current endeavors, generation from renewable energy (RE) is set to shape up to around 50-60% of the overall generation by the conclusion of the decade.”

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