World Contends with Energy Transition & Transformation

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Editorial by Geoffrey Lakings for Industrial Info Resources (Sugar Land, Texas) - January 18, 2023.

The world--for obvious reasons with a war in Eastern Europe--is focused on energy security; however, there is still an energy transition and transformation deemed necessary if the world is to be a carbon-neutral, sustainable one by 2050.

World Economic Forum: What's the global energy outlook for 2023?
The world is in the midst of the first "truly global energy crisis," the International Energy Agency (IEA) said in its World Energy Outlook in October 2022. It's multidimensional - it's about more than the world's reliance on natural gas from Russia. It's about global energy security, fueling the transition to clean energy for the climate and the interconnection between the energy crisis and food security....

The challenge facing the energy sector today is how to redesign the entire system while maintaining an affordable, resilient supply that's sustainable for the planet.

Why worry about being such a carbon neutral, sustainable world by 2050? Could we not perhaps push out this seemingly arbitrary deadline to 2075 or later? Maybe this could be considered; however, there are more extreme weather events--incurring high recovery costs--occurring throughout the world. Just here stateside, there were nearly 20 such events last year.

NOAA NCEI: Billion-Dollar Weather and Climate Disasters
In 2022, there were 18 weather/climate disaster events with losses exceeding $1 billion each to affect the United States. These events included 1 drought event, 1 flooding event, 11 severe storm events, 3 tropical cyclone events, 1 wildfire event and 1 winter storm event. Overall, these events resulted in the deaths of 474 people and had significant economic effects on the areas impacted. The 1980--2022 annual average is 7.9 events (CPI-adjusted); the annual average for the most recent 5 years (2018--2022) is 17.8 events (CPI-adjusted).



But it is not just storms and their costs; for in Europe last summer--exacerbating the energy crunch and crisis--it was dealing with low water levels affecting their electricity generation.

DownToEarth: Half of Europe at risk of drought, power generation hit too
Low water levels in reservoirs has hit power production in Europe, with hydroelectric and thermoelectric operations reduced or suspended across several countries. River channels are also running low in water as a large part of the continent stands at risk for drought.

So nations met in Egypt at COP27 to discuss what was unfolding throughout the world and what type of solutions could be explored; however, needless to say it was a disappointing COP all things considered.

Forbes: COP28 Chief Outlines Climate Challenge As Countdown To 'Global Stocktake' Starts
There was widespread consternation at the lackluster COP27 climate conference in Egypt at the end of 2022, and fears that a similar lack of ambition would prevail as the journey starts to COP28, to be held in the United Arab Emirates, one of the world's biggest oil producers.

COP28 will be a significant moment because it marks the first "global stocktake", a comprehensive assessment of progress against the goals of the Paris Agreement...

"We don't need to wait for the stocktake to know what it will say," Al Jaber said. "We are way off track. The world is playing catch-up when it comes to the key Paris goal of holding temperatures down to 1.5C and the hard reality is that to achieve this goal, global emissions must fall 43% by 2030. To add to the challenge, we must decrease emissions at a time of continued economic uncertainty, heightened geopolitical tensions and increasing pressure on energy security."

What is known is that an energy transition and transformation will need lots of money if the world is to pursue a carbon neutral, sustainable world--as well as to pay for weather event related costs. A world which is really struggling--as evidenced by COP27--to get along and work synergistically together.

OilPrice: IEA ~ World Needs $4.5 Trillion Investment In Clean Energy Tech By 2030
As the world enters a new industrial age, where technology manufacturing for clean energy will lead the way, total investments in clean energy technologies and infrastructure have to top $4.5 trillion in 2030 under the net-zero emissions by 2050 scenario, the International Energy Agency (IEA) said in a new report this week.

The unprecedented scale of required investment will need industrial strategies from the countries to mobilize those investments across all regions, technologies, and supply chains. The task is enormous, and risks are also greater due to the heavily concentrated raw materials and material processing in a handful of countries, especially China, the IEA said.

And to place this investment in context--also reported in the aforementioned NOAA NCEI article, "The U.S. has sustained 341 weather and climate disasters since 1980 where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2022). The total cost of these 341 events exceeds $2.475 trillion."

So it is highly likely there will be energy transition and transformation investments throughout the world--for as one knows the US recently passed legislation to fund such.

CNBC: The U.S. passed a historic climate deal this year
The Biden administration this year signed a historic climate and tax deal that will funnel billions of dollars into programs designed to speed the country's clean energy transition and battle climate change.

As the U.S. this year grappled with climate-related disasters from Hurricane Ian in Florida to the Mosquito Fire in California, the Inflation Reduction Act, which contains $369 billion in climate provisions, was a monumental development to mitigate the effects of climate change across the country.

Fortunately, IIR's Global Market Database Platform provides extensive, unparalleled research which contains comprehensive information on capital and maintenance projects globally. With coverage spanning the entire life of the project so that one would be able to ascertain how this investment in clean energy (..& other pertinent sectors..) is being spent across the globe.

..Therefore let IIR Energy's Dedicated Market Research place the world at your fingertips.. Tomorrow's News Today.. Ask us! We have Answers!!

As your feedback is very important to us. Please let us know if we may provide additional color or answer any other market questions you may have by replying to this note.

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).