22 October 2018

Challenges and Prospects for Energy Transition

In 2017 a record-high $300 billion was invested in renewable energy sources worldwide (compared to $700 billion for oil and gas). Energy production is gradually but steadily shifting to more renewable sources. The report by the German Institute for International and Security Affairs (SWP) investigated the mid- and long-term implications of what is considered to be a systemic shift - in many realms and of global proportions.

The study highlights how the decarbonisation of energy production, namely the shift from fossil fuels to renewable energy sources, will provide new challenges for both internationally and nationally (like aligning energy grids) and demand for sectors to cooperate to optimise energy consumption and efficiency (integrating for example house heating, mobility and energy production). The authors argue that a security dividend will be seized in terms of improved national and international security coming from localised energy production, considerable economic gains ($1.8 trillion in climate investment and green growth alone) and a significant slowing of climate warming since energy production accounts for two-thirds of all global gas emission.

New challenges will also emerge in relation to four other major factors: geographic location, political will and ambitions, national preference of energy mix and approaches in the mobility sector. Stability of energy grids and cyber security are future issues to be considered, like the control and management of data flows, technology and supply chains, etc. The uneven development of green technologies, competitive approaches to protect renewable energy technology and the establishment of regional energy blocks are problematic. They go into the opposite direction of what is needed to insure a smooth and fair distribution of this new type of resources and the technology needed. The findings of this study highlight how international cooperation, easiness in technological transfer under a liberal trade regime are key to achieve a successful energy transition.

One of the focus-themes of The Planetary Security Conference in February 2019 is the geopolitics of energy transition and the implications arising from it.