Business leaders back transition to low-carbon energy system
Energy Transitions Commission pushes for renewables to comprise almost all energy by 2030s
Business leaders from international companies including Royal Dutch Shell, General Electric, BHP Billiton and HSBC have backed a plan for a transition to a low-carbon energy system including electricity produced almost entirely from renewable sources such as wind and solar by the 2030s, FT reports.
The Energy Transitions Commission, a group of business leaders, representatives of international institutions and environmental groups, argues that it is technically and economically possible to meet the world’s growing need for energy and to limit the risk of catastrophic global warming.
But it said in a report published on Tuesday that the pace of improvement in energy efficiency and in cutting carbon emissions from energy production must be “far higher” than that achieved over the past 30 years, to meet the objective set at the 2015 Paris climate talks of keeping the rise in global temperatures “well below” 2C.
The commission includes Chad Holliday, chairman of Shell; Stuart Gulliver, chief executive of HSBC; Jean-Pascal Tricoire, chief executive of Schneider Electric; and Peter Terium, chief executive of Innogy.
Adair Turner, former chairman of the UK government’s Climate Change Committee, who chairs the commission, said the costs of renewable energy and electricity storage were falling so fast that they were likely to dominate power supplies in 20 years’ time.
The commission has estimated that in the 2030s many countries could source 95 per cent of their electricity from renewables, with batteries and gas-fired plants for back-up, at a cost of at most 7 cents per kilowatt hour. At that price, renewables would be highly competitive with fossil fuels.
“We would say you can be fairly confident of that,” Lord Turner said. “But if you ask me what I really think, I would expect the cost of renewables would be even lower than that.”
Expectations about the best ways to cut emissions from power generation had changed dramatically over the past decade, he added. In the 2000s, the consensus was that a mix of renewable energy, nuclear power and fossil fuel plants that capture their carbon dioxide emissions would be needed.
But the costs of wind and solar power and battery storage have fallen so quickly that it now looks difficult for nuclear power and carbon capture to compete, Lord Turner said.
However, the commission also found that other sources of greenhouse gas emissions would be tougher to tackle.
Passenger cars could become electric vehicles, but heavy truck transport and aviation seem difficult to electrify, as do some industrial processes such as cement and steel production.
The commission also set out possible paths for fossil fuel consumption to meet the 2C Paris objective, assuming some use of carbon capture. Coal use would have to peak in the early 2020s and then drop 67 per cent from current levels by 2040, while oil could peak later in that decade and then drop 32 per cent by 2040. In those conditions, gas demand could keep rising into the 2030s, and still be 2 per cent higher in 2040 than it is today. Copyright The Financial Times Limited 2017.
