DNV is ready to help accelerate the energy transition.
I really enjoyed participating at COP26, as part of the DNV team. It was noisy and chaotic both outside and inside the blue zone! Whilst there has been much progress and many pledges over the last two weeks, time remains the enemy, it is crucial these pledges are translated to legally binding NDCs (national determined contributions). Net zero 2050 was a much-discussed target but DNV’s analysis shows if we are to limit global warming to 1.5°C, we need to be cutting greenhouse gas emissions (not just methane) by 30% by 2030.
If time is our enemy, then technology is our friend. We need to flip today’s 80:20 (fossil/non fossil) energy system to 20:80 by 2050, reducing dependence on first coal then oil and gas. We have the clean technologies, but we need to massively scale up electrification through renewables – solar and wind. It was good to discuss with Carla Denyer, from the UK Green Party, how government must speed up development of wind farms, ~7 years is too long.
For the hard to electrify sectors – shipping, aviation, heavy industry, heavy transport, and industrial heating – an alternative path to net zero is needed. I was pleased to talk at a Global Wind Energy Council event on the critical role that hydrogen will play for these sectors. In the 1.5°C scenario, DNV forecasts that almost 15% of energy demand will be met by hydrogen together with 20% of net zero decarbonization will rely on carbon capture for fossil produced CO2.
The role of finance was also much discussed and there is a clear disconnect between clean projects searching for funding and the risk appetite of capital markets for these investments. The incentive and subsidy frameworks for energy across the world are very messy and governments need to provide a more consistent approach together with a credible carbon price – DNV’s analysis shows at least an USD 80/tonne is needed for 1.5 degrees.
It is an affordable transition at 1% global GDP, especially when the consequences of climate change could wipe of 18% of global GDP! A just transition also needs the developing world to honour its commitments in climate finance, starting with USD 1 billion a year to the developing world.
1.5°C is still alive, just, but we all need to do so much more… DNV is ready to help accelerate the energy transition.