|Introduction: Contextual introduction.|
Body: Explain some reasons behind the very slow progress of the energy transition in comparison to the technology transition.
Conclusion: Write a way forward.
Energy transition refers to the global energy sector’s shift from fossil-based systems of energy production and consumption — including oil, natural gas and coal — to renewable energy sources like wind and solar, as well as lithium-ion batteries.
There are following reasons behind the very slow progress of the energy transition in comparison to the technology transition:
- Energy transitions are not similar to technological transitions. Within 20 years, 50% of the developing world had internet access but despite all the cost reduction and policy support, wind and solar combined accounted for less than 5% of primary energy consumption.
- The world relies on fossil fuels for 90% of its primary energy consumption in 1990. Today, it was around 83%. According to the International Energy Agency, fossil fuel reliance will remain at over 60%, even in 2050, unless the world drastically accelerates behavioural change.
- The media and investors focus on solar and wind investment. But they are not focussing on the challenge of how to electrify large parts of the economy and mass electrification.
- The world at present is focussing more on the strengthening of the grid but not on energy transmission investments.
- Over the last 20 years, electricity as a percentage of energy use has risen only 2-3% in most major economies. No major economy has an electricity share of more than 20% in total energy use. Looking at the combined data for the US/Europe and China, electricity today accounts for only about 2% of the transport energy consumed.
- The US has the lowest gasoline prices of any major economy and does not seem to have the political will to put in place the tax structure needed to shift preference to EVs. Even in 2040, EVs will constitute only 40% of the vehicles on the road.
The world needs new investments to change the process and add specialised equipment for the energy transition in energy-intensive manufacturing of products such as cement, steel, plastics, chemicals and fertilisers.