Global Perspective: To meet increasing demand for power and expand access in underserved regions, governments must choose whether to invest in traditional or new sources of energy
The duel aims of rapidly reducing greenhouse gas emissions and providing greater access to energy for underserved regions of the world are proving to be a complex challenge in need of innovative solutions and major investment. Repeated warnings from scientists regarding the economic and environmental consequences of unabated carbon emissions have seen the topic of climate change increasingly appear on the agendas of companies and governments worldwide.
In 2018 the UN’s Intergovernmental Panel on Climate Change released a special report titled “Global Warming of 1.5°C”, which stated that global CO2 emissions must be cut in half by 2030 and reach net zero by 2050 to avoid the planet warming by 1.5°C above pre-industrial levels, an ambition set out in the 2015 Paris climate agreement. At the same time, the International Energy Agency (IEA) notes that 850m people around the world lacked access to electricity in 2019, a service that is desperately needed to raise development outcomes and transform livelihoods. As such, huge volumes of new energy infrastructure are needed.
Many developing countries find themselves at a crossroads when deciding which types of new energy infrastructure to invest in. On the one hand, conventional fossil fuel infrastructure has the backing of a well-developed industry with many skilled professionals, but its capital-intensive nature often requires a long-term commitment. Renewable energy, on the other hand – specifically off-grid solar home and mini-grid systems – offer a cost-effective, private sector-led solution that bypasses centralised grid models, effectively leapfrogging traditional stages of the energy development continuum.
Unlocking the full potential of renewable energy will be one of the central components of addressing the sustainable energy challenge. After years of development, renewables have proven themselves a viable, cost-effective alternative to fossil fuel. They are currently the fastest-growing energy source in the world, according to BP, and the company predicts renewables will make up half of the growth in global energy supplies by 2040 and be the largest source of power.