Energy transition requires a ‘practical and realistic’ approach, Dr Al Jaber says

The energy transition requires a “hands-on”, realistic and collaborative approach to ensure it is fair and addresses the triple challenges of climate progress, energy security and economic prosperity, Dr. Sultan Al Jaber, Special Envoy for Climate Change, said on Thursday. of the United Arab Emirates.

“We need more realism about the scale of the challenge and more optimism about our ability to solve it,” Dr. Al Jaber, who is also Minister for Industry and Advanced Technology and group CEO and CEO of Adnoc, told the Bloomberg Emerging + Forum Borders 2022.

He stressed that increasing investment in the energy transition was crucial across the board, requiring input from all industries and public stakeholders.

“If people’s basic energy needs are not met, economic development slows and so does climate action. If we underinvest in today’s energy system before tomorrow’s energy system is ready, we will only make things worse,” he said.

“Globally, there is less than one and a half million barrels of oil capacity available. That’s just less than 2 percent of world consumption.

“In a world where markets may face more shocks, that doesn’t give us much room for manoeuvre. In fact, it is a recipe for disaster. What we need is more of a recipe for progress.”

Spending in the oil and gas industry took a hit during the Covid-19 pandemic along with the push by governments to transition to cleaner forms of energy.

Total investment in the upstream part of the oil and gas sector fell 23 percent below pre-coronavirus levels to $341 billion in 2021, the International Energy Forum and IHS Markit reported.

The oil and gas sector needs $600 billion worth of investment through 2030 to keep pace with rising demand, Dr. Jaber previously said.

With renewable energies such as wind and solar making up just 4 percent of the global energy mix, oil and gas remain essential to meeting global energy needs.

The expansion of renewable energies and the decarbonization of existing hydrocarbons must take place in parallel, the official said on Thursday.

Global investment in the renewable energy sector rose 11% to $226 billion in the first half of 2022 amid higher energy prices, according to a report by research firm BloombergNEF (Bnef).

Investment in new large- and small-scale solar projects rose 33 percent to a record $120 billion, while funding for wind projects grew 16 percent to $84 billion, the report added.

Renewables are expected to drive an 8% increase in global energy investment in 2022 to $2.4 trillion, the International Energy Agency said in a June report.

The energy body expects more investors to turn to clean energy amid the universal push to seek alternatives to fossil fuels.

But while global investment in renewable energy exceeded $365 billion last year, less than 5% of that amount was invested in energy storage, carbon capture and the hydrogen value chain, said Dr Al Jaber.

If we underinvest in today’s energy system before tomorrow’s energy system is ready, we will only make things worse.

Dr. Sultan Al Jaber, United Arab Emirates Special Envoy for Climate Change

“This is simply not enough. In fact, according to some industry estimates, the energy transition will require more than $200 trillion over the next 30 years, that is, more than $6 trillion each year. Clearly, no country or corporation can foot this bill,” he said.

“Much more investment is needed in zero-carbon energy and mitigation technologies that can effectively transition heavy industry, manufacturing, construction, transportation and agriculture. The funding gap here is wide and it’s important to understand the numbers.”

The UAE, as a global energy player, is “committed to the energy transition” and has so far invested $50 billion in renewable energy projects in 70 countries, with plans to invest another $50 billion in the coming years, he said. the official.

The country already has three of the world’s largest single-site solar plants and is also investing in decarbonizing the hydrocarbon industry, carbon capture and storage, as well as exploring other technologies.

“As Cop27 approaches and the UAE prepares to host Cop28 in 2023, we see our role in the UAE as a consensus builder,” said Dr. Al Jaber.

“We want to bring together all parts of the world and all segments of society to offer a practical and viable set of accessible, affordable and sustainable energy solutions that produce real results for the economy and the climate at the same time.”

The Cop28 summit will also include the conclusion of the first “Global Stocktaking” on the Paris Agreement.

As the energy transition process faces many challenges, it needs “measured, practical and sober planning,” the official said.

“In short, we need a realistic strategy to keep global temperature rise to within 1.5°C, while expanding access to affordable energy.”

Updated: September 22, 2022, 5:11 PM

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