Companies and investors must seize the opportunities of the energy challenge
Published: April 14, 2022, 09:41Fatih Birol is the CEO of the International Energy Agency, IEA. The energy sector accounts for almost three quarters of global greenhouse gas emissions. This means that the world’s climate challenge is basically an energy challenge, which requires major joint efforts. Governments around the world must work together with each other and with companies and energy companies must be among those who take the lead.Read more about what Fatih Birol writes in “The Edit” an appendix to Vattenfall’s annual and sustainability report 2021. No individual stakeholder can do the job on their own. Governments must create the right policies and the right incentives. Companies, investors and entrepreneurs must seize the opportunities. And citizens must be active participants in the transition. This also includes how energy companies invest in new ways of producing and providing energy services, says Fatih Birol, CEO of the International Energy Agency, IEA, one of several experts writing in The Edit. It is an appendix to Vattenfall’s annual and sustainability report 2021 which gathers various interesting perspectives on the climate issue and the road to a sustainable tomorrow. analysis and policy recommendations to build a secure and sustainable energy future. The agency’s roadmap for net zero emissions by 2050 represents a narrow, but possible, path for the global energy sector to reach the critical emissions target that would give the world a chance to limit global warming to 1.5 ° C. It requires nothing less than a complete transformation of how the world produces, transports and consumes energy, says Fatih Birol, who is one of the world’s most influential people in 2021, according to the American magazine Time.
New energy economy is emerging
The result will be a clean, dynamic and robust energy economy that is dominated by fossil-free energy sources instead of fossil fuels. There are major economic benefits to being at the forefront of the transition to sustainable energies. We clearly see how a new global energy economy is emerging, led by technologies such as solar, wind and electric vehicles. So far, however, these changes are not happening fast enough to meet the world’s energy and climate goals. Not even close. Right now, emissions are even going in the wrong direction. The global economic recovery in 2021 means large increases in the use of coal and other fossil fuels. But there is hope. At the Glasgow climate conference in November, most countries made ambitious commitments to reduce their emissions to zero. This means that countries that account for 90 percent of the global economy have now set net zero targets. Commitments and commitments are of course not enough on their own implementation is the key. But commitments are central to the architecture of the Paris Agreement and therefore we should not underestimate their importance. If all of today’s net zero commitments are met, it would limit the rise in global temperatures to 1.8 degrees by the end of the century, according to IEA analysis. It is a milestone even if it is below the target of 1.5 degrees, says Fatih Birol.
The future belongs to the brave
So what does all this mean for energy companies? The electricity supply industry will be much more capital intensive. This is largely due to the large increases in renewable energy and the need for more grid capacity, says Fatih Birol. At the same time, we must become more energy efficient. This applies to everything from household appliances and cars to buildings and industries. The improved energy efficiency not only reduces energy use and prevents emissions, it also saves consumers money. Therefore, everyone must be part of this journey, together. And the energy companies must be among those who are at the forefront. The potential rewards are many and the future will belong to those who dare to take bold steps now. It is also Vattenfall’s endeavor to be there in the lead. The company has doubled its ambitions for carbon dioxide emissions by 2030 and set a new goal of reaching net zero emissions by 2040. Thus, Vattenfall has one of the most ambitious climate goals in the energy sector. We have long said that sustainability is the basis of our business and we cooperate far beyond our own sector to achieve our goals and enable a fossil-free life, says Annika Ramsköld, head of sustainability at Vattenfall. Undoubtedly, the risks of not doing anything significantly greater than being involved in leading development. Sustainable companies will continue to be significantly more valuable than non-sustainable companies. Being at the forefront and driving change therefore remains a competitive advantage, she states.Read more about what Fatih Birol writes in “The Edit” an appendix to Vattenfall’s annual and sustainability report 2021.The article is produced by Brand Studio in collaboration with Vattenfall and not an article by Dagens industri