Renewables spurred by geopolitical upheaval, can help prevent conflict – IRENA
Clean Energy Wire: The geopolitical upheaval of recent months and years – especially the energy crisis, Russia’s war against Ukraine and the actions by re-elected US president Donald Trump – have put energy security front and centre of the debate. What does it mean for renewable energies like wind and solar electricity if the world increasingly worries about having a sufficient uninterrupted energy supply?
Francesco La Camera: These events are pushing the market to go for renewables. The war against Ukraine has not slowed down the transition, but it has accelerated it in some way. When the war started more than three years ago, it became evident that the old energy system was very vulnerable.
A more distributed system with many actors ensures more resilience, and shocks are better absorbed. This has been reflected in the amazing growth of renewables, even though it is still not sufficient compared with what we need for fighting climate change. Last year, the world installed 585 gigawatts of new renewable energy capacity.
Experts say that the energy transition will reshape the geopolitical order because fossil fuel exporting countries or major producers are set to lose power, while others rise. Do you believe this transitional phase will lead to more conflict in the mid term?
It should be the opposite. The current system might lead to more conflicts with the fossil fuel dependencies, such as the EU’s dependence on Russian gas. Imagine if Europe would have had a renewables share of 90 percent when the war against Ukraine started.
Where the market is working efficiently with many sellers and many buyers, there is less opportunity for individual sellers to influence the market, to use their power.
The geopolitical reality is changing in any case, although the energy transition might have an influence shaping it. Changes in economic realities mean that new countries become relevant in an increasingly multipolar world.
The transition could lead to more collaboration, for example on critical minerals, where reserves are spread across the globe. As more companies enter the business, they might decide to manufacture in the places where the minerals are extracted – not just importing and processing them at home. This would be a more collaborative approach. Still in a competitive environment, but more collaborative.
Trump seems to have little interest in renewables, judging by his first executive orders. Instead, he is more interested in oil and gas extraction and production. Is that just talk? Or do you think it will actually influence what the US does on wind and solar power, and what would it mean for the global energy transition?
In very general terms, electricity supply in the US is in the hands of the federal states. Texas, for example, has turned from a fossil fuel state to a renewables state. And I think that many innovations in the industrial sector are linked to the transition. Businesses in the United States want to take part in the ongoing innovation revolution. I believe that the market in a country like the US will prevail.
Internationally, of course, it would be better to have the US engage in climate policy at the UN level. That is not the case, but I think the system has the capacity to absorb that.
The global energy system will be largely dominated by renewables because it is cheaper, easier, faster and more manageable.
IRENA has emphasised that renewables investments in the G20 must double to reach the global target of tripling renewables capacity by 2030. Is that realistic in the current environment?
It is not my task to be optimistic or pessimistic. We as IRENA lay out scenarios. It is possible, and to make it happen you must be fully engaged, and we hope that the political will is there.
As the transition to climate neutrality arrives in people’s homes, with the need to switch off fossil heating and cooling systems or combustion engine cars, we have seen some pushback against energy transition policies. Trump advocates for a “drill baby drill” approach, and lawmakers in Europe want to weaken certain elements of the Green Deal. How will this influence renewables development, prices and production?
There is no doubt about the direction we are headed. The system will be largely dominated by renewables because it is cheaper, easier, faster and more manageable. Of course, it will take time to implement this new system.
The problem is that we have to face the fight against climate change. We have to do in five, six years what was going to happen in 50 years – an extraordinary challenge.
How do you see the role of nuclear energy in the transition?
Unless it is funded by the taxpayer, there will be no company ready to invest in new nuclear due to the costs. In addition, it is not useful for the energy transition, for fighting climate change, because it would come too late.
Following the energy crisis and the start of Russia’s war against Ukraine, the EU has emphasised the role of renewables in reducing dependencies and decided to speed up expansion. Has this push been successful so far? Where do you see the biggest need for further action?
Renewables capacity is steadily increasing, but what will be crucial also for Europe is the infrastructure. You can invest however much you want in renewables, but then you have to connect the systems.
Is Europe a continent that can supply all the energy it needs in the long term and in a renewable system domestically, or does it need imports?
If you connect to the grid all the Baltic and North Sea offshore wind potential, as well as make renewable energy from Spain and Portugal accessible for central Europe, then the continent can be a net exporter. If then you also push the connections to North Africa, there is absolutely no shortage.
What is the role of the Mediterranean region in the supply of Europe with green energy?
We are currently working on a report about connecting North Africa, the MENA region and Europe. What is evident is that it will not be a unidirectional flow. It is a win-win idea of an integrated market. Competitiveness in Europe will rise, and at the same time we get benefits in terms of wealth and gross domestic product (GDP) in North African countries.
The hopes surrounding planned imports of massive amounts of green hydrogen into Europe have subsided somewhat, also because cost estimates have gone up again. Is the hype over? How do you see the fuel’s role in the future?
While there are first agreements between the European Union and supplier countries like Namibia, the market is not ready in Europe. It is not yet designed to encourage the uptake. Adapting the existing pipelines from Africa from gas to hydrogen is a significant investment, so you need to be sure about demand – but this is not there today.
In any case, hydrogen markets will remain largely regional – Central America, North America, Europe, Central Africa, North Africa. The closer you are to the market, the more competitive you are, although the cost of transport is not tremendous.
