Shaping Energy Transition as a Joint Effort
The Corona crisis and the unfortunate war in Ukraine are forcing Europe to move forward at a much faster pace towards resource conservation and climate neutrality: What role do investors and their desire to achieve sustainable impact play in achieving these goals? And what impact does the new situation have on the energy mix?
Christian Rom, portfolio manager of the Renewable Energy Fund at DNB Asset Management since 2010, discusses the challenges for the energy sector.
Europe's energy mix will have to be completely rearranged when it comes to ensuring the supply of fossil fuels. The impending supply bottlenecks due to possible interruptions in the delivery of Russian natural gas and concerns about the affordability of energy are currently alarming key sectors throughout Europe, from chemicals to the metal industry and glass production. At the same time, the strains from Corona and the devastating events in Ukraine are also reaching consumers, with the eurozone recording record inflation rates. The strongest driver is the high cost of energy.
Extended operating times of coal-fired power plants inevitable
This environment - Europe obtains up to 40 percent of its gas from Russia - impressively underlines the need to reduce both regional and fossil fuel energy dependencies and to really accelerate the energy transition. The current situation is also a reminder of the past, heavy dependence of the U.S. and China on the unstable East before the discoveries of shale gas and oil about ten years ago.
In order to achieve the goal of energy independence, negative effects on global emissions can be expected, at least in the short term, if outdated technologies such as coal-fired power plants would have to be used for electricity generation in Europe for longer than planned. But while it will be difficult to scale renewables, such as offshore wind, and their supply channels within at least the next three to five years, for example, due to lengthy permitting processes, a move to reduce dependencies is identifiable as a catalyst for overall accelerated decarbonization and diversification of energy supply in the medium term.
Plug Power, Vestas, Sika: These are the Game Changers
All the more reason for the motto "All hands on deck!" to apply to the entire range of renewable energies from now on. Because everything is needed - and in addition, everyone must now also do their part to save more energy. We need wind power and solar energy, biofuels, green hydrogen and modern heat pumps. We need investments in independent renewable energy producers, Independent Power Producers (IPPs), in disruptive technologies to generate and store energy, in the expansion of grids, but also in innovative products and materials, services and software to achieve greater energy efficiency.