UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.
New Energy World™
New Energy World™ embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low-carbon technologies.
De-risking green investments
9/10/2024
10 min read
Feature
Dr Valentina Dedi, Lead Economist at engineering, procurement and construction contractor KBR, explores how the right mix of supportive policies, financial mechanisms and technological innovation can de-risk investments in carbon capture, utilisation and storage (CCUS) and maximise the potential for green investments in uncertain times, while also addressing the role of oil and gas in the energy transition.
Governments around the world have acknowledged the urgency of accelerating the energy transition and prioritised capital allocation in their national and energy policies. The Paris Agreement sets ambitious targets for reducing greenhouse gas emissions and limiting global temperature rise to well below 2°C above pre-industrial levels. Meeting these targets requires an unprecedented level of investment in clean energy technologies and infrastructure.
According to S&P Global Platts, if the targets agreed by the world’s major economies under the Paris Agreement were to be met by 2050, it would mean more than $5tn in investment each year between now and 2050. To put this into perspective, this is equivalent to investing more than Germany’s entire economy every year for the next two and a half decades. This scale of investment is well beyond what government budgets can afford. Large-scale private sector engagement will be critical too, including from the oil and gas industry.
In recent years, significant capital has been directed towards energy transition projects. However, these investments have been largely constrained to commercially viable projects, primarily favouring renewable power generation, such as wind and solar. These technologies have matured and are now market-ready thanks to a continuous decline in technology costs and advances in efficiency over the past decade. While they are crucial to the energy transition, they alone cannot address the full scope of the challenge, especially in decarbonising the hard-to-abate sectors.