Investments are up but they fall short of Bloomberg’s New Energy Finance estimates of what is needed to be on track for zero carbon by 2050.
In an interesting report from Reuters and GHD, available on the Exergy website, download here, (no registration required) the following quote sums it up beautifully.
“Comparing investment in renewables with overall energy demand, the problem highlighted by BNEF is clear. Both are rising in a linear fashion—the expansion of renewables so far has been roughly proportional to the increased consumption of fossil fuels. In other words, renewables growth is helping to meet our growing energy demand, but it is not reducing the amount of fossil fuels we use—a trend which has significant effects on climate and society in the short term, and possibly catastrophic ones in the long term.”
To put the shortfall in perspective. The world will need to invest 3 times more each year for the next 20 years than it invested in 2022. There may not be enough supply chain capacity to meet this demand. But it is worse than that.
“Progress paralysis is not about money, says Gidda. “If we talk to oil and gas companies or private equity firms, the money is there,” he states. “But where are the projects that demonstrate an acceptable level of risk for the people who want to place the money, especially for projects that are at scale and involve newer technologies?”
Bottom line, the decarbonization road ahead will be bumpy and fraught with problems. These problems will translate into higher prices, greater price volatility and power outages.
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