Energy professionals convened to discuss the key drivers of the energy transition during Rystad Energy’s 2023 Energy Transition Marathon virtual event on May 9.
The session, entitled ‘What are the Key Drivers? – Incentives and Policies – Can we do Without?’ focused on the global policies and incentives that will serve as crucial catalysts for accelerating the shift towards renewable energy solutions.
Featuring the participation of Artem Abramov, Head of Clean Tech Research, and Yvonne Lam, Senior Vice President & Product Manager for Carbon Capture, Utilization & Storage (CCUS) at Rystad Energy, the session examined the strategic priorities, incentives and policies being implemented by governments and companies to standardize decarbonization efforts.
Speaking on the targets, global trade policies, geopolitical successes and challenges, and the abatement of costs in different locations across the globe, Abramov discussed the strategic priorities and tangible goals set out by international governments and many players in the oil and gas industry to transition away from fossil fuels and diversify their investment portfolios.
During his presentation, Abramov examined global energy flows – from production, conversion and transport to storage and the end use of energy – and what level of global investments in energy infrastructure will be required to power a technology-based transition from fossil fuels to renewables, which will be required to support a ubiquitous push towards a sustainable future.
“The short story here is that the outlook has been upgraded quite dramatically since the same time last year,” Abramov stated, adding, “Canada has recently joined the same train as the U.S., introducing significant incentives to support solar and wind developers. One of the challenges the industry is facing is that, in general, the rate of return is somewhat lower. Therefore, we are switching to high-risk, low-return profiles. The challenge is that this is not happening fast enough. Therefore, we need policies to help decarbonize hard-to-abate sectors.”
Meanwhile, a presentation that explored how CCUS technology can play a diverse role in meeting global energy and climate goals examined how infrastructure and policy considerations can serve to decarbonize industrial operations and help reduce global emissions.
During the presentation, Lam highlighted how large-scale injection and storage of carbon injection can achieve the ambitions of the Paris Agreement and limit future temperature increases to 1.5°C. The challenges with regards to geologic sequestration and CCUS, Lam noted however, will involve government- and industry-led support to develop cost-effective solutions and the development of methodologies for demonstrating storage integrity and dissemination of best practices.
“If we look at the scale we need to get to for CCUS projects by 2050, we need to capture about four-to-eight gigatons of CO2. This will need strong support from governments because CCUS can be a very expensive and capital-heavy technology,” Lam stated, adding, “We have seen that in the market, the project developers for CCUS are struggling to get funding from emitters because there are currently no incentives or stakes for emitters to participate in carbon capture technology.”
As such, it was noted that, as governments continue to make sustainable investments a keystone of their economic stimulus strategies, energy industry leaders are poised to continue incentivizing economic and reputational resilience while taking advantage of new technologies to accelerate towards low-carbon business practices.
Serving as a knowledge partner to the African continent’s premier investment platform for the energy sector, Energy Capital & Power, following the development of a strategic partnership agreement in early-2023, Rystad Energy’s in-focus Energy Transition Marathon event seeks to share the independent research and business intelligence company’s insight regarding energy scenarios, market fundamentals, and the outlook and prospects across the full spectrum of energy sources.