Time is running out to meet COP21 goals; but luckily technology will be the miracle we need to realise our clean energy future. 

“The age of plenty, the age of competition.” — This was the theme of the recent Future of Energy Summit, hosted by Bloomberg New Energy Finance (BNEF) in London. This theme highlights the fact that we are now seeing numerous examples of renewables being competitive with and often displacing fossil fuels, even in the absence of incentives. A recent boom in renewable investment and implementation is in line with the COP21 accord, with several world leaders agreeing phase out fossil fuels. However BNEF president, Michael Liebreich closed the summit by urging the industry that we are behind in reaching climate goals, and that we need to move faster– “2030 is now.”

Liebreich expounded this philosophy in a keynote speech this past April, which he begins by touting the progress we have made in decoupling emissions from economy —  fossil fuel emissions are decreasing, in the absence of an economic recession, for the first time since we started using them; coal consumption in the UK is at 1860 levels. This is undoubtedly linked to stats on renewable energy investment. Globally, renewable investments are outpacing fossil fuels 2 to 1.

While it truly is the age of plenty when it comes to cheap, abundant energy, Liebreich points out that we are seeing signs of stagnated renewable energy growth. Much of Europe is now in a renewable investment decline. Perhaps more alarmingly, in China, the first country to top 100 billion in renewable investments in a single year, declining consumption is in contradiction to increased investments. The idea that the Chinese might be over-investing is confirmed by declining capacity factors for new renewables in the country.  

While we have been globally ambitious in our goal to curb emissions, we seem to be seeing a wall in how much renewable penetration our energy sector can absorb. Emissions may be flatlining, but they are still too high. A failure to overcome this wall will result in a failure to realize our climate goals. However, a yet-to-be-identified development may be waiting in the wings to elevate is to the next step in reducing emissions. Liebreich points out that there are several potential “miracles” in the pipeline when it comes to the future of energy production.

The simplest miracle may just be the rapid advancements that we are seeing in wind and solar technology. BNEF research shows that solar technology has had a 150x decrease in price since it was first introduced to market, with seven doublings in growth in the last fifteen years. Similarly, wind has had four doublings over the same period. This is both promising and impressive, but the question of penetration remains; to this Liebreich points to the importance for new technologies, such as battery storage and “the block grid” — by which he means advancements in the digitization of energy distribution and payment methods through blockchain technology

The idea of digitization as a possible miracle in the future of carbon emissions is gaining steam in industry circles. The “spend more, get more mentality” is appearing to stall out when it comes to hardware. To clear this hurdle, we may be looking forward to the age of digital, where modern technology will be the catalyst in accelerating renewable growth and further pushing emissions reductions. The concept of block grid is powerful, but only scratches the surface of what can be achieved through investments in digital capabilities, and why IT infrastructure will play such a critical roll in shaping our energy future.