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G-20 Energy Working Group: Key Takeaways
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G-20 Energy Working Group: Key Takeaways

Member Countries recognized energy efficiency as being the “first fuel” in decarbonizing economies and highlighted a range of national policies that they have adopted in this regard

Post by ALOK KUMAR on Wednesday, February 15, 2023

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The 1st Energy Transitions Working Group Meeting concluded successfully in Bengaluru. Over 110 delegates representing 18 member countries, 9 special invitee guest countries and 15 international Organizations participated in the first Meeting. 

The India Presidency showcased its achievements in Energy Transitions and its success in providing universal energy access to clean energy to its population through various Government of India interventions such as Saubhagya, Ujjwala and Ujala schemes. India’s call for managing the demand side and promoting responsible consumption through LiFE campaign (Lifestyle for the Environment) received full support from all the participating countries.

There was also overwhelming support from the Member countries on six priority areas proposed by Indian Presidency, which included (i) Energy transition through addressing technology gaps (ii) Low-cost financing for energy transition (iii) Energy security and diversified supply chains (iv) Energy efficiency, industrial low carbon transitions and responsible consumption, (v) Fuels for Future : Green Hydrogen and Bio-fuels and (vi) Universal access to clean energy and just, affordable, and inclusive energy transition pathway.

Enhancing efficiency and bringing down cost of Electrolysers, fuel cells, Carbon Capture Utilization and Storage (CCUS), Advanced Chemistry Cells for Battery Storage and Small Modulator Nuclear Reactors, was identified as key area for international collaboration.

The deliberations resulted in consensus on inseparable importance of energy security in realizing global energy transition. It was recognized that each country will have its own energy transition pathway based on its endowment of energy sources. 

To reach a net-zero future, 90% of the worlds electricity in 2050 must come from renewables, up from 29% in 2021. Global solar and wind capacities need to grow exponentially.  Solar capacity alone is projected to grow 17 times between 2020 and 2050.  By 2050, annual battery deployment in the power sector will have to increase to more than 300GW globally i.e., 51 times the battery requirement in 2021.  Similarly, for green hydrogen, unprecedented growth is projected, where a compounded annual growth rate of 129 percent of electrolyser capacity (~850GW) is required by 2030. 

A key challenge identified was urgent need to diversify supply chains as the world ramps up building new RE generation capacities. One analysis shows that in year 2022, more than 80% manufacturing capacities of key technologies; solar PV module (~480 GW), Wind (~120 GW), Lithium-ion battery (1000 GWh), and more than 50% of electrolysers (8GW/yr) are concentrated in just three countries. In last decade, for instance, only five countries were responsible for 70 percent of global trade of solar PV materials and in area of wind power, only four exporting countries made up for 80 percent of the total trade. The manufacturing of Lithium-ion battery (LiB) is also concentrated in a few countries. Only four countries made up for 70 percent of the total trade.

Recognizing that at present RE manufacturing is highly concentrated and trade flows pose risk for energy security, the member countries highlighted the urgency to address augmenting manufacturing with a focus on local manufacturing and diversification of supply chains for key materials, critical minerals and components required for new energy systems. 

There was a huge support for promoting Green Hydrogen/Ammonia.  Some Members, in addition, proposed considering the full range of low-carbon Hydrogen technologies.

There were suggestions on the need to address private sector financing along with catalytic public sector finance to lower the cost of financing. Invitee Countries further pointed out the need for taking the requirements of the Global South into account. They also emphasized the need for governments to give clear long-term signals to encourage investments in these technologies.

Member Countries recognized energy efficiency as being the “first fuel” in decarbonizing economies and highlighted a range of national policies that they have adopted in this regard. These provided good insights on the building blocks for the expected outcome on proposing a roadmap for doubling global rate of improvement in energy efficiency by 2030. The importance of electrification of industry and transport as a means of driving green growth and green jobs was highlighted.

As per IEA reports, 75 million people are likely to lose access to electricity in the world during the COVID crisis due to issue of affordability. And for clean cooking, where we already have 2.4 billion people without access to clean cooking technologies and fuels globally, an additional 100 million who had access to clean cooking are likely not able to afford it. Members agreed that any energy transition, therefore, must ensure minimum trade-offs across SDGs, leaving no one behind.

Whereas some Member Countries pointed out the need to also recognize natural gas as a transitional fossil fuel in meeting energy security considerations, the Group agreed that wide range of fuels for the future typically encompassing ethanol to compressed biogas to green hydrogen would play much larger role in the clean energy transition.

 

(The Author is Secretary Ministry of Power)

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