14.10.2021 – 08:42
The energy and utilities industry is accelerating its transformation to reduce carbon emissions while providing affordable energy and ensuring business continuity
Increasing energy consumption and higher greenhouse gas emissions illustrate how important realistic, affordable plans are to accelerate the energy transition. An essential contribution can be to use scientific methods and data to measure the development of companies towards Net-Zero and to achieve concrete effects. This is the conclusion of the 23rd edition of the annual World Energy Markets Observatory (WEMO), who analyzes the state of the energy transition and the fight against global warming to date. The authors of Capgemini examined – in collaboration with By Pardieu Brocas Maffei, Vaasa ETT and Enerdata – also the development of the leading industry players and forecast essential trends of the future. The report looks at the electricity and gas markets and technologies in North America, Europe, Asia and Australia.
“We need solid solutions with which we can reduce greenhouse gas emissions even when the demand for energy rises. Growing electrification will require two to three times the current capacity by 2050. In order to curb climate change, the further decarbonization of electricity generation is urgently required Investment must accelerate the energy transition and lead to a measurable decrease in emissions “, says Guido Wendt, Head of the Energy & Utilities Germany Sector at Capgemini Invent.
The main results of the WEMO are:
- The spot markets for electricity are at a record high. This is due to the unchecked demand, the lower margins in the generation capacities, the increased gas prices and – in Europe – the high CO2 prices.
- The supply of electricity from renewable energies has increased, while the cost of renewables has continued to decrease in 2020. Both solar and wind energy capacities increased in 2020; they make up 10 percent of the power generation market. The decline in costs could be reversed in 2021 and beyond, as the prices of critical metals, equipment and transportation, as well as interest rates, rise.
- The dynamism of green hydrogen is growing – it has the potential to decarbonise another 15 percent of the global economy. Green hydrogen is around three times as expensive as hydrogen from fossil fuels. However, falling costs for renewable energies and electrolysers could lead to a price convergence by 2030.
- Competition in the electricity and gas retail markets increased again at the beginning of 2021, but the high energy prices are currently leading to consolidation. Utilities proved financially resilient in 2020. Oil and gas companies were harder hit, but many of them, too, have since recovered due to increased demand and higher prices for oil and gas. Under pressure from stakeholders, the large oil and gas companies have pushed ahead with their diversification in the electricity, renewable energies and e-mobility sectors and reaffirmed their self-commitments to be carbon neutral – especially the international oil companies in Europe.
- The actors in the energy and supply sector are striving for rapid decarbonisation and are using the energy transition to develop new concepts and reinvent themselves in a value-adding way: They digitize and rely on low-carbon technologies. Many try to find the balance between meeting stakeholder expectations and transforming business in highly competitive markets.
- The call for clean technologies, which are essential for the energy transition, is getting louder and louder. However, pursuing this goal must not go hand in hand with compromising on the security of energy supply and the affordability of energy.
“The strategies of global companies to achieve their net zero emissions targets should be based on indisputable scientific measurement methods and valid data that take into account all greenhouse gases. Real sustainability requires that the entire life cycle of energy generation and use be considered climate-damaging emissions arise “, says Guido Wendt. “It remains a great challenge to achieve the availability of renewable energy and a price level that is acceptable for everyone. If that does not succeed, energy becomes a socio-political issue.”
In order to achieve the climate goals and at the same time guarantee security of supply and affordability for society, the WEMO makes the following recommendations:
- Establishing ambitious but realistic plans for the energy transition, taking into account the time it takes for societies to adapt, their industries and the lifestyles of their people.
- Accelerate research into low carbon technologies (solar and wind energy, electric batteries, green hydrogen) and remove administrative barriers to the construction of renewable energy plants.
- Measure the effectiveness of actions taken. Financial institutions should establish standardized non-financial criteria that enable a comparison of the efforts made by companies.
- Focus on cybersecurity: Smarter systems, especially smarter power grids, are required to accommodate a high proportion of renewable energies. However, this is associated with an increased cybersecurity risk as more devices are connected to the networks.
- Implementation of adaptation measures to cope with the delay in achieving the climate targets.
Der World Energy Markets Observatory is an annual publication by Capgemini. It monitors key indicators of the power and gas markets in North America, Europe, Asia (including China and India) and Australia. The 23rd edition, which is mainly based on public data combined with Capgemini’s expertise in the energy sector, refers to data from 2020 and the first half of 2021. Research teams from De Pardieu have additional expertise on regulation and customer behavior as well as market data Brocas Maffei, VaasaETT and Enerdata brought in.
More information as well as the full World Energy Markets Observatory are available at this link ready for you.
Capgemini is one of the world’s leading partners for companies in managing and transforming their business through the use of technology. The group is driven every day by its purpose to promote the development of human potential through technology – for an inclusive and sustainable future. Capgemini is a responsible and diverse organization with a team of 290,000 employees in almost 50 countries. A company history spanning more than 50 years and in-depth industry know-how are decisive factors that customers trust Capgemini with the entire spectrum of their business requirements – from strategy and design to business operations. The company relies on the rapidly developing innovations in the areas of cloud, data, AI, connectivity, software, digital engineering and platforms. The group’s turnover in 2020 was 16 billion euros.
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Kora Alice Lejko
Capgemini Germany | Frankfurt
Tel.: +49 151 4025-1298
Email: [email protected]
Original content by: Capgemini, transmitted by news aktuell