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Early in August 2021, the Intergovernmental Panel on Climate Change (IPCC) released its latest report that sounded a dire warning on the impact of global warming on the Earth’s ecology and, as a result, to all living beings on the planet.

“Many of the changes observed in the climate are unprecedented in thousands, if not hundreds of thousands of years, and some of the changes already set in motion – such as continued sea-level rise – are irreversible over hundreds to thousands of years," the report said. It said that unless there are immediate, rapid, and large-scale reductions in greenhouse gas (GHG) emissions, limiting warming to close to 1.5°C or even 2°C, the benchmarks set by the Paris Accord on Climate Change will be beyond reach.

The consequences of this global warming, the report warned, are likely to be devastating – increasing heat waves, longer warm seasons and shorter cold seasons disrupted rainfall patterns leading to more intense droughts and flooding and rising ocean levels, to name just a few.

The findings of the IPCC report should not come as a surprise to anyone who has been following the debate and scientific research on climate change. For several years, in its annual Emissions Gap Report, the United Nations Environmental Programme (UNEP) has been sounding warnings. Its 2020 report said, “Global GHG emissions continued to grow for the third consecutive year in 2019, reaching a record high of 52.4 GtCO2e (Giga tons of CO2 equivalent) without land-use change (LUC) emissions and 59.1 GtCO2e when including LUC."

Among the biggest contributors to GHG emissions is the ever-increasing global demand for energy. According to estimates, total electricity production in the world was 25,865 Terawatt hours (TWh). Out of this15,756 TWh, over 60%, comes from burning of fossil fuels like coal, gas and oil. Production from renewable sources was 2,802 TWh, a little less than 11%. (This figure does not include electricity from hydro or nuclear sources – boosting either of which can lead to other issues).

Increasing focus on renewables

While the situation may be dire, the good news is that there is significant movement by governments around the world. As the UNEP Emissions Gap Report 2020 notes, “At the time of completing this report, 126 countries covering 51 percent of global GHG emissions have net-zero goals that are formally adopted, announced or under consideration. If the United States of America adopts a net-zero GHG target by 2050, the share would increase to 63 percent." (Since the publication of the report, America has agreed to this target).

The four biggest emitters of GHGs are the United States (US), China, India and EU27+UK. Governments of all these nations are ardently pushing green energy initiatives.

US: After re-joining the Paris Accord, President Joe Biden has announced his target of reducing US emissions by 50% by 2030 and transforming America into a carbon-neutral country 2050.

China: China already leads the world in installed green energy capacity. According to estimates, by 2020, China had 895 Giga watt of renewable energy capacity. The stated goal, announced by President Xi Jinping, is to convert China into a net-zero emitter by 2060. Recent reports suggest that the country is aggressively moving to achieve this target. It added 72 gigawatts of wind-power capacity last year, nearly triple the amount added in 2019. New solar-power installations went up 60% in 2020. By 2030, one-fifth of the country’s electricity consumption is forecasted to come from non-fossil fuel sources.

European Union (EU): In December 2018, the EU’s revised Renewable Energy Directive came into force. This establishes a new binding renewable energy target for the EU for 2030 of at least 32% of final energy consumption. The EU is also committed to meeting a net-zero emissions target by 2050.

India: According to the latest figures from the Ministry of New and Renewable Energy total installed renewable energy capacity in India, excluding large hydropower, has crossed the milestone of 100 GW or 100,000 MW, about 26% of the total capacity. From less than 20GW in 2010 renewable energy has grown to 96GW of solar, wind biomass and small hydro in May 2021. Including large hydropower renewables now provide 142GW or 37% of India's power capacity. Prime Minister Narendra Modi has announced his government’s commitment to install 450 GW of renewable energy by 2030. If this target is achieved the share of non-fossils in India’s electricity mix could reach 65%.

Dropping costs

Beyond the climate imperative and push by various national governments, there is another factor responsible for the increasing popularity for green energy. A decade ago, while most policymakers recognised the importance of shifting to non-fossil-based electricity production, the state of the technology meant that large-scale solar or wind energy projects were economically unviable without state subsidies. That is no longer the case.

Massive global investments in renewables technology like improvement in the efficiency of PV module in case of solar; balance of plant cost reduction; wind turbine technology improvement mainly large rotor diameters and higher hub-heights have resulted in a substantial reduction in the cost of green energy. While energy costs for wind power have dropped between 30-40%, the cost of Concentrating Solar Power (CSP) has come down by 47%.

The most dramatic reduction has been in the cost of Solar Photo Voltaic (SPV) power, which has dropped by 82%. It is estimated that USD one million invested in SPV would have generated 213kW of power in 2010. A decade down the line, the same investment is likely to give an output of 1005 kW – almost five times higher.

According to a report by the International Renewable Energy Agency (IRENA) new renewable power generation projects now cost less than keeping many existing coal plants in operation. “Next year, up to 1200 gigawatts (GW) of existing coal capacity could cost more to operate than the cost of new utility-scale solar PV," the report said.

Shifting to renewables is likely to have a significant positive impact on global GHG emissions. According to the IRENA report, “Replacing the costliest 500 GW of coal with solar PV and onshore wind next year would cut power system costs by up to USD 23 billion every year and reduce annual emissions by around 1.8 gigatons (Gt) of carbon dioxide (CO2), equivalent to 5% of total global CO2 emissions."

Another important area where lot of developments are perceived are in the area of energy storage. Batteries hold the key to moving away from fossil fuel dependence and are bound to play a crucial role in the coming decades. Over the last decade, due to extensive R&D and massive production increase in lithium-ion battery has led to 80%-85% reduction in prices, making noy only energy storage but electric vehicles are commercially viable.

TÜV SÜD has been in the forefront of this move towards providing holistic services in the green energy sector especially areas like solar, onshore wind, biomass and new technology areas like hydrogen, floating solar and offshore wind, assisting plant owners, operators, financial institutions and governments. Our services span the entire lifecycle from due diligence, feasibility and planning to procurement, construction, commissioning, inspection services to technical services which is necessary for mergers and acquisitions; plant construction, plant operation, and maintenance.

Undoubtedly the climate scenario is grim. But we remain optimistic, reposing our faith in the ingenuity and innovative capabilities of humankind. Given the growing realisation about the severity of the crisis that is leading to favorable policies and actions by the government and aided by advances in technology, our planet will overcome it and usher in a more sustainable future for all.

This article has been authored by Niranjan Nadkarni, CEO, TÜV SÜD South Asia, South East Asia, Middle East & Africa Region.

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