RENEWABLE energy is a game changer for energy security amid volatile geopolitics, according to a report published by the International Renewable Energy Agency (Irena) yesterday at its 14th Assembly in Abu Dhabi, United Arab Emirates.
The report, Geopolitics of the energy transition: Energy security, outlines a multi-dimensional energy security concept for the 21st century, which finds that renewable energy could be seen as an avenue toward resilience, energy independence and sovereign control.
It comes at a time concerns regarding a potential escalation of tensions in the Middle East are dominating global markets. Brent crude prices fell 0.5% to $89.60 (R1702) a barrel in morning trade yesterday, but markets are keeping a close eye on how Israel might respond to Iran's weekend attack.
Irena Director-General Francesco La Camera said: “The energy system is undergoing a profound transformation, and renewables are bound to bring greater resilience through decentralisation and greater reliance on domestic sources.
“It is vital to proactively shape this resilience with foresighted policies and investments ... The evolving energy system calls for a security strategy that integrates environmental concerns, economic trends and social ramifications. Technologies, not fuels, are the centrepiece of the new energy system.”
This after the energy crisis of 2022 marked a turning point in the global energy discourse.
“In the wake of the Covid-19 pandemic, as governments sought to stimulate economic recovery, energy demand surged. At the same time, other challenges emerged, encompassing supply chain disruptions, geopolitical tensions, and changes in energy policy, exacerbated by the lasting effects of the pandemic.
“The intentional disruption in energy trade between Europe and Russia immediately prior and since the beginning of the war in Ukraine placed immense strain on Europe’s energy sector,” it said.
The report noted that while geopolitical factors – such as market manipulation, choke points, and infrastructure disruptions – remained relevant, their impacts were expected to be less severe in a renewable energy landscape.
Fuel shortages, competition for limited resources, inflation, rising food costs and increased living expenses worldwide had rippled through sectors and geographies, suppressing or even reversing previous advances and widening the gap between “haves and have-nots”.
Under Irena's World Energy Transitions Outlook, renewables would comprise three-quarters of the global energy mix by 2050. Electricity would become the main energy carrier, meeting more than 50% of consumption by 2050.
Cross-border trade in electricity would rise in prominence, fostering mutual benefits, in contrast to the asymmetric dependencies of the oil and gas sector.
Transmission cables could unlocked export potential for countries that currently export no power, including Cyprus, Indonesia, Nigeria and Sudan.
“One recent modelling exercise shows that China could conceivably become the world’s largest electricity exporter by 2040, with its 2040 exports representing almost 20% of today’s global electricity demand,” the report noted.
However, the report said a potential risk to stability of the energy transition was the current concentration that was observed along value chains, which was leaving developing nations on the backfoot, which needed to be addressed.
Concentration was observed along value chains. A substantial portion of renewable energy patents were registered in China, the US, Japan, Australia and the Republic of Korea. This trend was mirrored in current renewable energy manufacturing, with China dominating 70% of the photovoltaic cell production market.
International financial flows to developing countries was needed to support developing nations as regards research, development and production of renewable energies.
“Regional disparities in renewable energy deployment illustrate a dual trajectory in ongoing energy transitions. Many developing countries lack access to the necessary technologies and financing to provide energy services to their populations. For example, despite its vast potential, Africa accounts for only 1.6% of the global share of renewable capacity.
“This issue extends beyond the energy mix; it reflects the inability to leverage the expansive job market and new economic opportunities that renewable energy presents, opportunities that are readily available to countries with access to technology and finance,” it said.
Consequently, the report found that many developing countries predominantly served as consumers of clean technology rather than as innovators or manufacturers
“Despite this importance, there is a substantial deficit of support, with the flow of finance decreasing in recent years. In addition to being a matter of equity and fairness in the energy transition, this deficit influences geopolitical dynamics and poses potential risks to stability,” it said.
The report noted that in the global south (which South Africa belongs to) measures to protect supply chains and expand access to technology must be central parts of energy security frameworks.
“As a result, fostering supply chain resilience will be imperative for both developed and developing countries to ensure guaranteed access to essential technology,” the report said.
BUSINESS REPORT