Energetic Transformation and The Economy

Within the last ten years, people have been continuously improving their ecological consciousness. Climate change has started to be considered with appropriate weight and urgency; humans have begun to be aware of how much water they squander, how much exhaust fumes are produced during their morning drive to work.

Finally, 'sustainable' and 'renewable' became the adjectives shaping our way into various decisions. As you can guess, those changes have not been able to bypass sectors that pose the biggest threats to our environment's wellness.

Over the last years, the global energy sector has been stepping towards harsh realization: societies are heading into the era of quitting carbon, one of the primary and most prevalent energy sources.

In December 2015, Paris was holding COP21 – the United Nations Climate Change Conference. Representatives of nearly 200 countries have agreed to put their efforts into reducing planet-warming pollution and decarbonizing the global economy. Denmark became one of the Clean Energy Transition leaders, which aims to reach the reality of a low-carbon future.

It is crucial to remark that energy markets are significantly volatile, and consumer preferences tend to vary despite our environment's state. However, since the Paris Agreement, most of the discussions about renewable energy begun, continually evolving in new dilemmas and chances.

This kind of energy has its origin in sources that are naturally replenished on a human timescale – wind, sunlight, tides, rain, waves, and geothermal heat. According to the International Renewable Energy Agency (IRENA) and the Wärtsilä organization, the most important trend shaping the energy sector in 2020 will be… yes, you guessed it right, the renewable energy.

Declining costs of essential technology, the need to reduce the global emission of CO2, and growing consumer consciousness are three horsemen of change, driving the demand for renewable energy more vigorously than ever.

International Renewable Energy estimations prove that "the share of renewables in annual global electricity generation needs to increase from 25% today to 86% by 2050" to meet the Paris Agreement's goals. Currently, planned investments measure approximately 95 trillion, compared to the necessary 110 trillion by 2050.

Bloomberg New Energy Finance estimated that wind and solar would constitute 50% of the world's electricity generation by 2050. Europe can enjoy the most optimistic prognosis, as it is expected to decarbonize at the fastest pace.

It is impossible to neglect the fact that besides opportunities, the energetic transformation also creates challenges. Especially challenges for the global energy infrastructure. A variety of changes and adjustments have been made in the electric utility business model.

Transformation costs are always a sad necessity; however, they can make room for new forms of prosperity when they have already been completed.

The International Renewable Energy Agency states that: "renewable energy improves human well-being and overall welfare well beyond GDP." According to their findings, doubling the share of renewables in overall energy usage could increase globally in 2030 by 1.1%. That equals approximately $1.3 trillion!

Agency's report "Global energy transformation: a roadmap to 2050 (2019 edition)" has found that "health, subsidy and climate-related savings would be worth as much as USD 160 trillion cumulatively over 30 years." Renewable energy improves human well-being as well as welfare.

Moreover, we shall not forget that the energy transformation could boost not only GDP but also create new jobs relieving the global labor market. According to IRENA's findings, renewables could create more jobs than the number of jobs lost in fossil-fuel industries – the renewable energy technologies are labor-intensive, generally creating more jobs per dollar invested than conventional energy technologies. The Washington Post article highlighted that approximately 260 000 Americans are employed just by the solar power industry.

Renewable energy could also increase landowner's income – for rural landowners and farmers with f. ex. the wind farms on their field – and they can effectively increase property value.

Not only does renewable energy help our natural environment and our health, but it also offers a solution for the problem of the ongoing depletion of current energy sources, which are limited.

The winners of tomorrow will be those countries that successfully manage a transition from both technological and economic sides.

Sustainable future should be our collective goal – remember, there is no business on the dead planet ;)