Russian Energy Minister Alexander Novak has opined that the pandemic has led to a greater momentum towards renewable energy, particularly among oil-exporting countries.
The energy minister stated that efforts are underway to reduce the share of hydrocarbons in the global energy mix to 74 percent from 85 percent by 2040, with a corresponding 5 percent increase of investment in green and renewable energy sources since last year.
“The time is now. The structure of our energy balance is changing,” Mr. Novak told a virtual session during Global Manufacturing and Industrial Summit. “The pandemic has influenced consumer behavior but it was already changing. Demand for oil is falling at the moment and there’s a larger portion of non-carbon sources in the energy mix,” the Minister added.
International Renewable Energy Agency (IRENA) said earlier this year that decarbonization of the global energy system away from fossil fuels to renewables could generate $98 trillion in cumulative growth between now and 2050, adding an extra 2.4 percent to the gross domestic product.
Costs of adding renewable capacity to the grid are also falling, according to IRENA, which said around half of the clean sources added in 2019 were cheaper than coal.
IRENA’s report released last week said that the rapid growth of renewable energy sources was causing major shifts in international politics. It said the rapid rise of renewables is being driven by new technologies and falling costs, making them even more competitive against fossil fuels.
Russia, the world’s second-largest oil producer, also plans to increase the share of clean energy in its grid.
“In 2014 we had less than 1 percent of our energy mix from renewables,” said Mr. Novak.
“Right now it’s around 2 percent but should come up to 4 or 5 percent. We have committed to continue that program for another 10 years until 2034 to add another 10,000MW when the cost should have come down sufficiently so that it will be competitive and no longer need to be subsidized,” he added.
There is little consensus over when the transition from fossil fuels to clean energy will take place. There are many different predictions about when global demand for oil will peak and fall away but the planners at Shell recently forecast it could happen as early as 2025.
So some oil-producing countries are playing safe and preparing for the moment when they can no longer rely on oil. They are looking to diversify their economies and find other sources of energy.
But other countries are more skeptical, trusting that demand for their oil and gas will last for some time.
When the transition to renewables takes place, countries that were previously energy-dependent will be able to produce their own power. One of the advantages of renewables is that many more countries have the ability to generate clean energy.