WEF on sustainable energy innovation | KPMG | GLOBAL
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WEF on sustainable energy innovation

Climate change and the need to accelerate

Energy is critical in solving the climate change challenge, but no quick fixes or silver bullets are in sight.

No one can deny that tackling the negative environmental effects of the global energy system has been more pressing. Energy consumption and production is responsible for more than two-thirds (68 percent in 2014) of the world's greenhouse gas emissions. Also, energy consumption and production contribute a significant share of local air pollution.

Action is required on several fronts, from scaling clean-energy technologies and energy-efficiency solutions that are market-ready immediately, to accelerating the process of innovation and bringing a much broader range of new technologies and solutions to market as soon as possible.

Indeed, nothing short of an innovation tsunami is required to achieve a 2°C rate of global warming or lower.

Greenhouse gas emissions

A few positive developments are unfolding, but progress is slow.

Over the past decade, technology innovation and a favorable policy environment have transformed the energy landscape. Renewable energy sources such as solar PV and wind are now cost-competitive with conventional sources of electricity in many markets, and scaling fast. The annual capacity addition of renewable energy sources has increased strongly since 2000, repeatedly beating forecasts.

In addition, significant potential for sustainable energy development has been identified with carbon capture and utilization, hydrogen, advanced nuclear, advanced biofuels, and energy-efficient heating/cooling systems.
However, specific technologies and smart system solutions are still required that enable these innovations to be effectively implemented.

While governments are taking action, R&D investments and the speed of innovation lag in other sectors.

Government members of Mission Innovation (MI), an alliance launched at COP21, are committed to doubling their clean energy R&D spending from US$15 billion to US$30 billion per year by 2021 and to work to make clean energy more widely affordable and scalable in the energy system. MI focuses on seven specific technology areas and cross-cutting issues to accelerate innovation.

Nevertheless, high costs, system inertia and long lead times - usually 20 years or more from idea to commercial diffusion - make it challenging for companies or governments to deliver innovation at the pace required.

In just one example, the development and installation of solar PV cells from space research to rooftops took more than 35 years. In comparison, other innovation areas such as computing and artificial intelligence, information and communication technologies etc. have evolved rapidly in a far shorter period of time.

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