Wed. Oct 4th, 2023
    Exploring the True Cost of the Energy Transition and Who Will Foot the Bill

    At the World Petroleum Congress, the focus on technology’s role in the energy transition brings forth questions regarding the cost and funding of this monumental shift. With soaring energy prices worldwide, decarbonizing key sectors appears to be an expensive endeavor with an unclear price tag.

    The founder and director of research of Energy Aspects, Amrita Sen, highlighted the reality of the situation: “The true cost of transition, I think the reality is it’s not going to be cheap, so why are we not talking about who’s going to pay for it?” Sen’s statement brings attention to the lack of discussion regarding the financial responsibilities of the energy transition.

    While organizations and individuals express support for the energy transition, they often do so without a willingness to cover its costs. The head of the International Energy Agency (IEA) emphasized that the projected declines in oil, natural gas, and coal consumption are insufficient to limit global warming to 1.5 degrees Celsius. This demonstrates the urgency of implementing technology-driven solutions to reduce greenhouse gas emissions.

    During the World Petroleum Congress, various technologies such as carbon capture and storage, direct air capture, hydrogen, and biofuels have garnered increased industry attention and investment. However, the funding required for their development and implementation remains a challenge.

    Less developed nations may struggle to reach the global 2050 net-zero target without significant financial support. The CEO of Repsol, Josu Jon Imaz, emphasized the need for regulatory, political, and social support to drive the company’s investment in low-carbon technologies. It is clear that finding sustainable funding solutions is crucial to ensure the success of the energy transition.

    While the exact cost of the energy transition remains uncertain, it is essential to engage in discussions regarding who will bear the financial burden. Without addressing this key question, progress toward a sustainable future may be hindered.

    Sources: Energy Aspects, International Energy Agency (IEA), Repsol