Renewables Industry Starts To Grapple With The Geopolitical Impact Of Shift To Green Energy

The International Renewable Energy Agency (IRENA) – an industry body which counts more than 150 governments as members – has  set up a commission to look into the geopolitical impact of the shift away from oil, gas and coal and towards renewable energy. It is the latest sign of a new seriousness in the green energy industry, which is growing fast and expected to continue doing so in the coming years.

The Global Commission on the Geopolitics of Energy Transformation was launched on January 14th in Abu Dhabi, during IRENA's annual summit in the city where it is headquartered. The new group will spend a year looking into issues such as the international supply chain for rare earth minerals and other commodities used by the renewables industry, as well as cross-border electricity trading and the potential for political instability – both in countries that find their oil and gas supplies are in less demand and those which become the focus of competition for newly-popular resources.

“There is a very fundamental energy transformation afoot,” said Adnan Amin, secretary general of IRENA, at the launch of the commission. “That energy transformation is increasingly rapid, it’s disruptive, it provides both opportunities and challenges and it’s unstoppable. It’s going to change the face of energy.”

The geopolitics of oil and gas has long been a topic of widespread discussion, but until fairly recently the international political consequences of the rise of renewables has been largely overlooked. That is starting to change. In March last year at a workshop in Berlin, IRENA presented a paper on ‘The Geopolitics of Global Energy’ which looked at some of these issues – the research had involved the Norwegian and German governments as well as Harvard and Columbia universities in the US.

The topic has also featured at another event in Abu Dhabi this month, at the Global Energy Forum.During discussions there, retired general James Jones, interim chairman of the Atlantic Council think-tank, remarked that "the world is changing at a rapid and unprecedented pace. With these shifts, we have seen an emergence [of] new geo-economic and geopolitical dynamics.”

The rising prominence of such discussions has been prompted by expectations that renewable energy may be on the cusp of significant growth in the years ahead as countries take advantage of sharply falling costs. This process is happening alongside other notable trends such as greater energy efficiency and the rise of electric cars.

While the hydrocarbons industry will still have its strengths – not least in terms of providing fuel for shipping and aviation – there is likely to be an erosion of influence for the oil and gas industry and for the countries which count as hydrocarbon heavyweights, not least those in the Middle East.

IRENA’s new commission, which will be chaired Olafur Grimsson, a former president of Iceland, is designed to move the discussion further along. It is being supported by the governments of Germany, Norway and the UAE and will look at short-term and long-term consequences of the global energy transformation. It is due to present its report in January 2019.

Among the issues likely to be examined by the new group are changing patterns of trade, with the possibility that electricity networks will in time become the principal conduits for cross-border energy transfers, rather than the oil and gas pipelines and tankers which fulfil that task at present. Investment patterns will also need to adapt and there will be new aspects to the idea of national energy security, with access to rare earth minerals – a sector that is currently dominated by China – perhaps becoming a critical issue.

 

Source : https://www.forbes.com/sites/dominicdudley/2018/01/14/renewable-energy-geopolitical-impact/#5c1a48a2f49b

Smart Grid Bulletin June 2018


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