- Renewable Energy
- Low Carbon
- Net Zero Energy Consumption
- Energy Industry
Heralding an Era of Renewable and Low Carbon Energy
In a recent announcement, bp has set out a strategy to realign itself with pursuing a net zero ambition. In a press release on August 4, 2020, it introduced its intent to evolve from an international oil company focused on producing resources to an integrated energy company focused on delivering solutions for customers. This strategy would be implemented while integrating a portfolio of low carbon technologies, including renewables, bioenergy, hydrogen, and carbon capture storage/utilization. While these actions would result in a systematic reduction in bp’s hydrocarbon portfolios, its remaining interests in hydrocarbons will likely be more carbon resilient.
Usage of Clean Energy Resources Is Expected to Increase
Investments in clean energy resources are anticipated to continue expanding across mature and emerging economies. Legislative pushes toward an ambitious green economy and sustainability measures are being supported by the International Energy Agency and the European Commission’s Green Deal. Cost reductions and technological investments in renewables are unlocking huge opportunities for energy transitions. One of the most well-known clean energy strategies, the deployment of wind and solar PV, is expected to provide more than half of the additional electricity generation in 2040, up from one-third in 2019. The share of renewable energy generation in the global fuel mix has largely increased. While some strategies focus on renewable technologies supported by energy storage and demand flexibility, others may deploy low carbon resources such as nuclear, hydro, geothermal, bioenergy, and carbon capture to achieve their emissions targets.
Share of Renewables in Power Generation in the Sustainable Development Scenario,
(Source: International Energy Agency)
While low carbon energy resources are not immune to challenges, they are expected to grow steadily over the longer term given current market conditions. At the center of this changing energy ecosystem lies changing customer preferences. This fact has been proven by the rapid adoption of distributed energy resources (accelerating at a compound annual growth rate of 10.3% until 2030) and clean technology resources by residential, commercial, and industrial consumers. This rapid adoption has blurred the demarcation between producers and consumers. Policymakers will need to acknowledge and support much-needed market developments to encourage accelerated deployment in renewable and low carbon energy resources in the long term.
bp’s announcement reiterates the fact that large energy providers are keen to transition toward climate neutral and low carbon resources. Supported by regulatory mechanisms; feed-in tariffs; renewable portfolio standards; tax rebates; capital grants; lower permitting barriers; digitization; and clean energy auctions, investment in low carbon technologies will likely continue to accelerate.