The war in Iran has provided new impetus to the low-carbon transition as renewable energy is seen as less vulnerable to future price shocks, according to a group of corporate bosses and senior bankers.<\/p>\n
The Energy Transitions Commission (ETC), whose members include executives from ArcelorMittal, HSBC Holdings and Shell, said in a new report that the current Middle East crisis highlights \u201ca structural vulnerability in the global energy system: heavy reliance on geographically concentrated fossil fuel supply and critical transit routes.\u201d<\/p>\n
By contrast, \u201cclean energy systems are structurally immune to this type of shock,\u201d the group said.<\/p>\n
The ETC, which is co-chaired by former City of London finance regulator Adair Turner, joins a growing chorus arguing the war in Iran may ultimately strengthen the case for renewables. The conflict, which has disrupted oil supply and pushed up fossil-fuel prices, has set the stage for a wave of investment as governments seek to boost energy independence.<\/p>\n
\u201cAlmost every country in the world could be energy sufficient in renewable electricity in a way that it just couldn\u2019t possibly be in fossil fuels,\u201d Turner said in an interview. \u201cThe supply of fossil fuels is extremely unequally divided across the world, and so there are some countries that get enormous fossil fuel rents, while others are big importers.\u201d<\/p>\n
Clean energy systems \u201cchange the physical and economic structure of energy supply,\u201d making them more resilient than fossil-fuel alternatives, the ETC said. While oil and gas systems \u201cdepend on continuous flows of extracted, traded and transported commodities,\u201d those built on green power rely mainly on \u201cone-off installed capital assets\u201d such as solar panels, wind turbines and batteries that, once installed, deliver energy for years or decades.<\/p>\n
In clean energy, as much as 90% of capital investment is made upfront, limiting the impact of price shocks to assets that need replacement or expansion, the ETC said.<\/p>\n
\u201cRenewables create a set of capital assets, which once you\u2019ve got them, are just not susceptible to somebody cutting off a pipeline or somebody sending the LNG elsewhere because they got a better offer,\u201d Turner said.<\/p>\n
The \u201ckey difference\u201d between the current shock and past energy crises is the \u201cavailability of readily deployable alternatives\u201d that are now cost-competitive and large enough to challenge fossil-fuel dominance, according to the ETC. Falling costs of wind, solar and batteries in recent years \u201cmake it possible for the response to the current crisis to be even stronger\u201d in pivoting away from oil and gas, the group added.<\/p>\n
And the rationale for making that shift is particularly compelling in Asian economies that are heavily dependent on energy flows through the Strait of Hormuz, the ETC said.<\/p>\n
\u201cSolar is so cheap, batteries are so cheap and EVs are getting so cheap that this is the first energy crisis where people say, \u2018but there\u2019s an alternative,\u2019\u201d Turner said.<\/p>\n","protected":false},"excerpt":{"rendered":"The war in Iran has provided new impetus to the low-carbon transition as renewable energy is seen as…\n","protected":false},"author":2,"featured_media":22733,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[7043,34,5613,14,8,449,2339],"class_list":["post-22732","post","type-post","status-publish","format-standard","has-post-thumbnail","category-japan","tag-electric-vehicles","tag-energy","tag-gas","tag-iran","tag-japan","tag-middle-east","tag-renewables"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/22732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=22732"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/22732\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/22733"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=22732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=22732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=22732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}