Energy Transition

Here's what experts said about the energy transition in Davos

'The biggest driver of renewable energy growth today is energy security' - Fatih Birol, International Energy Agency. Image: World Economic Forum/Manuel Lope

Kate Whiting
Senior Writer, Forum Agenda
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Energy Transition

This article is part of: World Economic Forum Annual Meeting

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  • The energy crisis and how it could be resolved through the clean energy transition were in the spotlight at the World Economic Forum's Annual Meeting in Davos this month.
  • World leaders discussed everything from net-zero energy technologies and battery passports to how food, energy and climate are interconnected.
  • Here are some of the key takeaways on energy from Davos 2023.

As the first mid-winter Davos event in three years got off to a start, there was less snow on the ground as usual, highlighting the changing climate, which was top of the agenda at the World Economic Forum's Annual Meeting.

The global energy crisis has accelerated the shift to renewables, with capacity set to double in the next five years, according to the International Energy Agency (IEA).

But it's not the climate crisis that's primarily driving the transition to clean energy, the head of the IEA, Fatih Birol, told the Mastering New Energy Economics panel at Davos:

"The biggest driver of renewable energy growth today is energy security."

Fatih Birol, Executive Director, International Energy Agency

Leaders came together at the World Economic Forum's Annual Meeting to discuss the theme of 'Cooperation in a Fragmented World'.

The energy transition is central to solving many of the globe's most pressing challenges, from the climate crisis to growth, jobs and food security.

Here are some of the key sessions and takeaways on energy from Davos 2023.

For more energy insights from the Forum's Roberto Bocca, Head of Shaping the Future of Energy and Materials, and John Defterios, World Economic Forum energy fellow, tune in to the latest episode of Radio Davos, here and in the link below.

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We must close the emissions gap - together

"The battle to keep the 1.5 degree limit alive will be won or lost in this decade. On our watch," said António Guterres, Secretary-General of the United Nations in a special address.

"We must act together to close the emissions gap. To phase out coal and supercharge the renewable revolution. To end the addiction to fossil fuels. And to stop our self-defeating war on nature."

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Guterres called for G20 countries - together, the world's biggest emitters - to unite around a Climate Solidarity Pact to keep the hope of 1.5 alive, as well as for developed countries to provide financial and technical assistance to help major emerging economies accelerate their renewable energy transition.

"Our climate goals also need the full engagement of the private sector," he added, calling on businesses to embrace the Expert Group on Net-Zero Emissions Commitments' recommendations.

"The transition to net zero must be grounded in real emissions cuts – and not rely on carbon credits and shadow markets."

Upward revision to renewable capacity expansion forecasts from Renewables 2021 to 2022.
How forecasts of global renewables capacity have grown in the past year. Image: IEA

We can move at speed to secure a clean energy future

The German Chancellor, Olaf Scholz, spoke of a new Deutschland-Geschwindigkeit, a new “German speed”. Germany had become "completely independent from Russian gas, Russian oil and Russian coal" within a few months, he said, and its energy supply for the winter is secure.

"As a result, energy prices have recently seen a huge drop."

In less than seven months, Germany has built new terminals for liquid natural gas (LNG), which can be used for hydrogen in future, he added.

The past 12 months have shown business leaders, climate activists, security policy specialists and investors "the future belongs solely to renewables":

For cost reasons, for environmental reasons, for security reasons - and because in the long run, renewables promise the best returns.

Olaf Scholz, German Chancellor

By 2030, 80% of Germany's electricity production will come from renewable sources – double the current volume.

The greatest industrial transformation of our time

"In less than three decades we have to reach net zero, but reaching net zero means developing and using a whole range of new clean technologies across our economy. In transport, buildings, manufacturing and energy," Ursula von der Leyen, President of the European Commission, told Davos.

"The scale of the opportunity is clear for all to see. International energy agencies estimate that the market for mass-manufactured clean energy tech will be worth around $650 billion a year by 2030."

Europe and the US combined - through the European Green Deal and US' Inflation Reduction Act's $369 billion cleantech investment plan - are putting forward almost €1 trillion to accelerate the clean energy economy.

Von der Leyen said the European Union was working closely with the US to "ensure that our respective incentive programmes are fair and mutually reinforced" so they could "jointly benefit from this massive investment" and "avoid disruptions in transatlantic trade and investment".

And she set out the Green Deal Industrial Plan, covering four pillars: regulatory environment, financing, skills and trade.

The best transition is only as good as the skilled workers that can operate it. With the huge growth in new technologies, we will need a huge growth in skills and skilled workers in the sector.

Ursula von der Leyen, President of the European Commission

The energy transition will reshape globalization

"The effect of the energy transition is essentially to create a new set of interdependencies and they are going to be quite adventurous and definitely reach out beyond the boundaries of the European bloc and the North American bloc," said Adam Tooze, Director of the European Institute at Columbia University, in a panel discussion titled De-Globalization or Re-Globalization?

"Europe's energy transition has to be interconnected and there is a lot of extremely excited talk about the connections - about Africa for instance - which would rely on cheap solar, and most of that would come from China and the battery technologies as well.

"So I see that as one of the forces driving towards a new cocktail narrative of globalization rather than simple continuity, but certainly not a story that drives towards regionalization or a total unbundling disintegration of the world economy. It is a new set of connections, that are shaped very rapidly as well."

The top sessions on energy at Davos 2023

Reports and energy announcements at Davos 2023

At Davos, the Forum launched two accelerators – Clean Power & Delivery, and Electrification – to speed up the action needed across business and government to deliver the energy system of the future, including by addressing bottlenecks such as permitting processes.

It also launched the Transitioning Industrial Clusters towards Net Zero insight report, which highlights the experiences and perspectives of 11 industrial clusters working towards net zero. Despite facing unique geographical, infrastructure, policy and sectoral challenges, they have all developed comprehensive strategies to rapidly and equitably decarbonize their operations.

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