Energy Transition

The EU is looking to make its renewable energy sector more competitive. Here’s what you need to know about the global energy crisis this week

This weekly round-up brings you the latest news from the global energy sector.

This weekly round-up brings you the latest news from the global energy sector. Image: Pexels/Pixabay

Roberto Bocca
Head, Centre for Energy and Materials; Member of the Executive Committee, World Economic Forum
Stefan Ellerbeck
Senior Writer, Forum Agenda
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Energy Transition?
The Big Picture
Explore and monitor how Energy Transition is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Energy Transition

Listen to the article

  • This weekly round-up brings you the latest on developments in the global energy sector.
  • Top energy news: EU looks to make its renewable energy sector more competitive; Millions in Pakistan lose power after grid failure; South Africa looks to import energy.
  • For more on the World Economic Forum’s work in the energy space, visit the Shaping the Future of Energy, Materials and Infrastructure platform.

1. News in brief: Energy stories from around the world

Pakistan’s electricity grid collapsed because of voltage fluctuations, leaving an estimated 220 million people without power for a whole day. It was the third near-complete grid failure in South Asia in the past three months.

A bipartisan group of US lawmakers has introduced a resolution to repeal President Joe Biden's suspension of import tariffs on solar panels from four Southeast Asian nations. The move is aimed at propping up domestic solar manufacturers, which have struggled to compete with cheaper panels made overseas.

South African President Cyril Ramaphosa says his government plans to import electricity and to get more energy from renewable sources, Al Jazeera reports. It comes amid a prolonged energy crisis that has caused frequent power cuts in the country.

Plans have been unveiled for a second major hydrogen production plant in Germany. The €1 billion ($1.1 billion) facility would use solar parks to convert renewable energy into hydrogen.

Have you read?

South Korea intends to double energy vouchers to help poorer families cope with high heating costs amid a prolonged cold snap. The government says the increase in bills has been inevitable due to a near tenfold growth in global natural gas prices since 2021.

Italy plans to review and extend existing relief measures aimed at helping families and firms cope with high energy prices. It is also looking at measures to encourage savings on energy bills, Economy Minister Giancarlo Giorgetti said.

Argentina says it has agreed a $540 million deal to extend natural gas pipelines and related infrastructure linked to the country's Vaca Muerta basin. The huge shale formation is seen as key to Argentina's push to grow its economy while reducing its reliance on expensive energy imports.

The UK’s National Grid has requested coal-fired power plants to be warmed up as a winter contingency measure, as cold weather pushes up electricity demand. A scheme to pay customers to use less power has also begun.

2. EU promises more funding for renewables to narrow gap with the US

European Commission President Ursula von der Leyen says the EU plans to mobilize state aid and a sovereign fund for renewable energy companies within a new Net-Zero Industry Act, as it looks to prevent firms from relocating to the United States. Her announcement at the World Economic Forum’s Annual Meeting in Davos comes as high energy prices have led to the EU imposing revenue caps on wind and solar generators to protect consumers.

The US and Europe have both set ambitious renewable energy targets, but the financial support they are offering differs greatly, and developers in the EU are also facing permitting delays. US President Joe Biden’s Inflation Reduction Act offers tax credits to American wind and solar projects, and to related manufacturing facilities. This has made the US far more attractive for wind supply chain investments, as European countries provide no direct incentives for domestic manufacturing.

EU revenue caps have dented investor confidence in new renewable energy projects.
EU revenue caps have dented investor confidence in new renewable energy projects. Image: Reuters/WindEurope

EU state aid rules prevent countries from providing direct support to domestic companies, and the European Commission will propose to "temporarily adapt” these rules in order to "speed up and simplify", von der Leyen said. She added, "to keep European industry attractive, there is a need to be competitive with the offers and incentives that are currently available outside the EU”.

3. Indonesia to set emissions quotas for coal power plants

Indonesia aims to issue emission quotas for some coal-fired power plants by the end of January, as a first step towards creating a mechanism for domestic carbon trading. The country is among the world’s biggest greenhouse gas emitters, but has set a more ambitious target for reducing carbon emissions – by 31.89% on its own or by 43.2% with international support, by 2030. That exceeds its 2015 Paris Agreement pledge to cut emissions by 29%, or 41% with international help.

The first phase of carbon trading will cover coal power plants with a minimum 100 megawatt capacity that are directly connected to power grids owned by state utility Perusahaan Listrik Negara, according to a senior ministry official. There are 99 coal plants with combined installed capacity of 33.6 gigawatts that may join the carbon trade this year.

Power plants whose carbon emissions are below their quota can trade their remaining allotment with plants whose emissions exceed their quota. Indonesia allows direct carbon trading among emitters and authorities plan to launch a carbon exchange this year, but are yet to set up agencies that can monitor and validate emissions.

The Forum’s Coal to Renewables Toolkit looks at how to repurpose and optimize coal plants.

4. More on energy from Agenda

Energy storage is becoming increasingly important, as renewable energy cannot provide steady and interrupted flows of electricity. Here are four innovative ways we can store renewable energy without batteries.

Companies have traditionally been able to choose whether to transition to cleaner energy, or continue with fossil fuels. But in an era of volatile prices, low-cost, reliable sources such as wind and solar are becoming a more attractive option, says Sarah Golden, Senior Energy Analyst at GreenBiz Group.

It remains possible to deliver a holistic energy transition, but as events in 2022 highlighted, plans and priorities are at the mercy of geopolitics, investment decisions and economic development imperatives. This is why pragmatism, agility, ambition and a systemic approach will be necessary to reach long-term sustainability goals.

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.

To learn more about the work of the Energy, Materials, Infrastructure Platform, contact Anne Therese Andersen: AnneTherese.Andersen@weforum.org

Discover

How is the World Economic Forum facilitating the transition to clean energy?

Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Critical minerals demand has doubled in the past five years – here are some solutions to the supply crunch

Emma Charlton

May 16, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum