- This round-up brings you the latest developments in the global energy sector.
- Top energy news: Renewable energy stocks are struggling; Southeast Asia nations to share power with regional grid; $4 trillion needed every year to reach net zero by 2050.
- For more on the World Economic Forum's work in the energy space, visit the Centre for Energy and Materials.
1. Renewable energy stocks are struggling
Renewable energy stocks have been hit hard in recent months, performing significantly worse than fossil fuel companies due to higher interest rates.
The S&P Global Clean Energy Index, comprised of 100 major solar, wind power, and other renewables-related companies, has dropped 20.2% in the past two months, according to the Financial Times.
This puts it on track for its worst performance since 2013. In contrast, the oil and gas-heavy S&P 500 Energy Index has seen a 6% increase. Despite governments offering billions in tax credits and subsidies, the renewable sector is struggling.
Rising interest rates have made it difficult for companies to manage long-term contracts and higher costs. Additionally, borrowing has become more expensive to service.
The International Energy Agency (IEA) says it expects global power capacity to jump by over a third this year, driven by policy momentum, higher fossil fuel prices and energy security concerns.
2. Southeast Asia nations to share power with regional grid
Southeast Asian nations are feeling the urgency to switch to clean energy to combat climate change. As a result, a 20-year-old plan for the region to share power is being revitalized, according to AP news.
Malaysia and Indonesia have recently signed an agreement to study 18 potential locations for cross-border transmission lines. These lines could generate power equivalent to that of 33 nuclear power plants in a year.
Beni Suryadi, a power expert at the ASEAN Centre for Energy, has stated that these power links are economically and technically feasible, and are now supported by regional governments. The ASEAN, which consists of 10 countries across the Southeast Asia region, is both a political and economic gathering.
The plan for a regional grid among the ASEAN members was conceived 20 years ago but faced obstacles such as technical barriers and political mistrust. However, the region now recognizes the urgency due to climate change and increasing electricity demand. An interconnected grid is seen as crucial for transitioning away from fossil fuels.
3. News in brief: More energy stories from around the world
Investors have been told that over $4 trillion per year is needed for the next 30 years to achieve net zero by 2050. Arun Majumdar, Dean of Stanford University's school of sustainability, calls it the defining challenge and opportunity of the 21st century, writes Top1000Funds.com. However, Greg Jackson, CEO of Octopus Energy, believes this is only possible with the establishment of a revolutionary global energy grid.
France and eight other European nations have proposed a plan to resolve the deadlock over state support for extending the life of ageing nuclear reactors. The resolution is important for the comprehensive redesign of the EU's electricity market, as the bloc aims to enhance its energy security and transition towards renewable energy, Bloomberg reports.
Carbon emissions from the global electricity sector could peak this year, following a period of stability in the first half of 2023. According to a recent report on global electricity generation, the rapid growth of renewables is approaching the necessary pace to triple capacity by the end of the decade, UK newspaper The Guardian writes.
European carmakers are being urged to invest in Australia's critical raw materials. The country's minister for resources, Madeleine King, emphasized the need for action to capitalize on Australia's vast mineral reserves. Australia is a major supplier of lithium, used in batteries, and is also a significant exporter of rare earth oxides for technologies like electric cars and wind turbines.
Pakistan’s National Electric Power Regulatory Authority Chairman Waseem Mukhtar has emphasized the importance of affordable energy for exporters to boost economic growth, writes the Express Tribune. Mukhtar also highlighted the need for investments in a reliable energy supply and transmission system.
Chile's President, Gabriel Boric, has announced plans to introduce a bill for a tender mechanism to facilitate large-scale renewable energy storage facilities. The proposed energy storage projects will be strategically located in multiple sites across northern Chile, where the majority of solar and renewable energy power plants are situated. The total investment required for these projects is estimated to be $2 billion.
Utility firm Kenya Electricity Generating plans to build a 1,000-megawatt wind farm, which will be the largest in Africa when it connects to the grid, sometime in 2028. Currently, 92% of Kenya's power comes from renewable sources, and the country aims to reach 100% by 2030.
The Renewable Energy Forum Africa is underway in Nairobi, Kenya. The forum attracts policymakers and influential energy sector decision-makers to mobilize investment projects in renewable energy across Africa. Topics of discussion include Africa's role in the global green hydrogen race, market opportunities for green hydrogen in Kenya and East Africa, financing solar solutions in Africa and e-mobility technology.
4. More on energy from Agenda
Fossil fuel workers have the skills to succeed in green jobs, but location is often an overlooked barrier to a just transition, according to new research in Nature Communications. How can fossil fuel workers be supported in transitioning to green jobs?
Biogenic CO2 can be combined with green hydrogen to produce electro-fuels, and could provide carbon-neutral energy for hard-to-abate industries, writes Emil Vikjær-Andresen. Here's how CO2 is a solution to the climate crisis (provided it's of the green and leafy kind).
The IEA's Net Zero Roadmap shows limiting global warming to 1.5°C is still possible, but investment in clean energy needs to reach $4.5 trillion per year by 2030, writes Cristen Hemingway Jaynes, environmental journalist for EcoWatch.
To learn more about the work of the Centre for Energy and Materials, contact Ella Yutong Lin: firstname.lastname@example.org