The energy transition refers to the shift from relying primarily on fossil fuels for energy to using renewable and cleaner sources of energy such as solar, wind, hydropower, hydrogen and geothermal. The transition is driven by several factors, including the need to reduce greenhouse gas emissions and address climate change, as well as the benefits of enhanced domestic energy security.
The energy transition involves changes not just in energy production, but also in energy management, storage and consumption. It requires a mix of energy efficiency measures and smart demand side flexibility, alongside the development of new technologies and storage systems to support the integration of renewable sources into the energy mix. This transition process is ongoing, and will likely take several decades to complete. However, the rapid pace of technological progress and the increasing affordability of renewable energy are contributing to the acceleration of the energy transition, making it an exciting and dynamic industry.
The energy transition affects the entire industry, with particular growth of these three sources:
1. Wind energy
Global installed wind power has grown rapidly since 2000, with onshore farms in 115 countries and offshore wind growing as it becomes more cost effective. Both types have tremendous potential for greater deployment and improvement, to help governments and companies decarbonise and meet net zero goals. Wind energy represents a fast growing share of renewable energy produced. In the UK alone, in 2022 wind farms produced 74 Tw/h, enough energy to power 19m homes. The sector anticipates continued growth globally, with 8000 TW/h annual generation needed if the world is to reach net zero. Arup is working with wind farm operators to drive down operating costs, extend asset life and optimise performance.
2. Solar energy
Solar technologies convert sunlight into electrical energy either through photovoltaic (PV) panels (implemented at either utility or commercial/residential scale) or through concentrated solar power facilities, that capture thermal energy to produce electricity through a generator. The economics and effectiveness of solar have been becoming more attractive in the last decade, although the industry still faces challenges in terms of integration with existing grids.
At Arup, we’re supporting governments and cities across the world from Sydney to Durban exploring how solar can become a critical part of the energy transition.
Hydrogen is another fuel being explored as a possible alternative to fossil fuels. ‘Green hydrogen’ is produced through electrolysis using renewable electricity and produces zero emissions when used as a fuel. However, at present most hydrogen produced is a by-product of natural gas production, (so-called ‘grey’ or ‘blue hydrogen') and as such doesn’t represent a fully green energy solution. The lack of a transmission network for hydrogen gas is another major challenge to be addressed before it can become a rival to wind or solar. Though the fuel is being used in some transport contexts including trucking and buses, it hasn’t yet achieved significant scale.
Generating power from these three sources is only part of the energy transition. Development of electric transportation infrastructure and energy storage, coupled with greater usage of digital technologies to manage energy use more efficiently, are also part of the change.
Charge4Fleets is a ready-to-use suite of digital solutions that provide industry leading analyses to streamline the conversion of vehicle fleets to all-electric, reducing cost and risk while speeding an orderly transition.
What will accelerate the energy transition?
What will accelerate the energy transition? In this episode of Sustainable Forces, we chat to Russell Tham, Temasek’s Joint Head, Enterprise Development Group and Head Strategic Development, and Poya Rasekhi, our Energy, Water and Resources Leader in Australasia. Learn the opportunities and risks in the energy transition, how you can accelerate your energy ambitions, and how we can create meaningful change together.