The energy transition needs solutions for all production factors

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Chief Product Officer

In terms of technology, the energy transition can be summarized in two main technological changes: the end of combustion and the electrification of “everything.” Of course, there are some production processes that are nearly impossible to electrify, so take that “everything” with a grain of salt. 

The end of combustion means, for example, switching all coal- and gas-fired power to something without fire such as wind, solar, or nuclear. This alone constitutes a complete rebuild of 80% of all global generation capacity. To electrify “everything,” that generation capacity must then be tripled or quadrupled as well. It’s a formidable task indeed, and if that isn’t enough, we have just 25 years to complete it. 

This puts a tremendous strain on resources. Any economic production system requires three types of resources or production factors: capital, materials, and labor. Studies abound on the required capital (e.g., Irena’s latest energy finance landscape) and the potential scarcity of required materials. 

Labor as a rate-limiting production factor is often overlooked, while it is at least as important and critical as the other two factors. The 25-year timeframe equals about half a generation of workers. That means that most jobs in the transition must be accomplished by people who were trained for the old, pretransition system. I know because I graduated a long time ago as a combustion engineer, working on stabilizing synthetic gas flames. Now, I’m writing about the end of combustion. 

Electrification is a key pathway to decarbonizing the global economy, and we will need a lot of electricity. The magnitude of this challenge is significant, but the grid is already well on its way to decarbonizing. Whereas just one decade ago, most generation capacity added to the grid was based on fossil fuel, renewable power now makes up 90% of new capacity added each year globally. Managing the grid while integrating intermittent renewables is one of the great challenges in the energy transition. Read our latest ebook, “The Top Technologies Enabling the Net-Zero Grid of the Future​,” which outlines the biggest challenges in moving to a net-zero-emissions power grid and identifies which technologies are best suited to solve these challenges.

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