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The Role of Decarbonisation in the Energy Transition – The Missing Pieces

Inclement weather, natural disasters, and a rising global temperature have consumers and policymakers across the world looking at the next big Energy Transition. This modern-day transition looks to a future run by renewables and is characterised by ‘5Ds’ deregulation, decarbonisation, distributed energy resources (DER), digitalisation, and democratisation. 

Hansen discusses the energy transition in a three-part point-of-view series – dissecting the 5Ds in part 1 and a blog series looking at each ‘D‘ individually and how they are all interconnected.  

The potential for Decarbonization of the energy sector is significant. And as the cost of renewable technologies continues to decrease and energy security concerns increase, global decarbonisation initiatives are becoming increasingly ambitious.  

The European Union (EU) has set key targets to reduce greenhouse gas emissions by 55% (compared to 1990 levels) by 20301. While the UN 2015 Paris Agreement set out an ambitious undertaking to limit global temperature increases and the European Climate Foundation raised the ambition of net-zero emissions in Europe by 20502. 

This blog looks at the role of decarbonisation in the energy transition and the important pieces required to achieve a sustainable, clean future. Decarbonisation of the energy system will require significant consumer engagement, system-wide digitisation, and regulatory reform.  

Consumer engagement is the future of energy 

The flow of energy systems has traditionally been one-way. With production at the onset and consumer consumption at the finish line. But now, we are seeing the beginnings of transition to grid systems with two-way flows of energy – that sees both consumers and commercial entities producing their own energy, while also feeding excess into the smarter grids. 

This transition towards a low-carbon economy means a growing role for renewable energy sources, greater energy efficiency and electrification of transport and other sectors. Innovations such as electric vehicles (EVs), solar power, and wind power allow community-based programs to own and operate their own energy systems – an increasingly impatient demand.  

A need for an energy system-wide digitisation 

To bring renewable energy programs to life, infrastructure systems need to become fully digital. The digitalisation of energy systems provides ample positive outcomes. Dated systems that were prone to security threats; bogged down by time-consuming, manual processes; and subject to human error in customer relations and data management are now reformed by the management of modern technologies. 

With digitalised systems, energy production and management use automated processes to increase efficiency; streamline operations while cutting costs and time-to-serve; and offer accurate, real-time data solutions. The large amounts of data now realized by a two-way flow system would be impossible to manage manually – with a digital system, this data and associated processes are streamlined and automated – producing cost-effective operations and agile go-to-market. 

Modern technology also moves systems and services to the cloud. What was once a system impeded by on-premises servers only, now has the flexibility of systems that are cloud-native, on-presmises, or a combination of both. A move to the cloud allows for a faster time-to-market, as well as increased security through frequent update releases. 

Regulatory reform 

Decarbonisation, and getting to net-zero requires every possible initiative and opportunity for renewable generated power to be made accessible to all. The current regulations regarding energy production and distribution are generally locally determined and managed.  

There are, however, international treaties that hinder the renewable energy source transition, as well. The Energy Charter Treaty – a 1990s trade and investment treaty – continues to be utilized in favour of investments over climate change initiatives. Not only costing governments millions of dollars but also preventing governments from taking “ambitious climate action”3 

The rise of the energy evolution 

As the globe moves toward a renewable future, the steps to decarbonisation need to be realised for success. Giving consumers a more meaningful role in managing their energy demand and production, transitioning to a digitalised system, and assessing and dismantling the regulatory barriers currently in place are all important and necessary pieces within the Energy Transition of the 21st century.  

At Hansen, we believe that the future is one that will rely heavily on renewables and empower energy companies to become the next digitally driven experience company with our market-leading suite for Energy and Utilities.   

To read more on the modern-day Energy Transition and predicted trends for the future, check out the Hansen Energy Transition Series 1-3. And the next blog in the 5D series – ‘Community Renewables’ – democratising access to sustainable and clean sources of power. 

1ec.europa.eu

2europeanclimate.org

3iisd.org