Titled “Energy transition – Pathways to net zero”, the first session of our three-part webinar series helped set the scene by focusing on the challenges faced by the supply-side stakeholders.

The journey towards achieving a complete energy transition by 2035 will require an analysis of various interconnecting parts. This means getting different parties to work together instead of operating in silos.

Three big themes are expected to drive this transition:

• Clean energy generation will form the bulk of power generation. Scaled-up technologies like hydrogen and battery storage will help to accelerate decarbonisation to abate sectors.
• Digitalisation will act as an agent for change to give consumers access to information and control over energy use. This will facilitate the introduction and upgrading of smart utilities. New energy-related job opportunities will replace those that rely on fossil fuel-powered sectors.
• Government mandates, along with policy and regulation needs to evolve to provide market certainty for companies to accelerate investment in energy transitions.

Four levers will drive this future. These include new technology solutions, green financing mechanisms, conducive government policies and Environmental, Social and a focus on Corporate Governance (ESG).

New technologies will consist of a mix of renewable energy and hydrogen solutions connected and delivered through smart digital technology. Green financing will play a particularly critical role in enabling developing countries to progress with the implementation of their energy transition plans. Government policies will need to provide incentives and targets while a focus on ESG will provide drive and governance from the private sector.

In addition to the four levers, increasing energy efficiency will also be a key enabler in the energy transition journey. To achieve this, driving down consumption, limiting energy losses in generation and transmission as well as designing energy efficiency measures in buildings will be critical.

These key topics were central to themes that emerged during discussions at COP26, the UN climate change conference which also served as a key platform for several important announcements.

One key example of an innovative measure to facilitate the energy transition journey is the promotion of the coal retirement mechanism by the Asian Development Bank which focuses on countries in ASEAN. This example underscores that the multi-laterals have a key role in helping to de-risk investment into decarbonisation pathways and in introducing new technologies.

The Powering Past Coal Alliance (PPCA) made a complementary announcement at the Powering the World Past Coal event to indicate that they had raised the total PPCA membership from 28 to 165. These comprise of countries, cities, regions, and businesses.

With more than 160 investment fund owners, managers and banks forming the Glasgow Financial Alliance for Net Zero, the energy transition journey also received a financial boost. By committing to make available nearly US$ 70 trillion worth of financial assets, this alliance plays a key role in accelerating the greening of the global financial system. 

Another key initiative launched at COP26: the First Movers Coalition. A dedicated new platform, it encourages companies to create early markets for innovative clean energy technologies that are key for tackling climate change. It also underlines the critical role of the private sector in cutting emissions by finding innovative solutions and bringing new green technologies to the market.

For post-webinar materials, click here.

In October 2021, KPMG and Mott MacDonald hosted the second joint Energy Future webinar series titled “Green Hydrogen – pathway to net zero”.

In the Energy sector, there is widespread acknowledgement of the critical role that green hydrogen will play in the shift towards a net-zero and decarbonised journey.  For example, as part of the Glasgow Breakthrough Agenda, the Hydrogen Breakthrough initiative aims to reduce the cost of clean hydrogen by at least 50 percent by the year 2030.

Bringing together 28 companies committed to accelerating the use and production of clean hydrogen, H2Zero was another key initiative launched at COP26.  As part of this commitment, leading energy companies like BP, EDF, Iberdrola, Shell and Siemens Energy, have pledged to accelerate growth for the demand and supply of hydrogen. This includes the accelerated development and deployment of hydrogen as one of the clean energy goals for this decade.   

Our panel of experts discussed a range of points regarding energy transition and the role that green hydrogen will play. This includes its role as a primary energy carrier/vector.

Hydrogen energy provides the opportunity for industries to replace carbon-intensive commodities and ensure clean hydrogen exports. It can also help to reduce the carbon footprint of energy-intensive industries like aviation and shipping, amongst others.

While the technology to produce hydrogen energy has been around for some time, with increased scale, costs are expected to come down significantly. This will make it more commercially viable. With multilateral development banks and investment funds looking at new ways to fund hydrogen and energy transition projects, there should be a greater focus on funding worthwhile projects.

However, along with available investment capital, active collaboration across the whole sector will be needed to drive market development in the Asia Pacific market. This will also help to reduce the developmental gaps within the region which is causing it to lag behind Europe.

In addition, government mandates, policies and regulation also need to evolve to provide market certainty for companies. This will help to accelerate investments in this area, which are being accelerated thanks to the commitments made at COP26.

As a result, this will help drive investments to improve technological efficiency and the rapid adoption needed to develop a credible green hydrogen economy in the Asia Pacific.

The Green Hydrogen Catapult, a coalition of companies, has launched collaborations to boost the scale of green hydrogen deployment reach more than 45 gigawatts (GW) by 2027. According to its analysis, green hydrogen will become cost-competitive when the total market output reaches a capacity of approximately 25GW. To accelerate progress, it is hoping to target the steel and shipping sectors.

Critical steps are being taken in the maturing green hydrogen sector, for this transition to occur at the right pace. However, a clear roadmap and commitment to the alliance are also needed across public and private stakeholders.

Given the developments over the past few years, the need and the appetite for change is obvious. The first few steps of progress highlighted at COP26 have reinforced this.

The message is clear: the time for action is now.

For post-webinar materials, click here.

The third and final session of the Asia Pacific Future Energy series held in October 2021 explored the critical need for economies in the region to transition towards electrification.

Following the commencement of the COP26 conference in November that year, countries in the region pledged ambitious targets to achieve net-zero emissions.

While their commitments demonstrate a step in the right direction, significant action will be needed to meet these ambitious decarbonisation targets.

Electrification is a solution to the decarbonisation of energy-intensive operations, including those found in the industrial and transport sectors. For the decarbonisation journey to be successful, electricity has to be generated from renewable energy.

While there has been a huge shift towards the use of renewables in the electricity grid globally, most of the power being supplied to grids and networks in the Asia Pacific region presently is derived from carbon-intensive sources like coal and gas.

The message is clear: electrification is not a one size fits all solution to meet decarbonisation targets. Electricity grids too, need to incorporate decarbonisation solutions.

Therefore, the electrification of economies is a highly complex challenge. Our panel of experts discussed how countries in the region face unique challenges due to the diverse geographical, political, economic and social factors.

Parts of the Asia Pacific have ambitiously fuelled the transition to electrification through intensive government infrastructure investments, private funding for innovative solutions and progressive energy policy. Other developing countries, however, will need financial and technical support to achieve the net-zero commitments laid out at COP26. More should be done to address this area of concern given the fact that the reluctance of wealthy nations to provide financial support has been flagged as a key limitation following discussions held at COP26.

Network strengthening, enhanced storage and system integration will require considerable innovation and infrastructure investments to ensure energy security in a decarbonised future.

Equally important, is the process by which this will be achieved. While the panel expects private sector driven investments to help make the industry more robust, there is an increasing concern as to how this will be achieved and who the key players will be.

Governments, multilateral agencies, financial institutions and energy companies will play a pivotal role in this shift towards a decarbonised economy. Ultimately, this will require a combination of financial investment, progressive energy policies and industry-led action.

For post-webinar materials, click here.