Capgemini: People critical to shift energy transition dial

The annual World Energy Markets Observatory report details the current state of energy transition, revealing that greenhouse gas emissions continue to rise

Capgemini’s 25th annual World Energy Markets Observatory (WEMO) report, created in partnership with Vaasa ETT and Enerdata, has been released and gives an update to the state of energy transition globally.

The report, published each year, takes stock of the current state of the energy transition. The 2023 report has uncovered that, despite progress being made, greenhouse gas emissions continue to increase, with the effects of climate change materialising far quicker than previously anticipated. 

It tracks the development and transformation of electricity and gas markets in Europe, North America, Australia, Southeast Asia, India and China with the rigorous analysis prepared by a global team of more than 100 experts.

“Despite progress, the world is not on the right climate trajectory,” according to Colette Lewiner, Energy and Utilities Senior Advisor at Capgemini. “Even though investments in renewable energy in 2022 reached an unprecedented high, an acceleration of clean technologies will be critical, not only to enable a shift away from fossil fuels but also to ensure energy security of supply.

Colette Lewiner, Energy and Utilities Senior Advisor at Capgemini

“What is needed to make sure the five big green energy technologies — wind, solar, nuclear, batteries and hydrogen — can meet their 2050 targets is by no means a small effort. The main obstacles are linked to financing and to the difficulty of adapting our economy quickly. Each investment decision should be taken regarding its impact on sustainability and energy sovereignty as well as affordability for citizens.”

Key trends present in Capgemini’s 2023 WEMO report

Transitioning to in-country renewable energy sources is key to safeguard energy supply against geopolitical uncertainties, the report finds, as well as the fact that renewable electricity capacity additions are driving the shift in electricity supply. 

Despite this, the current growth, however, is far below what is needed and must triple to meet 2050 targets. 

It also shares how informing, educating and enthusing people about the benefits of energy transition is critical to success. Failing to do so, the report maintains, could become the Achilles’ heel for progress worldwide.

James Forrest, Global Energy Transition & Utilities Industry Leader at Capgemini says on this point: “Accelerating the energy transition is non-negotiable if we are to meet global climate goals and at the heart of ensuring this transition is successful, is each and every citizen. The challenge we face is educating the public and shifting the perception that making energy efficient choices is unattainable for all.

James Forrest, Global Energy Transition & Utilities Industry Leader at Capgemini

“There is no question that governments and businesses have a large role to play, especially around ensuring affordability for consumers, however, without the public on board, moving the needle is going to be a lot harder.”   

On this, Capgemini’s report calls for a change in public perception which it feels is crucial in driving governments and those in power towards reform. For example, shifting the perception that the lifestyle choices needed to meet net zero goals are inaccessible to the majority on a financial basis or on the rationale the impact of one person won’t make a difference. 

This however is not the case, as the ‘EcoMode’ campaign in the UK saw households achieve a remarkable 12% reduction in energy consumption as a result of the impact of individual actions on energy efficiency and sustainability. 

Other key observations from the report include: 

  • Global renewable capacity needs to triple. While US$1.3 trillion of energy transition investments in 2022 was a record, it needs to accelerate to US$5tn per annum to align with a net zero emissions pathway.  
  • Electricity consumption will have to quadruple by 2050 to hit decarbonisation objectives, with more than 75% of it supplied by wind and solar.
  • Reaching decarbonisation goals will not happen without nuclear and so it is imperative there is a focus on extending its capacity. Nuclear capacity will have to triple by 2050 to achieve net zero carbon.

Other highlights of the report delve into future-proofing against supply impacts caused by political unrest and ensuring energy sovereignty and how energy assets adaptations are necessary to combat the impacts of global warming and exceptional weather events.

The full Capgemini report is available here.

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