The energy transition represents a fundamental process through which societies are gradually shifting from conventional energy sources, such as coal and oil, to more sustainable and low-carbon sources, such as renewable energy and energy efficiency strategies.
This transition is driven primarily by the need to address challenges related to climate change, energy security and public health, as well as the search for new economic opportunities and technological development.
In line with targets to reduce greenhouse gas emissions by 55 percent by 2030, the so-called European program Fit for 55, the energy transition involves a wide range of sectors, including energy, transport, industry and buildings, and requires the involvement and coordination of governments, businesses, academic institutions and civil society.
In this content we will delve into what the energy transition is all about and what concrete benefits it can bring in building a sustainable business future.
The benefits of the energy transition
The energy transition offers a number of both environmental and socioeconomic benefits.
Some of the main ones are listed below:
- Reducing greenhouse gas emissions: transitioning to low-carbon energy sources, such as renewable energy, helps reduce greenhouse gas emissions responsible for climate change;
- Improved air quality: adoption of clean energy reduces air pollution associated with fossil fuel consumption, improving air quality and reducing human health risks;
- Diversification and energy security: diversification of energy sources reduces dependence on imported fossil fuels, improving energy security and reducing vulnerability to price and supply shocks;
- Job creation and economic growth: the energy transition promotes the creation of new sectors and industries, such as solar, wind and clean technology energy, generating job opportunities and stimulating economic growth;
- Energy conservation and efficiency: efforts to improve energy efficiency in buildings, transportation and industry not only reduce energy costs, but also help reduce overall energy demand;
- Technological innovation: the energy transition stimulates technological innovation, leading to faster and lower cost developments for renewable technologies, energy storage and other advanced energy solutions;
- Improved resilience: adoption of decentralized and distributed energy sources, such as solar and wind power, can improve energy system resilience, reducing the risk of service disruptions caused by extreme events or natural disasters;
- Promoting social justice: an equitable and inclusive energy transition takes into account the needs of the most vulnerable communities, ensuring that they have access to clean energy, affordable rates and related economic opportunities.
That of energy transition is an ambitious goal, but one that produces its effects on multiple areas, from the more strictly economic to the social, improving the efficiency and environmental impact of business activities.
The energy transition market
The energy transition market is a segment that is attracting more and more investors, as well as, given the public utility function performed by the use of renewable energy, the interest of national and international institutions.
Investments in energy transition projects are growing in number: last year alone the market came to be worth $1.770 billion, a 17 percent increase over the previous year.
Highlighting this data is the 2024 Energy Transition Investment Trends report, published by the BloombergNEF platform.
Overall, areas such as renewable energy, electric mobility, hydrogen use and carbon capture technologies continue to be the main drivers of investment growth in the energy transition.
By 2023, investment in passenger and commercial vehicles and related infrastructure totaled $634 billion, registering a 36 percent increase over 2022.
Renewable energy investments increased by 8 percent annually, reaching a total of $623 billion. Growth has been driven mainly by the United States and Europe.
The report also showed strong growth in energy sources and sectors such as hydrogen (with investment tripled from the previous year), carbon capture and storage (nearly doubled) and energy storage (up 76 percent).
Energy transition consulting: we welcome a sustainable future together
Energy transition and energy efficiency represent two areas in which a range of strategies can be undertaken to save current resources, invest in technology projects that take advantage of the existence of new energy sources, and achieve institutionally mandated carbon neutrality goals.
Energy transition and energy efficiency are both key to creating a more sustainable and resilient energy system.
In Tecno we support, using state-of-the-art solutions, companies and entrepreneurs in developing energy management strategies aimed at avoiding waste and reducing the environmental impact of activities.
Let’s build a path to energy efficiency together.
Work out your energy management strategy with us.
