What is energy transition?
14 February 2023
The energy transition is the set of changes in energy production, distribution, and consumption patterns to avoid greenhouse gas emissions.
The main cause of climate change is the greenhouse effect. Certain gases present in the atmosphere retain part of the thermal radiation emitted by the earth’s surface, causing global warming.
Many of these greenhouse gases are naturally present; however, human activity has caused the concentration of some of them to increase in the atmosphere, especially carbon dioxide (CO₂). The aim of this change is to transform the energy system, boosting renewable energies, the circular economy, and other ways of reducing emissions. This organization includes raising awareness of energy efficiency and effectiveness, as well as developing energy management strategies through the electrification and digitalization of all economic sectors and processes.
To achieve this goal, the main tool is the energy transition, that is, changing from an energy system based on fossil fuels to one with low or zero carbon emissions, based on renewable sources. A major contribution to decarbonization comes from the electrification of consumption, replacing electricity produced from fossil fuels with electricity generated from renewable sources, which makes other sectors, such as transportation, cleaner, as well as from the digitalization of networks, which improves energy efficiency.
The energy transition process is nothing new in history. We have already witnessed other major historical changes in the past, such as from wood to coal in the 19th century and from coal to oil in the 20th century. What characterizes this transition from the previous one is the need to protect the planet from the worst threat we have faced to date, and that we need to do so as quickly as possible. This momentum has accelerated changes in the energy sector:
in a decade (2010-2019) the costs of renewable technologies have fallen respectively by 80% for solar PV and 60% for onshore wind.
However, the energy transition is not limited to the progressive closure of coal-fired power plants and the development of clean energy but is a paradigm shift of the entire system. A major contribution to decarbonization comes both from the electrification of consumption, which also makes other sectors, such as transport, cleaner, and from the digitalization of networks, which in turn improves energy efficiency.
This benefits not only the climate but also the economy and society. The digitization of grids enables smart grids and opens the way to new services for consumers. From an environmental perspective, renewable sources and power systems reduce pollution, and coal-fired power plants can be converted into a circular economy. Furthermore, in terms of social stability, new jobs will be able to take the work of people who previously worked in the thermal power industry. It is important that the power transition is inclusive and that no one is left behind.
The key to decarbonization
The change towards a more sustainable energy production model does not consist of abandoning fossil fuels, which are indispensable in areas as important as air transport or the shipbuilding industry. Thus, among the actions contemplated in the energy transition are the following:
- Reduction of emissions
- Reduction of GHG emissions
- Promote the use of new, more sustainable fuels such as synthetic fuels or biofuels.
- Renewable energy
- Use of renewable energies
- Promote low-carbon electricity generation and encourage electrification of the main sectors of the economy.
- Improving the energy efficiency
- of both companies and society and encouraging the reduction of their carbon footprint.
The magnitude of the proposal
With the auction of renewable energies to which the former Minister Cano alludes, held in early 2019, the Ministry of Mines and Energy assigned that generation quota to eight projects in which seven generating companies and 22 trading companies will participate.
These projects, of which five are wind energy and three solars, will require an investment of close to US$ 2.2 billion, according to the National Government, much of it from foreign investment since the winners of the auction include foreign companies.
The impact of the auction and that of 215 other projects being executed in different parts of the country will diversify the electricity matrix, help mitigate the effects of climate change, avoid vulnerabilities such as the El Niño Phenomenon and allow reaching the goal of 10% of renewable energy production.