Powering the energy transition with smart electrification: IRENA’s toolbox for decarbonizing end-uses

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smart electrification

Utilizing renewable energy in industry, transport and buildings is a cost-effective way to decarbonise end-use sectors. This transition not only enhances supply security but also diminishes reliance on imported fossil fuels, while mitigating the risks associated with volatile fuel prices witnessed in recent times.

A newly released report by the International Renewable Energy Agency (IRENA) equips governments with a comprehensive collection of 100 pioneering solutions, enabling them to customize national strategies and curtail emissions in various sectors. By devising smart electrification strategies, countries can take tangible steps, minimize investments, and greatly expedite the transition leading up to the upcoming COP28 in Dubai later this year.

IRENA’s Director-General Francesco La Camera launched the Innovation Landscape for smart electrification in the presence of European Commissioner for Energy, Kadri Simson at an official launch event hosted by the European Commission in Brussels.

IRENA’s Director-General Francesco La Camera said: “Smart electrification gives governments a cost-effective way to accelerate economic growth, improve energy security and reduce the growing impacts of climate change. Today, many solutions are available and ready for commercialisation, with pioneering companies creating, trialing, and deploying transformative innovations. May our toolbox provide governments with concrete solutions they can pursue in support of national energy sector priorities and decarbonisation plans in the run up to COP28 and beyond.”

Kadri Simson, the European Commissioner for Energy added: “Last year’s energy crisis has shown how important it is to decrease our dependence on imported fossil fuels, and that is why we increased our renewables ambitions to 42.5% by 2030. To facilitate smart electrification, we put forward the Electricity Market Design that enables an even faster acceleration of renewables, support the innovative flexibility solutions, and provides consumers and industries with additional means to actively engage in the electricity market and directly gain access to renewable power. IRENA’s report confirms that our policy choices are both right and necessary.”

According to IRENA’s Outlook, electricity is poised to become the primary energy carrier in the future, encompassing over 50% of global energy consumption by 2050. This shift is attributed to the remarkable cost reductions in renewable electricity generation, which have propelled advancements in the power sector. As of 2022, renewable energy installations have reached a global milestone of 40%. In the European Union, renewable sources contribute to nearly 60% of power generation capacity. Notably, renewables accounted for approximately 40% of total electricity generation, with wind and solar power surpassing gas for the first time, generating close to 22% of the electricity. The next crucial step is to concentrate efforts on electrifying end-uses that continue to heavily rely on fossil fuels.

Numerous electric-powered technologies are presently accessible, encompassing electric vehicles (EVs) and heat pumps designed for buildings and industrial processes. Moreover, the utilization of green hydrogen, generated from renewable power sources, offers a potential solution for decarbonizing sectors that are challenging to transition.

However, achieving widespread electrification goes beyond simply implementing technological solutions and necessitates the active participation of all stakeholders involved in the energy value chain, spanning both the power sector and end users. The concept of Power-to-X becomes crucial in this context. The report emphasizes that decision-makers must adopt a systemic approach, combining advancements in technology and infrastructure with innovations in market design, regulations, system planning and operation, as well as business models.

Innovation plays a pivotal role in cost reduction, investment minimization, and the emergence of new business prospects. Major economies, such as the United States with the Inflation Reduction Act and the European Union with the Net Zero Industry Act, have implemented substantial stimulus packages. These initiatives, along with the investments accompanying them, are largely driven by technological innovation, as well as innovation in policies, market design, and financing instruments.

The report concludes that as there is no “one-size-fits-all” solution for smart electrification, optimal strategies and implementation of innovations will be different among countries and system-specific attributes. It offers guidance on effectively utilizing the innovation toolbox, considering each country’s unique context.

The toolbox is based upon a comprehensive assessment of numerous innovative solutions emerging globally. Input from a wide range of experts, including start-ups, large companies, regulators, and system operators, has been incorporated into its development.

Read Innovation Landscape for smart electrification. Decarbonising end-use sectors with renewable power

IRENA’s Innovation Week 2023 in September will also emphasize on renewable solutions in end-use sectors. Together with this report, it offers input to drive the global climate agenda at COP28.

Read next: Australians, Americans, and Canadians split on the significance of green energy, survey finds

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