The Energy Transition Has Challenges Ahead
by Bob Shively, Enerdynamics President and Lead Instructor
We seem to feel the impacts of climate change more and more each year. Wildfires, unprecedented heat, and severe storms are becoming commonplace around the globe. The transition to a zero-carbon energy system, while not something humanity can achieve overnight, is key to reducing even more extreme effects in future years.
While we’ve progressed in developing technologies to address carbon emissions in power generation and transportation, much work remains to transform our energy systems. The McKinsey Global Institute recently outlined what remains to be done in its report Hard Stuff: Navigating the Physical Realities of the Energy Transition.
The global energy transition is in its early stages, with only about 10% of required low-emissions technology deployment achieved in most areas. While progress has been made, particularly in easier-use cases, the road ahead involves tackling 25 interlinked physical challenges across seven domains: power, mobility, industry, buildings, raw materials, hydrogen and energy carriers, and carbon and energy reduction.
The report categorized the challenges into three levels of difficulty:
- Level 1 challenges involve deploying established technologies with minimal hurdles.
- Level 2 challenges require accelerating known technologies and scaling associated infrastructure which involves significant challenges.
- Level 3 challenges, the most demanding, face technological performance gaps and complex interdependencies and will require significant advances to overcome.
The table below shows challenges by each sector with levels assigned by the McKinsey study:
Notably, addressing Level 3 challenges is crucial, as they account for 40-60% of energy-related CO2 emissions reduction. Examples of these include managing power systems with a large share of variable renewables, addressing range and payload challenges in electric trucks, finding alternative heat sources and feedstocks for producing industrial materials, and deploying clean hydrogen production and delivery.
To progress, the energy sector must confront performance gaps, drive innovation, and implement system-level changes. This may involve adapting consumption patterns and considering hybrid technologies as transitional solutions. For energy professionals, understanding these physical realities is key to navigating the transition successfully. It enables identifying near-term opportunities, addressing potential bottlenecks, and developing strategies to tackle the most demanding challenges through innovation and system reconfiguration.
This is a huge challenge. But we’ve seen the energy industry pull off amazing feats in the past. What is certain for those of us in the energy industry are the ongoing opportunities that will prove rewarding not just for us individuals, but for all of society.
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