The energy industry should brace itself for a ‘bumpy road’ on the journey to decarbonisation, Davos 2023 delegates heard today.
In a session on ‘The Different Roads to Energy Transition’, Sumant Sunha, Chairman and CEO, ReNew Power, said, “There’s not going to be a case where one (oil and gas) dials down and one (renewables) dials up, there’s going to be lots of volatility in that whole process. There’s not going to be one single entity managing the transition.
“There is no question we are going to need oil and gas but the question is how quickly are we going to dial that down. Can companies be more ambitious with their targets and channel more capital?”
He anticipates demand for green hydrogen, as that allows us to address the hard-to-abate sectors. “There will be a lot of momentum picking up in the next five-to-10 years,” he said.
Josu Jon Imaz, CEO, Repsol, said, “Even in 2050, we’re going to need oil and more gas. We have a responsibility to produce the products society needs. In Europe we forgot we had to produce natural gas, and built dependency on Russia. We are trying to maintain current production and investing in less-carbonised technologies.”
He said the Inflation Reduction Act is the model of the ‘carrot’, incentivising companies to embrace renewable energies.
“We need to have a more intelligent energy transition framework in Europe,” he said.
Irene Velez Torres, Minister of Mines and Energy, Ministry of Mines and Energy of Colombia, said, “For us the energy transition doesn’t only involve the reduction of carbon dioxide, but how we leave behind hydrocarbon sectors and survive as a country – that’s our main dilemma.”
Darius Adamczyk, Chairman and CEO, Honeywell International, said, “Economics matter. If we could wave the magic wand, we’d all want renewable energy at an economic value tomorrow, but it’s not realistic.
He said the world is trying to adjust to wildly fluctuating supply chain pressures, from little demand in the pandemic to extreme demand today.
“Let’s be honest, supply chains are not built for that. We have changed our strategy, making sure our supply chains are much more resilient and operate with optionality.”