Renewable Energy – An Investment in Human Welfare and Nature

Today, climate change is affecting every country on every continent. The impacts – from rising sea levels to longer periods of drought – are putting entire economies at risk, even if these costs are not yet fully visible. Moving to renewable energies is one of the most effective tools in the fight against climate change, as it offers an immediate means to significantly reduce global carbon dioxide emissions.

Carbon Emissions Account for Almost Two-Thirds of Global Warming

Most climate scientists agree that the main reason behind climate change, and global warming especially, is greenhouse gas emissions, such as carbon dioxide (CO₂), methane, and nitrous oxide. The current warming trend is particularly significant because most of it is likely to be the result of human activity. Humans are driving climate change to a large extent through CO₂ emissions, which account for almost two-thirds of man-made global warming.

Of these emissions, almost half results from electricity and heat production and agriculture and forestry. Without action, the world’s average surface temperature is projected to rise by between 2.4 and 6.4 degrees Celsius by the end of the 21st century¹. The main source of carbon emissions is the use of fossil fuels, e.g. coal, oil, and gas.

The First Step Against Climate Change: The Paris Agreement

A more decisive switch to "clean energy" would help slow down or even reverse the trend of global warming. Renewable energy means generating electricity (or heat) from sustainable sources like water, wind, solar, and geothermal power with little or no pollution or CO₂ emissions.

Affordable, scalable solutions are now becoming available that enable countries to leapfrog to cleaner, more resilient alternatives. The pace of change is accelerating as more households and firms are turning to renewable energies and a range of other measures to reduce CO₂ emissions.

In an effort to internationally address climate change, 195 countries adopted the Paris Agreement in December 2015. The agreement’s central aim is to keep the global temperature rise this century well below two degrees Celsius. To reach this ambitious goal, appropriate financial flows, a new technology framework, and an enhanced capacity building framework will be put in place.

_{¹ Source: "IPCC Special Report on Emission Scenarios (SRES)," 2007.
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Renewable Energy Is "The Biggest Economic Opportunity the World Has Ever Seen"

Besides the harm to human health from burning coal, the risk of rising sea levels, and disruptions to food and water supplies that could be mitigated through enforcement of clean energy initiatives, renewable energy is also the "biggest economic opportunity the world has ever seen" according to former US Secretary of State John Kerry at the "Bloomberg New Energy Finance" conference last year.

According to the "Global Trends in Renewable Energy Investment 2017" report from the Frankfurt School-UNEP Collaborating Center and Bloomberg New Energy Finance, investments in renewables totaled USD 241.6 billion (excluding large hydro) in 2016. These investments added nine percent to global power capacity.

Moreover, the proportion of electricity coming from renewable sources (excluding large hydro) rose, in turn preventing the emission of an estimated 1.7 gigatons of carbon dioxide. "The investor hunger for existing wind and solar farms is a strong signal for the world to move to renewables," commented Prof. Dr. Udo Steffens, President of the Frankfurt School of Finance & Management, in the report.

Climate Change Is a Major Concern for Millennials

Millennials worry about the future of the environment and feel responsible for it. Thus, it is no surprise that support for electric bill surcharges for developing renewable energy was highest among millennials, according to a study conducted by Deloitte in the USA. In addition, as they are used to benefiting from the "sharing economy," they also have the greatest interest in community solar power, for example.

Electricity Production from Renewable Energies Is Flourishing

According to the BP Energy Outlook 2017, renewables accounted for about 7% of global power generation in 2015 (excluding hydropower), but should increase to almost 20% by 2035, representing 40% of the growth in power generation.

The strong growth is mostly attributable to lower costs; while the pace of cost reduction slowed for solar, wind power costs are expected to fall materially, driven by the improving performance of wind turbines. However, wind energy is also controversial due to its impact on landscapes and bird wildlife.

Energy Storage Becoming More Important in the Fight Against Climate Change

Energy storage forms a key part of future energy systems with higher (and less predictable) renewable generation. There are different types of storage: solid-state batteries, flow batteries, flywheels, compressed air energy storage, thermal storage, and pumped hydropower. We see a lot of opportunity in solid-state batteries, particularly for lithium-ion.

Global energy storage capacity currently stands at about 3,000 MW and is expected to
grow to around 45,000 MW by 2024. Electric vehicles (EV) are another driver of battery demand. Based on the attractive outlook for batteries, plans are in place to build up to 12 new battery megafactories in order to triple current battery manufacturing capacity by 2020.