Framework for Understanding Global Energy Transition Focus Areas: Overview of G20 (2023)

11 min readDec 30, 2023

Overview of the article series

Understanding the pressing need for climate mitigation and the pivotal role of youth in shaping a sustainable future doesn’t require reiteration. As young individuals hold a significant stake in crafting a greener world, engaging them in the clean energy transition becomes paramount. However, navigating the complex landscape of energy transition can be daunting. This series bridges the gap between intricate policy drafts and the time constraints of our dynamic lives, offering a comprehensive yet digestible exploration of energy transition challenges and solutions, particularly within India’s context.

Using the G20 framework, this series simplifies the understanding of global efforts and priorities regarding clean energy transition. The inaugural article sheds light on six crucial focus areas adopted by the Green Energy Transition Working Group at G20 2023. By setting the stage for India’s objectives in this global arena, it acts as a gateway to subsequent articles diving deep into each focus area. These upcoming pieces dissect challenges, India’s progress, and global and domestic hurdles, and illuminate international and national best practices within each realm. Hopefully, this enables you in the first step toward greater energy literacy and provides the foundation to contribute to a sustainable future

Introduction

The Paris Agreement changed the face of climate action.

The globally binding treaty, unanimously adopted in 2015 by all 196 Parties to the UN Climate Convention in Paris, established overarching objectives acknowledged by all nations. Primarily, these aims involve limiting the global average temperature rise to well below 2°C from pre-industrial levels, with efforts to cap it at 1.5°C. Additionally, it aims to bolster the capacity to handle climate impacts and align financial flows with countries’ needs to achieve these objectives. The Paris Agreement marked a significant shift in international climate discussions by introducing a universal, nation-driven approach toward meeting collective climate targets. It also laid the groundwork for transparently monitoring and reporting global progress.

At the heart of achieving the Paris Agreement objectives lie Nationally Determined Contributions (NDCs), individual climate commitments each Party must craft. These lay out their plans for reducing greenhouse gas (GHG) emissions and adapting to impacts. NDCs set short- to medium-term goals, encompassing both adaptation and mitigation measures, and necessitate updates every five years. Each update should aspire to be more ambitious, setting stricter targets to bring the world closer to the 1.5°C goal.

India’s Nationally Determined Contribution

The two targets submitted by India as part of the August 2022 NDC update are :

Reduction in (overall and not sector-specific) Emissions Intensity: Aim to reduce the emissions intensity of GDP by 45% by 2030 compared to the 2005 level.
Increase in Renewable Energy Capacity: Target to achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
Lifestyle for Environment as a key to combating climate change (LiFE): Put forward and further propagate a healthy and sustainable way of living based on the traditions and values of conservation and moderation, including through a mass movement for LiFE.
Carbon capture and utilization: Create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.

In line with previous commitments, the emissions intensity of India’s GDP had already reduced by 24 percent from 2005 levels until 2016. The Center for Electricity Authority (CEA) publishes the installed capacity of all energy sources on its website which can be accessed here.

As India has already achieved approximately 40% cumulative power capacity from non-fossil fuel sources, its NDCs are expected to be more ambitious than the revised targets. The climate action tracker classifies the conditional and unconditional targets of NDCs of various countries into — critically insufficient, highly insufficient, insufficient, almost sufficient, 1.5C Paris Agreement compatible. It placed India’s overall rating as highly insufficient. An important point of context here is also India’s increasing reliance on fossil fuels, despite substantial progress in installing renewable energy capacity and securing the fourth position globally in 2022. Figure 1 captures the snapshot of the latest assessment for India’s NDC on the website:

**Figure 1: Overall Rating for India’s NDC Targets (August 2022), Source:** https://climateactiontracker.org/countries/india/

Recap: G20 2023

Energy has been a focal point in G20 discussions concerning a sustainable global economy since 2009. In 2013, a specialized Energy Sustainability Working Group was formed to address various energy-related matters. In 2017, energy became a topic within the Climate Sustainability Working Group. Throughout the Argentine Presidency in 2018, energy issues were separated from climate concerns and directed toward conversations on the transition in energy under the Energy Transition Working Group (ETWG). This particular group engages in discussions encompassing energy security, accessibility, affordability, efficiency, renewable energy, innovation, technology, and financing. Table 1 in the Appendix tabulates all major events during the four ETWG meetings hosted by India.

During the G20 India Presidency, the ETWG was tasked with forging agreements among G20 members regarding pivotal aspects tied to the global energy shift. Through multiple group discussions, six key priority areas were chosen, discussed below. These can be found on the official website of the Ministry of Power, India here.

A. Energy Security and diversified supply chains

Transnational Grid Interconnections and Cross-border Power System Integration: Under the 2023 G20 presidency theme of “One Earth, One Family, and One Future,” transnational grid connections hold significant importance for enhancing energy access and sustainability. They promote regional cooperation, contributing to heightened energy security and overall economic development. These connections allow the integration of multiple power systems, enhancing grid stability and facilitating the optimal utilization of diverse energy sources that might not be uniformly available. They also assist in balancing peak demand and managing surplus supply, thereby enhancing the financial feasibility of large-scale Renewable Energy (RE) projects.

Resilient Renewable Energy supply chains: As the proportion of variable renewable energy (RE) within electricity systems continues to increase, there’s a pressing need for significant expansion in storage solutions. To address the challenging sectors that are difficult to decarbonize, there’s an urgency to rapidly scale up the green hydrogen ecosystem. The battery systems and electrolyzers at the heart of the technologies supporting these objectives have a much greater reliance on different critical minerals compared to the equipment needed in fossil fuel supply chains. The current energy security paradigm largely focuses on fossil fuel supply disruptions and price spikes. To accelerate the deployment of clean energy technologies, the risks associated with an increased dependence on mining critical minerals need to be assessed to make global supply chains reliable, affordable, and sustainable.

B. Universal Energy Access and Just, Affordable, and Inclusive Energy Transition Pathways

Universal Energy Access: The UN Sustainable Development Goal 7 also aims to ensure universal access to affordable, dependable, sustainable, and clean energy by 2030. Two indicators reflect progress made in this regard.

The first indicator is the proportion of the population with access to electricity. Electricity is a key aspect of modern energy supply and can serve as a proxy for the level of development and wealth in a country. On a positive note, the global share of the population with access to electricity has grown from 78% in 2000 to 91% in 2021. However, the regional and socio-economic disparities in access to electricity remain a challenge. While rural electricity access has risen from 73% (2010) to 85% (2021), it lags significantly behind urban access, which ranges from 96% (2010) to 98% (2021), affecting rural communities’ access to livelihood-improving equipment. Decentralized renewable energy solutions such as rooftop solar hold immense potential in providing energy access because of their portability, ease of deployment, and low operating costs. A compendium of best global practices for deploying DRE models is documented in this report by the Center for Energy, Environment, and Water.

Another indicator is the proportion of the population with primary reliance on clean fuels and technology for cooking, lighting, space heating, and other uses. Access to energy and clean cooking holds significant gender-specific benefits. It alleviates the need for women to spend time gathering cooking fuel and reduces their exposure to harmful smoke from traditional cookstoves. This empowerment allows them to redirect their time and focus towards other productive endeavors. The global population’s access to clean cooking has increased steadily, averaging a 1% annual growth from 49% in 2000 to 71% in 2021. This is insufficient to meet the targets of universal access by 2030. Keeping 2021 as the base year, with the current rate of progress we will have 1.9 billion people will be left without access to clean cooking fuels.

Just Transition in the fossil fuel-based industries: The expansion of renewable energy sources and its impact on reducing dependence on the coal sector, including mine closures, could significantly affect the livelihoods of communities reliant on coal. This aspect needs careful consideration, particularly as coal-dependent nations shift toward a low-carbon economy. In India, for instance, coal mining is a vital source of employment, especially in central and eastern coal-producing districts. Direct formal employment in coal mines is estimated at 0.5 million individuals, and there can be at least three times more people indirectly employed in coal-related livelihoods. Individuals within the informal coal economy continue to face significant vulnerability due to their low incomes, limited skills and education, and absence of a social safety net. Thus, transitioning away from coal must involve strategies that address economic diversification, build community capabilities, provide new avenues for livelihood generation, restore affected ecological areas, and strengthen social and physical infrastructure.

C. Energy Efficiency and Responsible Consumption

Three pillars of focus for decarbonization efforts:

Consuming energy efficiently and decreasing emissions intensity stand as the foundation for fair and inclusive sustainable energy transitions and play a pivotal role in decarbonizing the global economy.

The first pivotal aspect of decarbonization involves enhancing energy efficiency within the industrial sector. This becomes especially challenging in hard-to-abate industries due to their high process-temperature requirements, limited decarbonization options, and significant capital investments. Sectors such as iron, steel, ammonia, cement, and related industries heavily rely on these processes as essential raw materials.

The second pillar focuses on the buildings sector, encompassing residential energy consumption. Promoting low-carbon sustainable cooling technologies emerges as a key lever here. Cooling, a rapidly growing electricity end-use, constitutes about 15% of building electricity consumption, contributing to around 30% of global final energy usage. Encouraging user behavior shifts like off-peak consumption, proper appliance maintenance, and mindful usage of HVAC systems significantly contribute to energy efficiency.

The third vital aspect pertains to the transport sector. Despite strides in electrification, this sector remains highly reliant on fossil fuels, with approximately 91% of its final energy sourced from oil products. Road transport alone accounts for nearly 75% of energy demand and associated emissions. Strategies for enhancing energy efficiency here include advancing engine technologies, diversifying fuels (biofuel, hydrogen, natural gas), integrating IoT in transportation, utilizing lightweight materials, and promoting electric vehicle adoption.

D. Addressing Technology Gaps for Energy Transitions

Strategies for technology adoption: The success of the energy transition relies on widespread, cost-effective access to mature green technologies within an optimal timeframe. Mature technologies like solar, wind, bioenergy, nuclear energy, hydropower, battery and pumped hydropower storage, heat pumps, and carbon capture, utilization, and storage (CCUS) need an accelerated pace and broader commercial deployment. Meanwhile, the strategy for emerging technologies — like electrolyzers, bioenergy with carbon capture and storage (BECCS), direct air capture (DAC), high-efficiency fuel cells, ACC battery storage, sustainable advanced biofuels, and small modular reactors (SMRs) — is centered on increased investment in research and development. Addressing the dominance of a few developed countries in owning the most green technologies, intellectual property rights, and manufacturing hubs will also pose a significant challenge.

E. Fuels for Future

Green Hydrogen: Low-carbon hydrogen, especially green hydrogen derived from renewable sources, offers a promising solution for achieving energy transition goals. Its potential spans across decarbonizing challenging sectors like heavy industry, buildings, and transportation while addressing intermittency in renewable energy generation. Four pivotal focus areas have been identified to realize a green hydrogen economy:

Establishing robust supply chains to expedite green hydrogen adoption.
Establishing a standardized framework for green hydrogen among nations, including certification protocols.
Promoting collaborative research and innovation through ongoing multilateral initiatives to accelerate the development of green hydrogen technologies.
For an in-depth exploration of the significance and production of green hydrogen, refer to this article.

Biofuels: Given their characteristic affordability and potential for enabling circularity in waste management, Biofuels are emerging as one of the most accessible routes to climate change mitigation. The complete implementation of the Biofuel Vision has the potential to reduce global CO2 emissions by 1,300–1,400 million tons. This reduction is equivalent to:

Approximately 15% of the total oil demand in transportation in 2020, which is around 450–500 million tons of oil equivalent (MTOE).
Providing enough energy for around 200 million trips along the equator using a light vehicle.
Meeting Africa’s total energy consumption in 2021.

F. Access to Low-Cost Financing for Energy Transitions

Mobilizing private sector investment in enabling energy transition: Significant strides in solar photovoltaic (PV) and onshore wind technologies have led to remarkable cost reductions over the last decade, dropping by 88% for utility-scale solar PV and 68% for onshore wind, as per IRENA’s 2021 Renewable Power Generation Costs report. However, the ambitious goal of the Paris Agreement necessitates approximately USD 125 trillion in investments by 2050, a sum beyond the reach of public sector finances alone.

Relying on limited public funds emphasizes the indispensable role of the private sector in financing this transition. Their involvement, particularly in offering low-cost capital for energy transition projects, becomes critical, especially during periods of tighter monetary policies. To mobilize substantial private investment, understanding the existing risks and barriers in renewable energy (RE) projects is crucial. Formulating policies aimed at mitigating these challenges could be a strategic approach.

References

These are the articles I referred to while understanding the problem and writing the article. It also includes some important government sources that help in understanding the energy policy landscape of India.