Middle East and Africa Energy Transition Readiness Index

Green hydrogen
for the world
The Middle East and Africa are likely to
become an epicenter of sustainable
energy – but increased regulation and
­targeted investment are crucial

Energy Week
Knowledge
Partner
Middle East and Africa Energy Transition Readiness Index

Energy transition:
It’s time for immediate action
“ We need to act,
and we need
to act quickly.
H. E. Suhail Al Mazrouei,
Minister of Energy & Infrastructure
The Middle East and Africa Energy Week highlighted that the region is United Arab Emirates
well positioned to become a major supplier of sustainable energy to glob-
al markets. However, the area requires ­stabilizing regulations, significant
investments and a substantial increase in collaboration to realize this po-
tential.

A seismic shift is transforming traditional ener- They were also asked what progress they be-
“ Everyone gets it
and has the same
ambition, but we have
gy structures across the globe, redefining what lieve had been achieved so far on each of the
it means to create a sustainable world. The
Energy Week conferences, a series of events
priorities.
an implementation
each focusing on a different geographical re- Our investigation found that the Middle East problem, not an
gion, hosted by Siemens Energy and partners, and Africa have the necessary broad access
bring together industry, political and society to low-cost renewable energy in order to be-
identification problem.
leaders from around the world to tackle the come producers of sustainable green energy.
Christian Bruch,
increasingly serious challenges that face not However, the region requires major capital in- President and CEO,
only the energy industry but society at large. vestments, which in turn rely on clear policy Siemens Energy
frameworks being in place. Equally critical is
Participants in the conference were asked increased collaboration along the entire value
about the importance of a range of key en- chain – from green hydrogen developers and
ergy priorities that together form a complete financial institutions to suppliers – and be-
­
framework for a successful energy transition. tween governments.

2
Middle East and Africa Energy Transition Readiness Index

Key insights “ The Middle East

can play a key role
in addressing the
new priorities of
The Middle East and Africa Energy Week cast an important light on the region’s pros- Debate at the Energy Week focused in particular on the first three of these insights.
pects with regard to the energy transition. The discussions drew attention to five key Conference participants believed that green hydrogen and its derivatives are where ­Europe’s energy
insights, factors that are critical for the future growth of the region: the future likely lies for the region’s energy exports. Demand for hydrogen in Europe
is forecast to grow from its current level of 10 million tons a year to 20 million tons by transition
. Green hydrogen is key: Countries throughout the region are at different stages of 2030, and 95 million tons by 2050. Around half of this demand will be met by imports.
the energy transition. However, one thing is already clear: Exporting green hydro- Pierre Samaties,
gen to the European demand center presents a major economic prospect and the The consensus at the conference was that a large portion of these imports will origi- Partner – Roland Berger
opportunity to gain geo-political significance in the global decarbonization effort. nate in the Middle East and Africa. The region is busy expanding its production c­ apacity
Speed is key to establish and reinforce long-term supply chains. Hence, speeding up accordingly, with lighthouse projects for example in Saudi Arabia and Namibia. Giga-
the development of renewable energy will be a priority for all countries wishing to watt-scale projects are anticipated to come online as soon as 2025.

“
enter the green hydrogen game

. The energy transition can solve the energy trilemma in Africa: The African
Discussions about energy in Africa have often focused in recent decades on the
“­energy trilemma” – the need to find the right balance between affordability, reliability
We must
continent enjoys a significant economic opportunity in the shape of sustainable, and sustainability. Of these three factors, access to energy remains perhaps the most remember
­decentralized energy applications, bespoke financing options and intercontinental critical one for Africa. The disparity between different countries in Africa means that
collaboration tailor-made solutions are called for, from bespoke financing options and decentralized that every
energy applications to intercontinental collaboration on transmission grids.
. The current challenging energy situation in Europe can be a catalyst for the ton of CO2
r­ egion: Just a few months ago, green hydrogen was not considered economically
viable. Now things have changed, as gas supplies for E
­ urope become increasingly
The energy transition represents a significant economic opportunity for the African
continent. However, the benefits must be distributed throughout society. Educating
we emit into
scarce and upskilling of the population can form a basis for this, enabling broad participation
in the economic opportunity. The energy transition is a unique opportunity to drive
atmosphere
. Greater funding support is needed throughout the region: Access to financing is broad socio-economic development. A just transition sees associated cost shared in will need to
a prerequisite for decarbonization efforts. Financial instruments need to be tailored a manner that places no additional burden on economic development. This econom-
to the specific nature of countries in the Middle East and Africa ic development needs to translate into employment and development opportunities be removed
throughout the entire population. Specific needs of each country must be considered
. Regulatory frameworks must be enhanced: A stable regulatory environment is in order to fully tap the societal potential and ensure no one is left behind. Dietmar Siersdorfer,
vital for en­abling more funding and long-term investment Managing Director Middle East,
Siemens Energy

3
Middle East and Africa Energy Transition Readiness Index

The European energy crisis has strong implications for the Middle East and 100
System
maturity
Africa. In particular, the war in Ukraine has resulted in a severe shortage of gas [%]
The Energy Transition in mainland Europe. The European Union and national governments are cur-
rently pursuing a dual strategy aimed at mitigating the situation: On the one
Readiness Index hand, they are attempting to speed up the energy transition, for example with
the concrete actions laid out in the REPowerEU program; on the other, they are

26%
During the conference, participants (experts and deci- urgently pursuing alternative sources of gas imports. In both areas, the Middle
sion-makers from the entire energy sector in the Middle East and Africa can be key partners as energy suppliers, as demonstrated by
East and Africa) completed a survey related to each ses- the visit of the German Economic Affairs Minister to various countries in the
sion’s focus. Up to 400 session participants completed the Middle East, soon after the conflict began, to discuss gas supplies and the
survey. The Energy Transition Readiness Index is calculat- export of green molecules. 50
ed based on these survey results. Participants were asked
to give their expert opinion on the progress of each of the The upcoming 2022 United Nations Climate Change Conference, or COP27,
11 energy priorities (see page 8). The Index aggregates will take place in Africa, in Egypt. This gave particular relevance to discussions
their answers by combining progress on each priority at the Energy Week about whether the global warming target of 1.5°C could
(“readiness“) with an assessment its importance (“system be met – as we discuss in a special chapter dedicated to the COP27 below.
maturity“, as measured by the average importance of all Overall, the region scored 26% in the Energy Transition Readiness Index, which
priorities, with a higher average pointing to a more sys- describes a region’s perceived readiness with regard to the energy transition
temic approach to the energy transition). The Index de- toward net zero (see the box).
scribes the perceived readiness, on a scale of 0 to 100%, Readiness [%]
0
of the energy transition toward net zero in the Middle East While it is clear that the Middle East and Africa will not be able to cut their
and Africa. hydrocarbon dependency immediately, a heightened sense of urgency exists 0 25 50 75 100
about speeding up the use of gas as a cleaner transition fuel and focusing
on how to use greenhouse gas-emitting energy sources in the most efficient
manner possible. It is vital that stable regulatory frameworks are established
so that the region can realize its full potential as a global energy exporter,
serving demand across the world.

“600 million people lack access to energy

in Africa. With the continent’s population
doubling by 2050, energy is key to unlock-
ing the future for the people.”
Nadja Haakansson, Managing Director Africa – Siemens Energy

4
Middle East and Africa Energy Transition Readiness Index

Green hydrogen in the Middle East

and Africa
Hydrogen is an energy vector with huge potential for of ammonia to avoid reconversion – here, technology is Number of green hydrogen
the region. The United Arab Emirates wants to have still under development. In the longer term, it can serve projects in Middle East and Africa
25% of the global market share, and Saudi Arabia has as an energy carrier, decarbonizing hard-to-abate sec-
announced plans to become the No. 1 hydrogen supplier tors such as heavy-duty transportation and industries United Arab Emirates
globally. Green hydrogen is considered a “good fit“ with that use large amounts of thermal energy. 9
Egypt
the region’s capabilities, especially the countries’ broad 7
potential in the area of renewables, their existing export The development of green hydrogen is currently driven
infrastructure and their financing resources. Hydrogen chiefly by hydrogen developers such as NEOM, ACWA
also has the potential to decarbonize the region’s econ- Power, Masdar and OQ. These players are supported
omies, which are currently strongly based on fossil fuels by the public sector, which is responsible for enabling

46
and have limited potential for electrification. Further- factors such as hydrogen valleys, access to technology,
more, it can diversify the heavy reliance on income from clear regulation and the availability of human capital. South Africa
fossil fuels seen in countries such as Saudi Arabia, the 5
United Arab Emirates and Oman. Key recent investments include the EXPO 2020 electro-
lyzer developed by DEWA and Siemens Energy, a small Oman ­projects
Key success factors for developing green hydrogen in- (1.25 MW) pilot. More than 40 investments of over USD 11
clude the creation of hydrogen valleys (points of produc- 20 billion have also been announced in the region for
tion linked to various points of consumption by means of the period to 2030. Current lighthouse projects include Morocco
shared, scaled-up infrastructure), the existence of clear ­NEOM's Helios project (2 GW of electrolyzer capacity, 4
regulations, access to key technologies such as electro- 4 GW of renewables and an investment of around USD
lyzers, and the development of human capital. 8 billion) and the joint 4 GW green hydrogen project in
Iraq
Egypt carried out by Masdar and Hassan Allam Utilities. Lebanon 3
Mauritania
Hydrogen can make a significant contribution to decar- The Green Energy Oman consortium is currently devel- 1 2
bonization. In the short term, it can be used in the form oping a 25 GW low carbon fuel project in Oman.
Namibia Algeria
1 1
Saudi Arabia Iran
1 1

Source: Roland Berger, June 2022

5
Middle East and Africa Energy Transition Readiness Index

“This year, many reports were issued. The most­­important

CO₂ reduction:
of them is the IPCC report. All of them stressed that we
are not on track to keep climate change below 2 ­degrees
Despite the region’s prominent position,
CO₂ reduction is by no means guaranteed
or even keep the 1.5°C target within reach. More work
needs to be done.”
H.E. Mohamed Nasr, Ambassador, Director of the Environment and Sustainable
­Development department at the Ministry of Foreign Affairs of the Arab Republic of
Egypt, Lead Negotiator for COP27

The Middle East and Africa make a relatively small contribution 0.94 million tons of CO₂ per capita in Africa and 8 million tons per
to global emissions: 7% of global CO₂ emissions stem from the capita in the Middle East. This compares to 2.3 million tons per
Middle East and just 3% from Africa. However, the region suffers capita in South and Central America, 4.1 million in Asia Pacific, 5.6
disproportionately from the consequences of climate change, as million in Europe and 11.2 million in North America.
CO₂ emissions
[mt] witnessed by the recent unprecedented heatwaves and increas-
Actual development
 ingly frequent severe weather events.
4000 since 2005
+50%*
3500 The Energy Week identified a significant gap between perceptions Ambitious targets for 2030
and reality when it comes to what has been achieved so far in
3000
cutting emissions. This same mismatch between perceptions and The gap between perceptions and reality filters through to par-
2500 reality was also found in other regions. However, the Middle East ticipants’ expectations for the coming years, too. The survey of
Ambition
 and Africa stand out from other regions in terms of their promi- conference participants found that they were expecting emissions
2000
for 2030 nent geographical position, infrastructure potential, willingness to to fall to just 39% of their 2005 level by 2030. This is an extremely
-39%
1500 -23% change and the availability of investment capital. optimistic view given the little amount of progress achieved so far.
Perceived development Emissions need to fall in the region across the board – not just in
1000
since 2005 Conference participants on average estimated that the region’s the energy sector but in areas such as construction, industry and
500 emissions fell by 23% between 2005 and today, with only around transportation. Conference participants agreed with academics
one-third correctly stating that emissions have not fallen at all. In that the 1.5°C target for maximum global warming is not achiev­
0
fact, emissions grew by around 50% between 2005 and 2021. In able if we continue along the current path: Decarbonization ef-
2005 2010 2015 2020 2025 2030
the Middle East, this increase was driven by heavy reliance on oil forts must be stepped up in order for the goal of carbon neutrality
and gas and high standards of living. In Africa, the drivers include by 2050 to be realistic. In particular, the conference highlighted
population growth, underdeveloped infrastructure and limited op- major opportunities in the large-scale export of green hydrogen as
tions for financing sustainable solutions. In 2021, emissions were a potential way forward.

What is the level of CO₂ reduction in your country today

and what will it be in 2030 compared to 2005?

* Source: BP Statistical Review of World Energy July 2021

6
Middle East and Africa Energy Transition Readiness Index

Ranking the
In the period to 2030, how strongly
will each of the 11 energy priorities
impact your achievement of climate
targets? (Low impact = 1; medium
energy priorities
impact = 2; high impact = 3)

Sector
Re-invent Implement Decarbonize coupling to Drive carbon Design Drive exit
Accelerate Digitize the Just energy Power-to-X
energy business energy storage industry decarbonize capture and emission strategies
renewables energy grid transition solutions
models solutions (Scope 1, 2, 3) end-user storage markets for coal
sectors

High Medium Low

Identifying energy priorities Overall, conference participants – despite the diversity of their backgrounds and the portance of implementing energy storage solutions, interconnecting transmission grids
evident differences between countries – considered all 11 priorities relatively important across national borders and devising a market design that incentivizes demand-side re-
Global strategy consultancy and for achieving the energy transition goals. The factor with the greatest potential impact, sponse – all factors that are key for enabling the flexibility of the energy system.
­Energy Week partner Roland ­Berger they believe, is speeding up the expansion of renewable energy. This is an area where
identifies, in close collaboration with technology is already mature and implementation therefore relatively straightforward. Surprisingly, given the region’s dependence on oil and gas, conference participants con-
Siemens Energy, 11 priorities for In the Middle East, key economies have set ambitious targets for clean, renewable ca- sider carbon capture, storage and use (CCUS) projects to be only a medium priority.
­tackling the energy transition. pacity. For example, Saudi Arabia is looking to scale up the share of gas and renewable Major players in the hydrocarbon industry have set ambitious targets for reducing emis-
Successfully addressing these priori- energy in its energy mix to 50% respectively by 2030 and aiming for installed capacity sions, while expanding their production capacity, by further deploying CCUS technology.
ties on a global level will result in sig- of 59 GW by the same year. Similarly, the United Arab Emirates has set ambitious targets For example, ADNOC plans to reduce its greenhouse gas emissions by 25% and expand
nificant decarbonization and is likely for 2050: to improve energy efficiency by 40%, reduce emissions from the power sector its CCUS capacity to 5 million tons per year by 2030 – a fivefold increase compared to the
to lead to net zero emissions. by 70% and increase the share of renewables in the energy mix to 44%. current level. Similarly, Saudi Aramco has pledged to achieve a net zero target by 2050
for Scope 1 and 2 emissions, the first player in the region to do so. It is anticipated that
The global push for decarbonization represents a threat to those economies in the ­Middle CCUS technology will be commercially available by 2024  / 2025.
East and Africa that depend heavily on oil and gas exports. Unsurprisingly, therefore, par-
ticipants consider reinventing the energy business a key priority. They also stress the im-

7
Middle East and Africa Energy Transition Readiness Index

Current “We need to accelerate the growth of energy in Africa,

progress
Participants in the Energy Week report that progress on the energy priorities
overall is fairly advanced. However, dedicated efforts are needed to achieve the ­accelerate energy storage and innovation and build a
2030 climate targets. The most progress has been made on accelerating renew- ­regulatory framework where everyone is in sync.”
ables and achieving a fair energy transition. Participants also perceive the decar-
Khaled Sharbatly, Chief Executive Officer, Desert Technologies
bonization of industry to be advancing well. In the Middle East, exit strategies
for coal generation are not applicable as very little coal is used; indeed, recently,
the Dubai coal Hassyan project was converted into a gas-fired power plant. In
Africa, by contrast, coal forms part of the energy mix and is an important pillar “There is an asymmetrical distribution of wealth and
of the mining industry. Any phase-out must consider both of these aspects. ­capital between the coun­tries in the north, which need
a lot of these molecules to decarbonize their in­dustries,
Progress on power-to-x solutions has been slow so far, evidently due to the nov- and the countries more often in the south, which have
elty of the technology. Focusing on this area and the export of low-cost green
a lot of the re­newable energy resources.”
hydrogen from the region is essential for the global decarbonization effort. Car-
bon capture and storage solutions will also be immensely helpful for the decar- James Mnyupe, Presidential Economic Advisor – Government of the Republic of Namibia
bonization of the hydrocarbon industry. In the Middle East, in particular, making
headway with this priority could have a major impact on the energy transition.

Implementation
phase Very strong

Pilot phase Rather strong

Planning phase Rather not strong

Not started Not strong

Not applicable

Accelerate Re-invent Implement Digitize the Decarbonize Sector coupling Drive carbon Design Drive exit Power-to-X Just energy
renewables energy energy storage energy grid industry to decarbonize capture and emission strategies solutions transition
business solutions (Scope 1, 2, 3) end-user storage markets for coal
models sectors

What progress have you achieved How strong is societal support

on each of the energy priorities? for faster implementation?

8
Middle East and Africa Energy Transition Readiness Index

What needs “Transitioning to hydrogen

to be done?
According to the conference participants, three key areas where action is
needed are: policy, funding and technological innovation. The success of the requires huge investment
energy transition hinges on the existence of a clear, stable policy framework. to develop technology,
Business and financial institutions need this solid basis on which to make build projects and estab-
their long-term and often irreversible investment decisions. Building the re-
lish marketplaces that
quired infrastructure for decarbonizing society also requires funding that is
collectively contribute to
front-loaded at the development stage of projects. In the current low-interest
environment, funding is readily available in the Middle East, especially for re-
a cleaner energy future.
newable energy projects. This coordinated effort by
all stakeholders must be
Technological hurdles exist for emerging technologies such as carbon capture supported by policymakers
and storage and long-term energy storage. At the moment, technology is not to achieve success.”
commercially available on the scale required to facilitate the energy transition.
Know-how is also critical for emerging technologies such as long-term energy Nabil Nuaim, Chief Digital Officer
Saudi Aramco
storage, power-to-X and sector coupling. In addition, participants report that
knowledge is lacking in the area of reinventing energy business models.

Funding Very fair

Know-how Rather fair

Technology Rather unfair

Policy Not fair

Supply chain

Accelerate Re-invent Implement Digitize the Decarbonize Sector coupling Drive carbon Design Drive exit Power-to-X Just energy
renewables energy energy storage energy grid industry to decarbonize capture and emission strategies solutions transition
business solutions (Scope 1, 2, 3) end-user storage markets for coal
models sectors
What is most needed for How fair is the energy transition
the future development in terms of jobs, access and
of each energy priority? affordability?

9
Middle East and Africa Energy Transition Readiness Index

Policy support Investment in renewables

The successful decarbonization of the Middle East and Worldwide installed capacity in renewable energy would need to quadruple
Africa will require a strong policy-led approach. This
­ in order to limit global warming to 1.5°C. For the Middle East and Africa, this Very strong
should tackle two priority areas: current high energy sub- means that installed capacity would have to grow to 1 TW by 2030 – a thir-
Rather strong
sidies for utilities, and overconsumption of carbon-based teen-fold increase from current levels – and 3.5 TW by 2050. Such growth rep-
fuels by end customers. However, policymakers also resents an enormous challenge compared to other regions (see figure below). Rather not strong
need to provide clarity on their regulation, e. g. how Reaching this ambitious target will require investments of USD 670 billion by
Not strong
“green“ hydrogen is defined in import markets like the EU. 2030 (USD 350 billion for wind and USD 320 billion for solar) and a total of
USD 3.4 trillion by 2050. On the positive side, the Middle East and Africa enjoy
Decarbonization and energy efficiency have driven ma- favorable conditions for wind and solar power, with more than 60% of total
jor recent shifts in regional policies, such as the partial energy demand located in regions with high wind and solar potential. Mak-
removal of the energy subsidies that have kept energy ing the required investments could potentially create around 1.5 million jobs How strong is societal support for
and water rates below economic cost for decades. Re- across the region. faster implementation in Africa?
ducing subsidies both lessens the financial burden on
governments and encourages consumers to use resourc- The Middle East has consistently been breaking records for the lowest levelized
es more efficiently. As a result, the pace slows at which cost of electricity (LCOE) in the world for photovoltaic plants. Notable projects
new capacity needs to be added. For example, the Unit- include the 2 GW Al-Dhafra solar PV IPP in Abu Dhabi, which has an LCOE of
ed Arab Emirates has implemented gradual reforms to USD 1.35 cents / kWh, and the 600 MW Al-Faisaliah solar PV IPP in Saudi Arabia, Funding
its fuel, water and electricity subsidies. These steps have with an LCOE of USD 1.04 cents / kWh.
been effective, but further action is now needed to re- Know-how
duce overall consumption without negatively impacting Technology
the competitiveness of the economy. Most pressing are Required renewable energy generation ­capacity (TW) in MEA to
maintain 1.5° goal and required investment Policy
policy reforms that are needed in decentral power gener-
ation, electric vehicles and carbon markets. 3.5 TW
Supply chain

Introducing carbon pricing will be a key future policy pil-

lar. Saudi Arabia and the United Arab Emirates are already
3.4 USD trillion What is preventing Africa from
considering establishing carbon markets. With COP27 13 × achieving sustainable energy?
taking place in Egypt and COP28 in the United Arab Emir-
ates, policy development is expected to speed up, with 1 TW
key regional governments looking to claim the first car-
bon market in the Gulf Cooperation Council (GCC). Re- 0.1 TW
gional governments are also hoping to develop policies
that encourage the expansion and boost the competi- 2020 2030 2050
tiveness of local green hydrogen ecosystems. Source: IRENA – World Energy Transition Outlook (2022)

10
Middle East and Africa Energy Transition Readiness Index

UN Climate
Conference in Egypt

“ COP27, followed by
The government of Egypt identified three main At COP27, the role of corporations will be par-
areas to guide the discussion at COP 27: ticularly important due to the limited action
The 1.5°C target that has so far been taken by governments. COP28 in the UAE, should
• Mitigation: Fostering unity behind the Having said that, globally only 10% to 15% of
To achieve the target of limiting 1.5°C goal – ”This year should witness the large corporations have set a target of at least focus on unifying Africa,
global warming to 1.5°C, global net implementation of the Glasgow pact call to 50% emission reductions by 2030. This trend
greenhouse gas emissions need to review ambition in NDCs, and create a work will accelerate as sustainability becomes a com- the West and the East, the
fall by 43% by 2030 and 84% by 2040 program for ambition on mitigation” petitive advantage.
compared to 2019 levels, according North and the South.
to the Sixth Assessment Report of • Adaptation: Manage extreme weather To utilize this competitive edge, businesses
the Intergovernmental Panel on Cli- events and the resulting impact on human can take a number of steps. One key priority is Francesco La Camera,
mate Change (IPCC). Emissions must life – “COP27 should witness enhanced achieving energy decarbonization, which must Director General, IRENA
peak at the latest by 2025, and net global agenda for action on adaptation, include securing access to green energy. Com-
zero CO2 emissions must be achieved confirming what we agreed on in Paris and panies can consider a three-pronged approach
some time in the 2050s. If current further elaborated in Glasgow pact with re- here: reducing consumption, producing green
trends continue, however, the in- gard to placing adaptation at the forefront electricity and switching to low-carbon alterna-
crease by the end of the century will of global action” tives. Companies can also focus on product de-
be 2.6°C. With this in mind, govern- sign and circularity, limiting their products’ car-
ments in the region have announced • Finance: Achieve progress on crucial issues bon footprint and rethinking their design and
strategies that should limit this in- of climate finance – “Progress on delivery of material mix or increasing circularity. Another
crease to between 1.8°C and 2.4°C. It the annual USD 100 billion will build more potential step for businesses is climate digitali-
is expected that more ambitious tar- trust between developed and developing zation, a process in which companies track their
gets will be introduced in the coming countries, showing that actual commit- progress and optimize their decarbonization
years. ments are being fulfilled” pathway with the help of digital tools and arti-
ficial ­intelligence.

11
Middle East and Africa Energy Transition Readiness Index

Energy priorities
in detail
Drive exit strategies for coal Accelerate renewables Drive carbon capture and storage Digitize the energy grid
Decarbonization requires a step-by-step phaseout of The speed of the expansion of renewable energy is Carbon capture and storage (CCS) is a technological A greater share of intermittent renewable energies
power and heat generation from coal. Strategies must strongly linked to the speed of decarbonization. How- solution for capturing emissions and storing carbon in makes it more challenging for power grids to main-
manage this while simultaneously ensuring a secure ever, technological, societal and bureaucratic barriers a way that lessens its climate impact. Decarbonization tain a secure power supply. The safe and reliable set-
supply of power and heat. Coal’s role in the transition partly impede progress. Lifting these barriers is key strategies must define the role of CCS technologies in up, maintenance and operation of the future energy
to carbon neutrality must be clearly defined within to speeding up the rollout of renewable energy solu- the transition toward climate neutrality. grid require new digital solutions.
these strategies. tions.

Implement energy storage solutions Power-to-X solutions Decarbonize industry (Scope 1, 2, 3) Sector coupling to decarbonize
The intermittency of renewables necessitates both The transformation of power to hydrogen and other Industrial production can generate significant carbon end-user sectors
short-term and long-term energy storage solutions. fuels enables the storage of otherwise curtailed re- emissions. These must be reduced across Scopes 1, All energy end-user sectors must be decarbonized
Technological and economic solutions must be de- newable energy. Additionally, power-to-X fuels can 2 and 3 in order to move toward a carbon-neutral in- to create a truly climate-neutral society. With an in-
vised to ensure that 100-percent renewable energy be used in hard-to-abate sectors such as aviation and dustry and society. The rollout of new production pro- creased share of renewable power generation, the
delivers a highly secure supply. shipping or high-temperature industrial processes. cesses and energy-efficiency measures must define a heating and mobility sectors can be decarbonized via
pathway to carbon neutrality. the electrification of end-user appliances.

Re-invent energy business models Design emission markets Just energy transition
Energy business models are a key enabler for fostering An overarching regulatory framework must ensure Social acceptance is an essential component of the
investment in decarbonization technology, for exam- the cost-efficient reduction of carbon emissions wher- energy transition. A fair energy transition further
ple, via contracting solutions. Solutions such as PPAs ever possible. Implementation of emission markets facilitates affordable energy supply, decent working
(power purchase agreements) and long-term trading and / or carbon pricing mechanisms is crucial in order conditions, as well as diversity and inclusion. Social
can secure payment streams over the investment pe- to align incentives across continents, countries and distortions must be avoided, as well as energy poverty
riod, which makes investments bankable and suitable sectors. and resistance to renewable energy.
for low-interest financing.

12
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