The Energy Transition
On 23 February, in Canning House’s third Sustainable Development series event, we focused on Latin America’s energy transition.
Reimagining our annual Renewables Conference for 2021, we examine top trends in solar, wind and water power, and ask key questions as to how major oil & gas companies are addressing their green ambitions. We also address the role and impact on the consumer, raising questions of affordability, regulations and investment opportunities.
Canning House's Sustainable Development series of events and conferences focuses on the themes of the United Nations' 17 Sustainable Development Goals and the aims of the 2021 UN Climate Change Conference (COP26) in a Latin American context. This event addresses SDG #7 Affordable and Clean Energy.
With support from Eversheds Sutherland and the Foreign, Commonwealth and Development Office.
Following words of welcome from Cristina Cortes, CEO of Canning House, Dr Cho Khong, Chief Political Analyst at Shell and a Trustee of Canning House, delivered an overview of the global energy landscape.
Shell’s Energy Transition Scenarios
Against a background of tensions in technology and inequality, Cho described three scenarios for climate change in the 21st century, as the world builds back better from the Covid-19 crisis – Waves, Islands and Sky 1.5 – respectively prioritising Wealth, Security and Health.
Shell’s analysis shows that the Waves and Islands scenarios would lead to an intensification of the climate emergency – with well over 2°C of average global temperature rise. Conversely, the wellbeing-first approach followed in Sky 1.5, with focus on green investment and deep structural changes, accelerating decarbonisation immediately, would limit the rise to 1.5°C by 2100, in line with goals set in Paris.
Panel discussion: What the Energy Transition means for Producers, Investors and Consumers
Our panel was chaired by Stephen Hill, Partner for Energy and Infrastructure at Eversheds Sutherland. The discussion was wide-ranging, with inputs from leading experts across Latin America’s energy sector and international investment bodies. The panel spoke on their ambitions for clean energy in Latin America, with audience views on the subject gathered via live polls.
Bart Doyle, Group Chief Operating Officer and Executive Director at Mainstream Renewable Power, discussed the great potential for both solar energy and hydrogen in Chile, one of the company’s largest global markets. Hydrogen in particular could allow Chile become a net energy exporter, taking control of its energy future.
From the global investment management firm Blackrock, Rael McNally, its Director for Alternative Investments in Clean Energy and Infrastructure, discussed the huge opportunity Latin America presents for international investors. As a region set to experience both economic and population growth in years to come, he put forward that now is the right time to enter the Latin American clean energy market at scale.
Viviana Coelho, Executive Manager for Climate Change at Petrobras, Brazil’s state-owned oil corporation, discussed the role of oil and gas in the energy transition. Due to the sheer scale of oil and gas infrastructure, she emphasised the enduring need for carbon competitiveness – with only low cost, low carbon fossil fuels remaining viable as the world shifts to clean energy sources.
Dr Cho Khong also joined the panel, adding to his earlier presentation with his thoughts on the importance of biofuels, solar energy and nature-based solutions to offset global emissions. On fossil fuels, he highlighted the role of natural gas as a clean bridging fuel during the energy transition. He also raised the crucial role of hydrogen – with Shell unable to envisage a net-zero energy landscape scenario without its widespread adoption.
Simon Whistler, Senior Specialist in Real Assets at Principles for Responsible Investment, discussed the essential importance of carbon capture systems, which will need to begin widespread operation quickly if targets are to be met. Addressing the challenges of scale and cost associated with this process, he said that concerted international government support for programmes would be crucial.
The panel then discussed the impact on the consumer, emphasising the need for those most affected by the energy transition to be recognised and considered, avoiding potential separations in society. It was stressed that Latin America’s energy landscape varies hugely across the continent, and that solutions to draw the system together at scale would be essential to a successful transition. Political instability and level playing-field issues were also given as likely challenges.
Finally, if given the opportunity to change one thing in the energy transition, our panel offered the following: pursuing a long-term regulatory perspective, implementing a carbon tax, tackling social issues, taking an integrated approach, and ensuring equality to guarantee the transition’s beneficial impact for all.