Without a decarbonized power sector, it’s virtually impossible for other industries to hit their Paris Climate Agreement targets. At the same time, such a transition must take place while preserving system resiliency and sustainability. In this installment of our Pathways to decarbonization series, we explore how the hard-to-abate power sector can tackle these challenges while simultaneously accelerating its path to net-zero.
The state of play
Electrification and renewables will play a crucial role in a net-zero world—and many incumbent players, new entrants, policymakers, investors, and customers are pushing hard in this direction by transforming existing business models and seizing new opportunities for growth and innovation.
That said, this transition faces several challenges. For one, because the sector is marked by significant regional differences related to local factors such as current power generation mix, policy ambition, and access to electricity, a one-size-fits-all approach doesn’t exist.
Additionally, the sector must find ways to transform entire supply chains and workforces; ease overloaded administrative and regulatory bodies; preserve system stability as more renewable energy sources come onstream; engage customers to play a more active role; address social inequality issues; and expand in-sector financing capacity.
The way forward
In spite of these challenges, it is possible for the power sector to accelerate its journey to net-zero so that other power-consuming sectors may follow—and there are signs the needle is already moving in the right direction.
Customers’ demands for low-carbon solutions continue to grow—for things like electric mobility solutions (batteries and hydrogen fuel cells) and heat pumps—while industrial demand for electrification is also on the rise. New technological advancements in areas like utility-scale solar photovoltaic (PV), wind, and energy storage are reshaping the sector—while other technologies like small nuclear reactors, biomass, hydro, geothermal, and distributed generation are swiftly entering the scene.
To continue moving forward, the industry must keep pushing for more regulatory certainty, swifter permit processes in all key markets, and the availability and readiness of the necessary technologies.
Read the full report to learn more about Deloitte’s recommendations.
About Pathways to decarbonization
The Pathways to decarbonization series is a collection of insights on the challenges, opportunities, and viable decarbonization pathways for high-emitting and hard-to-abate sectors. Each of the sector perspectives offers a foundational starting point for leaders who would like to better understand the landscape across these critical sectors.
Explore “Recommendations” below for more in-depth power, energy, and climate-related reports.