A realistic guide to understanding clean energy infrastructure

A clean energy transition is pivotal to ensuring a sustainable energy future, made even more urgent by geopolitical tensions, COVID-19 economic rebound, and extreme weather conditions. According to SHOCKED, GHD’s recent report, localised, secure, and resilient supplies, sources, and production of energy then become crucial. Still, significant challenges in infrastructure and investments exist. In understanding these hurdles and charting a course for progress, it is critical to examine the assets, technologies, sectors, and investments involved. 

The International Energy Agency’s 2022 World Energy Investment report estimates a 12 percent growth rate of clean-energy investment in 2020, five years after the Paris Agreement was signed. More is needed to reach the global climate targets. 

BloombergNEF reports that last year, renewable-energy investments amounted to US$495 trillion, with China holding the biggest share at 55 percent and investing US$109 billion in wind farms and US$164 billion in solar farms. The United States and the European Union come next, putting in about US$50 billion and US$39 billion, respectively.

While money is available, inconsistent or inadequate policies and regulations can discourage private-sector investment, create uncertainty, and deter project development. In a Reuters-GHD white paper entitled “Progress Paralysis: Accelerating the Energy Transition,” Anna Jakobsen, the Europe and Middle East leader for sustainability, resilience, and ESG at GHD, says, “The absence of high-quality transition plans hinders the ability to make better-informed decisions about how to allocate capital.” She notes the development of various national and regional strategies, but the required infrastructure needs to be identified.

Some communities and countries may be unable to achieve affordable and clean energy, the seventh Sustainable Development Goal set by the United Nations, because financial barriers and perceived risks curb access to capital for clean-energy projects. In the EMEA region, for example, Africa and the Middle East have a 472 GW capacity pipeline, but only 270 GW is clean, while less-populous but richer Europe has 712 GW clean energy in its 829 GW capacity pipeline. 

 While energy transition is costly, funding, tax credits, and innovative financing mechanisms like green bonds, impact investing, and public-private partnerships can be used simultaneously to mobilise capital. 

With the pressure to reduce emissions faster, industries must decide which infrastructure assets to discard, build, upgrade, or retrofit and which technologies to adopt. Developing, scaling up, and deploying emerging clean-energy technologies require substantial research and investment. 

Water-based decarbonisation, specifically through water-efficient green hydrogen production, may be instrumental in making a responsible energy transition. Electrolysis offers a clean fuel alternative for industries and transportation, while water-based solvents can be used to capture CO2 emissions from industrial processes, mitigating the environmental impact. 

Investments in grid modernisation and energy-storage technologies, like batteries and pumped hydro, are necessary to efficiently integrate intermittent renewable sources like wind and solar energy or water resource recovery facilities into the energy system to address grid instability and unreliability. Also, bBiofuels extracted from wastewater can power the electric grid, and the excess energy can purify water. 

Governments, businesses, investors, and stakeholders must meet infrastructure requirements, adopt novel technologies, establish a secure regulatory environment, and invest in research and development to ensure a clean transition. Resilient, sustainable, and technologically advanced infrastructure wills pave the way for economic growth, job creation, and an equitable future.