A new report from global technology company Wärtsilä has revealed that the G20’s stimulus packages for energy, announced as part of countries’ response to the impact of the COVID-19 pandemic, are weighted to support legacy fossil fuel energy, missing the opportunity to create new green jobs and accelerate the transition towards flexible, renewable-powered economies.
G20 governments have so far committed at least $145 billion USD towards supporting clean energy, as part of economic stimulus measures to recover from the impact of the pandemic. However, this is a third less than the $216 billion USD total that has been committed to supporting fossil fuel energy. This represents a significant missed opportunity to accelerate the pace of the transition to clean energy worldwide.
To show the impact that focusing economic stimulus on supporting clean energy could deliver, Wärtsilä’sreport – Aligning Stimulus with Energy Transformation – has modelled scenarios where key G20 countries, including the United States and the United Kingdom, focus their entire current stimulus packages for energy on cost-optimally increasing renewable energy, aligning economic recovery with decarbonisation.
Creating half a million green jobs in the US alone
In the United States, if all of the current stimulus pledged to support legacy fossil fuel sectors ($72 billion USD) was allocated to advance the energy transition towards renewable, flexible power systems, over 100 GW of new renewable energy capacity could be achieved. This could result in over 500,000 new jobs in renewable energy – 175% more new jobs than if stimulus was focused on legacy, inflexible energy systems.
Modelling a carbon neutral US by 2035
To assess the full impacts and technology needs of the cost-optimal transformation to renewable energy systems, Wärtsilä modelled a scenario for a carbon-neutral electricity sector for the United States by 2035. The model demonstrates that a cost-optimal, carbon-neutral power system could be achieved with 1,700 GW of new wind and solar, supported by battery energy storage and flexible gas-fired power capacity operating on renewable bio- or synthetic fuels. The fully renewable power system could create 8.7 million jobs in renewable energy alone, and have an expected investment cost of $1.7 trillion USD.
To ensure reliability of a renewable-powered electricity system, the Wärtsilä report reveals that over 400 GW of battery energy storage capacity and over 100 GW of flexible gas power capacity, running on renewable synthetic fuels, would be needed. Over 150 GW of electrolyser capacity for Power-to-X processes would be required for the production of synthetic fuels.
Technologies for replacing costly, inflexible thermal generation capacity exist today and Wärtsilä’s analysis illustrates how Power-to-X processes – which produce carbon neutral, renewable synthetic fuels by capturing CO2 emissions and synthesizing with renewable hydrogen – will be a key component for providing flexibility and stability for renewable power systems.
Leveraging energy stimulus to reach 60% renewable power in the UK
Wärtsilä’s analysis found that UK energy stimulus, if utilised to leverage private sector funds towards the energy transition, could enable a 60% renewable power system and cut power sector emissions by 58% compared to current levels. This investment would put the UK on track to meet its net-zero emissions target by 2050.
An optimal 60% renewable power system would consist of 60 GW of existing and new renewable energy, supported by 7 GW of battery energy storage and 14 GW of flexible gas-based generation for flexibility. This could result in over 120,000 jobs in the renewable energy sector alone – 175% more jobs than focusing stimulus on rebuilding legacy energy systems.