Sustainable energy supply

The extraction of primary fossil fuels, their subsequent processing and the ensuing use of fossil-based energy is responsible for around two thirds of global greenhouse gas (GHG) emissions. According to the IPCC, restricting the global rise in temperature to 1.5 °C will require decarbonisation of the energy sector worldwide by 2050. Achieving this will require improvements to energy efficiency in all sectors, such as buildings and manufacturing, which is one of the most economical and effective ways to achieve GHG mitigation, alongside reducing the absolute growth of the energy sector. On the energy generation side, exiting from the extraction and use of fossil fuels is the primary focus. Accordingly, the energy demand must be correspondingly met by the use of renewable energy sources. In the electricity sector, this will also involve meeting demand by expanding power grids, using intelligent demand-side management and deploying innovative storage technologies. 

More than 90 percent of countries have announced measures targeting the decarbonisation of the energy sector as part of their nationally determined contributions (NDCs). Significant increases to the ambition levels stated in both NDCs and LTS are needed, however, in order to fully decarbonise the energy sector in the coming decades and implement the Paris Agreement

Networking power, heat, cooling and transport - what needs to be done 

Full decarbonisation of the economy will also require an increasing rate of electrification in ‘new’ application areas – such as the transport sector, for example. To this end, technical, economic and management solutions for sector coupling will need to be provided and trialled – in short: greater integration will be required between power, heat, cooling and transport. A greater degree of flexibility will also be required for energy systems. The aim is to integrate very high proportions of renewable energy into the grid, while also minimising the throttling-back of renewable power plants and therefore accelerating the phase-out of energy production from fossil fuels.

Cities and regions have an important role to play in the planning and provisioning of the relevant infrastructure, such as for remote heating grids, charging infrastructure and electrically powered public transport systems.

A ‘just transition’ for the energy sector 

The fundamental restructuring of energy systems and markets is not merely a technological hurdle but also a socio-economic challenge. For this reason, International Climate Initiative (IKI) projects are helping to contribute to the just transition: away from a coal-, gas-, and oil-based economy, and towards an economy that is founded on renewable energy and the implementation of efficiency measures to achieve significant reductions in electricity consumption. 

In this context, political and social dialogue are two approaches for addressing socioeconomic aspects over the long term (and particularly local jobs, regional structural change, environmental policy impacts and health), and for developing guidelines to provide support for policy-making decisions. Another important aspect for energy sector transition is the provision of technical consulting services to established players like utility companies. 

Use of green hydrogen and Power-to-X as a key technology

In some sectors, decarbonisation and the substitution of fossil fuels can be achieved in specific fields of application only by the use of green hydrogen and its downstream products – by using what have been termed ‘Power-to-X’ (PtX) technologies. This involves the use of power from renewable sources to create ‘green’ hydrogen as a first step in the process of manufacturing gas and liquid fuels. 

BMU unveiled its PtX Action Plan a while back, in summer 2019. The German Government’s national hydrogen strategy therefore acknowledges the increasing importance of hydrogen. Green hydrogen and PtX are important for climate change mitigation in sectors and industries where more efficient technologies cannot be deployed for the foreseeable future. This applies in particular to the steel and chemicals industries, and some parts of transport (especially aviation and shipping). This is where the targeted use of green hydrogen can form an integral part of work towards achieving a carbon-neutral economy. 

IKI is therefore supporting partner countries to address the underlying environmental and climate policy aspects of developing a national hydrogen policy as well as market ramp-up for green hydrogen and PtX. On the delivery side, IKI is supporting topics related to sector coupling and local applications in harmony with climate policy. Alongside local policy and technical support, efforts are also being made to network national and international players in order to leverage synergies.

Co-benefits of the energy transition 

The expansion of renewable energies and introduction of measures targeting energy efficiency offer significant benefits for the economy, society and climate protection. This also applies in particular for developing and emerging countries, who benefit from improvements to the security of supply and reductions to energy imports. Investments guarantee long-lived value chains and job creation is stimulated. In cities in particular, the health and the well-being of their inhabitants is improved by energy-efficient and low-carbon buildings, while local air pollution is also reduced. 

Yet economic, energy and climate policy have often been considered as separate issues in the past. To tackle this discrepancy, IKI projects support efforts to raise awareness among partners, and to analyse co-benefits as an important, additional goal beyond that of climate change mitigation. 

Funding area: Mitigating greenhouse gas emissions

Promoting the energy transition