A new report reveals that the G20’s stimulus packages are weighted to support legacy energy systems; missing the opportunity to create jobs and accelerate the transition towards flexible, renewable-powered economies.
The Aligning Stimulus with Energy Transformation report, issued by global technology company Wärtsilä, presents the modelling of scenarios where the US and the UK focus their current stimulus packages for energy on measures that accelerate the energy transition, aligning economic recovery with decarbonisation.
In addition, the report provides viewpoints from the company’s experts in a range of other G20 countries, including Germany, Australia and Brazil.
Creating half a million green jobs in the US alone
In the US, if the current stimulus pledged to support legacy fossil fuel sectors ($72 billion) was allocated to advance modern, flexible, high-renewable power systems, over 100GW of new renewable energy capacity could be achieved.
The report also argues that this would 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
Furthermore, Wärtsilä has modelled a scenario for a carbon-neutral electricity sector for the US by 2035. The model demonstrates that a cost-optimal carbon-neutral power system could be achieved with 1,700GW of new wind and solar, supported by battery energy storage and flexible gas-fired power capacity operating on renewable bio- or synthetic fuels.
According to the report, a fully renewable power system would create 8.7 million jobs in renewable energy alone and have an expected investment cost of $1.7 trillion.
Crucially, the report reveals that to ensure the reliability of a renewable-powered electricity system, over 400GW of battery energy storage capacity and over 100GW of flexible gas power capacity, running on renewable synthetic fuels would be needed.
Over 150GW of electrolyser capacity for Power-to-X processes would be installed for the production of synthetic fuels. The company’s analysis illustrate how Power-to-X processes will be a key component for providing flexibility and stability for renewable power systems.
UK leveraging stimulus to reach a 60% renewable power system
The analysis identifies that current energy stimulus, if utilised to leverage private sector funds towards the energy transition, could help the UK to reach a 60% renewable power system and cut power sector emissions by 58%.
The system would have 60GW of renewable energy, supported by 7GW of battery energy storage and 14GW of flexible gas-based generation for flexibility. This would create over 120,000 jobs in the renewable energy sector alone and put the UK on track to meet its net-zero emissions target by 2050.
G20 countries “at the brink of a clean energy revolution”
Sushil Purohit, energy business president at Wärtsilä, said: “Across the G20 countries, the stimulus ‘scales’ are strongly weighted to support legacy inflexible power systems, despite the agenda for rapid decarbonisation that’s underway worldwide.
“In our modelling of two world-leading energy markets: the US and the UK – it’s clear that both countries stand at the brink of a clean energy revolution, that could provide a blueprint for other economies to follow. Refocusing stimulus towards renewable and flexible energy would accelerate this shift, create jobs and cut emissions.”
Read the full Aligning Stimulus with Energy Transformation report.
The report analysis is founded on two key sources, Wärtsilä’s Atlas of 100% Renewable Energy, and the Energy Policy Tracker.