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Which energy sources will power the 21st century?

Laura Gaze  Director, Enterprise Communications and Thought Leadership

Laura Gaze  Director, Enterprise Communications and Thought Leadership

Electricity. It’s the lifeblood of the modern world, powering our homes, offices, communities, tech gadgets … just about everything we use to sustain 21st century existence.

But there’s a sea change coming. Government and environmental mandates, combined with commitments such as the one made at the Paris Conference of Parties (COP21) in December 2015, are defining future sources of electrical power.

To map that sea change, we investigated the current electrical power landscape, drawing from multidisciplinary data and the insights of industry experts. The result is Powering the Planet, a comprehensive multi-media report outlining business considerations around electrical power production through the coming decades.

Fossil fuels vs. renewable energy

Renewable energy, namely from sun, wind and water, has been a growing part of the energy mix over the years. Nevertheless, it still remains a mere fraction of overall global energy generation, with fossil-fuel sources continuing to represent the lion’s share today.

This scenario is about to change, however. In order to reduce global warming and our carbon footprint, we need to change the sources of energy on which we rely. To preserve our planet for future generations and overcome the risk of the Digital Age’s environmental waste, we need to capitalize on technologies that will be viable, scalable and meet environmental mandates.

A confluence of factors such as carbon pricing and carbon taxes, stranded assets, natural-gas litigation and global innovation investment are making electricity from fossil fuels unsustainable. Sources like natural gas and clean coal do not curb the levels of greenhouse gas emissions required to meet agreed-upon goals at the national and global levels.

According to Stig Schjolset, head of carbon research and forecasts, Thomson Reuters Financial & Risk, “In order to meet the overall targets agreed in the Paris Agreement, the level of ambition – which in the end determines the price on carbon allowances – must be significantly increased over the next [few] decades. If the big emitters are able to move forward in such a coordinated way, it might be possible to scale up the climate ambition significantly.”

Stig Scholset on the value of carbon pricing

Approximately 6.2 gigatonnes of emission allowances and offsets, valued at roughly 50 billion euros, were traded globally in 2015 according to the Thomson Reuters Point Carbon team. 2012 was the most recent banner year for trading.

World carbon markets (2010-2015)

Total value and volumes by segment

Chart shows world carbon markets are on an upward trend
Source: Thomson Reuters Eikon & Point Carbon

Expectations for 2016 are for volumes to rise slightly above those in 2015, with prices closing higher at year end and the overall value of carbon markets growing by a quarter. Emissions trading is just one of several factors that plays an important role in the future of energy.

Alternative energy leaders

Powering the Planet predicts that the energy technologies that will gain a dominant position in the next few decades are solar photovoltaics, hydro-wave and nuclear fusion.

Percent change in electrical power-related innovation activity (2010, 2015)

Changes in innovation activity (which reflects where R&D budgets are being allocated) over the last six years, including top energy sources and the number of unique inventions protected with intellectual property rights

Category Unique Inventions 2010 Unique Inventions 2015 % Change
Clean Coal 567 1,595 181
Solar Photovoltaics 6,759 17,569 160
Coal 2,180 5,251 141
Natural Gas 773 1,725 123
Petroleum 4,643 10,002 115
Nuclear 1,606 2,909 81
Hydrowave 2,733 4,712 72
Wind 4,582 7,261 59
Solar Thermal 5,665 6,205 10

Source: Derwent World Patents Index

The largest basis-point innovation increase has been in clean coal, however the most active area and second highest percent change is in solar photovoltaics, with nearly 11,000 unique inventions over those years.

Asia is the region with the majority of leading energy-related technology companies.  The view of top innovators across energy sources changes as you drill into specific technology areas, however overall Asia remains the global leader in innovative technologies contributing to the production of electrical energy.

Leading organizations in energy-related innovation (2010-2015)

Graph shows leading energy technology innovators are Mitsubishi, Sinopec and GE
Source: Derwent World Patents Index

Learn more

Drill down into specific electrical-energy sources, global innovation leaders and important business considerations as the energy landscape shifts in the full Powering the Planet report.

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