Speaking at the annual energy industry event ADIPEC 2024 in Abu Dhabi, Hiroshi Hagiwara, President Director Abu Dhabi, INPEX Corporation, shared his views on the evolving energy trilemma, urging a balanced approach between energy security, affordability, and sustainability for a net zero carbon future. Following are the key insights.
The global energy sector faces an energy trilemma that challenges its future by balancing energy security, affordability, and sustainability. The transition towards decarbonization has evolved from being a top challenge to a component of a wider puzzle. Today, energy companies are confronted with the dual challenge of meeting growing energy demand and keeping within climate goals. Carbon capture and storage (CCS), expansion of renewable energy projects, and international collaboration are key strategies. These are efforts that show businesses are adapting to the short-term needs and the long-term sustainability needs.
Until recently, the energy industry's primary challenge was decarbonization as a result of climate change concerns. But as the energy sector has come to this new more complex dilemma, the focus has changed. Reliable and affordable energy must be aligned with sustainability. It is a signal of a growing recognition that a net zero-carbon society will not be a linear or uniform journey. Tailored approaches will be needed for countries and regions based on their own special energy needs and circumstances. Some will accelerate the transition to renewable energy sources while others will need to rely on transitional technologies like co-firing ammonia to reduce carbon emissions in places that rely heavily on fossil fuels.
It is now realized that a one-size-fits-all approach is not sufficient, and therefore, diverse pathways must be taken into account. Energy infrastructure and economic realities dictate the speed and methods of a net-zero carbon society. For example, the rapid shift of renewables could be possible in some regions, while the other regions would have to rely more on fossil fuels and would need to have a hybrid solution, for instance, ammonia co-firing until alternative energy infrastructure is in place.
Social responsibility and business opportunity are the business response to this evolving landscape. Being an energy developer, it is not just about meeting the energy demand, but also about making energy supply as decarbonized as possible. Companies must continue to ensure a stable supply of energy and place an emphasis on efforts to make the energy cleaner, lowering emissions while securing a reliable energy future. The CCS initiatives represent an inherent business opportunity to develop new technologies and projects in the field of decarbonization.
While the development and integration of carbon capture technologies is a key strategy for decarbonization, none of the current CCS venture cases has proven to be enough to warrant a commercial-scale investment. One example of this is the EXTX LNG project in Australia which will eliminate its carbon footprint by injecting CO2 originating from excess gas condensate into a subsea carbon storage site. It is an important step toward decarbonizing existing infrastructure by retrofitting it with CCS technology. In Indonesia, the Abadi LNG project will also include CCS from the start, highlighting the need to design clean energy solutions from the beginning of a project’s lifecycle. With existing fossil fuel infrastructure unable to be bypassed in the near term, these initiatives demonstrate how CCS will be a key component of achieving net zero goals.
In the case of Abu Dhabi, where the facilities have been in operation for more than 50 years, efforts are underway to modernize and decarbonize existing facilities. Upstream operations will be electrified and CCS technologies will be implemented in production facilities to reduce greenhouse gas (GHG) emissions and secure the sustainable supply of energy. The important part in ensuring energy security during the transition period is to focus on modernizing infrastructure as much as we enhance the stability of energy production.
INPEX Corporation has been moving into renewable energy projects while continuing to develop cleaner fossil fuel solutions. An example of this is the acquisition of a 50 percent share in Enel Green Power Australia to demonstrate a commitment to a broad range of renewable energy projects. This is an indication of the ever-increasing need to integrate renewable energy into the overall energy portfolio in moving towards a greener energy future. In addition to strengthening the company’s business position, the diversification of energy sources supports the general goal of a low-carbon energy mix.
An innovative approach to scaling up carbon capture and storage is the company’s involvement in Japan’s advanced CCS projects, in which CO2 is transported from industrial zones to underground formations via pipelines. This initiative further underscores the need for intergovernmental, industrial, and business collaboration to create large-scale, practical solutions to reduce the carbon footprint of industrial activities.
Because decarbonization goals are not achievable in isolation, no single organization or country can achieve the energy transition. It requires strong partnerships – across energy, but also from other industries, governments, and research institutions. More than technology development, it is about building a cooperative spirit to tackle a problem and share best practices and resources.
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