Problems of financing the global energy transition

Abstract

Aim. To identify the features of the global energy transition at the international level and assess the feasibility of its implementation in the given timeframe, taking into account available data on the financial resources allocated for this purpose.Tasks. To analyze the main trends in the global energy market in the modern conditions, putting an emphasis on the post-COVID period, to identify the main factors influencing the financing of the energy transition at the international level and the amount of investment necessary to achieve the goals of “net zero”.Methods. The study analyzed statistical data from representative sources of Goldman Sachs, BloombergNEF, LevelTen Energy, IRENA, Climate Bonds Initiative and others, which made it possible to identify current and longer-term (2008-2023) trends emerging in the global energy market.Results. The global energy transition process appears to be long-term, despite what has already been achieved in the global energy sector, as well as digitalization incentives and opportunities. This restructuring could prove beneficial for both alternative and conventional energy sources. In order to analyze the current situation and identify trends in the global energy market, the main influencing factors are highlighted: high fossil fuel prices, accelerated implementation of environmental technologies, cheaper clean technologies, and reorientation of energy supplies. This trend was evident in developed countries even before the COVID-19 pandemic and is spreading to more and more states, including developing ones. However, the financial resources currently allocated for its implementation are insufficient, which may result in failure to reach the zero goal by the target date of 2050.Conclusions. The findings of this study have confirmed the intensified use of renewable and alternative energy sources, which is generally consistent with the goals of the global energy transition. It revealed a significant influence of the political factor, as well as such factors as safety, costs and environmental friendliness. It is concluded that more funding is needed, especially in the sectors that are difficult to reduce emissions (cement production, steel production). There is a need for investment in renewable energy (RE) not only in developing countries, but also in developed countries. Since it is a question of creating reliable long-term access to clean energy, the solution to the global energy transition trilemma requires intensified investment in renewable energy and the expansion of sustainable financing at the international level in general.