OPEC Secretary General Haitham Al Ghais emphasizes that electrification is often misrepresented as a direct rival to oil, perpetuating the myth that these energy sources operate in isolation.
OPEC asserts that oil and electrification coexist and complement each other, particularly as petroleum products play crucial roles across various sectors, including electricity generation and transmission. Petroleum-derived products are integral to the electricity sector, used in everything from the manufacturing of solar panels and wind turbines to the insulation materials for underground and subsea cables.
For instance, transformer oil, a key component in electrical transformers, is primarily made from mineral oil, which is a petroleum distillate. The functionality of transformers and the stability of electrical energy transmission depend on these oil-based products.
As the world aims to achieve ambitious net-zero targets by 2050, the electricity generation needed is projected to increase significantly. This expansion will require the construction of vast amounts of grid infrastructure, which in turn relies on various petroleum products. OPEC warns that halting investments in oil projects could jeopardize the supply of these essential materials, ultimately affecting the reliability and expansion of the electricity grid.
As OPEC notes, the world currently generates between 27,000 and 30,000 Terawatt hours (TWh) of electricity. According to research by the Energy Transitions Commission, in a report entitled, ‘Making Clean Electrification Possible: 30 Years to Electrify the Global Economy,’ this would need to increase to between 90,000 and 130,000 TWh to achieve net zero greenhouse gas emissions by 2050. That is a 3.5 to 5-fold increase in electricity generation in a less than 30-year timeframe.
They advocate for recognizing the interconnectedness of energy sources to effectively address future energy demands, reduce emissions, and ensure energy security.
To remind, DNV‘s Maritime Forecast to 2050, had found the shipping industry will find it challenging to secure enough supply of carbon-neutral fuels. Thus, the report advised that industry stakeholders should be flexible and look at various options to reduce emissions.
