Baku COP29 forum will navigate a contentious energy transition path
Currently, renewable energy accounts for about 17 percent of global total final energy consumption, with renewables accounting for about 40 percent in power generation sector.
Baku, the capital of Azerbaijan and venue for COP29 in November, is among the oldest commercial oil production locations in the world, going back to early last century.
The chairperson of COP29 is a former executive of Azerbaijan state oil company. This mirrors COP28 organisation in UAE last year, confirming increasing oil producers influence in global climate agenda stewardship.
The Baku meeting will mostly focus on extent and pace of energy transition from fossil fuels to renewable energy.
Currently, renewable energy accounts for about 17 percent of global total final energy consumption, with renewables accounting for about 40 percent in power generation sector.
Kenya’s share of renewables in power generation is an impressive 90 percent, with oil taking nearly all transport energy.
Agreeing on when oil demands will peak and commence a decline is a very contested issue. While the oil industry argues that oil demands will be on the rise beyond 2050 and that new oil production is needed, IEA (International Energy Agency) sees an earlier oil demand peak by 2030. Reconciling oil demand projections gaps is a critical COP29 action item.
Currently, oil consuming nations are more focused on energy security and affordability, economic and political stability than climate policies. These nations are still recovering from economic downturns created by Russin invasion of Ukraine in 2022.
Cautious climate policy ambiguity has given a free hand to oil industry and renewables investors to compete in defining the energy transition path.
With targeted policies, China has surprised many by taking global leadership in renewable technologies and investments , creating a mammoth economic boom out of energy transition.
This development has scared western nations into imposing restrictive tariffs and policies to limit China’s exports of EVs, solar and wind equipment, essentially slowing down global energy transition. China is no longer the climate laggard of yester-years, but a major driver of global energy transition.
On the other side of the energy transition divide, massive investments in new oil production are taking place offshore Guyana, West Africa, and Namibia, as developments in Uganda onshore oil gather momentum, with Kenyan oil still in doubt.
LNG investments in Mozambique and Tanzania are on top gear. My assessment is that renewable energy technologies and investors, assisted by enabling energy and climate policies, will determine the ultimate pace of energy transition to a carbon neutral world. I also believe that oil will remain in significant demand towards 2050.
Developing countries will need to create conducive governance systems and investment friendly policies to attract sufficient climate capital to upscale renewable energy uptake.
