The energy revolution – a shift in the primary energy supply
„Friends, it is up to all of us to sustain our lodestar of keeping 1.5 degrees within reach” COP26 President Alok Sharma emphasized at the last Conference of the Parties (COP) in November 2021, reaffirming the Paris Agreement objective for limiting global warming to well below 2, preferably to 1.5 °C above pre-industrial levels.
At the center of this effort, there is a fundamental shift away from the combustion of fossil fuels towards renewable energy sources – an energy revolution with far reaching consequences on society as well as various economic players.
Today fossil fuels are still the largest primary energy source for electricity generation. However, in net zero scenarios, renewables are expected to provide between 80% and 90% of electrical capacity by 2050. In this regard, wind and solar energy will play a particularly important role.,
New business strategies for change
As electricity and heat from fossil fuels is the largest generator of carbon emissions, the required changes are especially significant for the energy sector: As of today, most energy players are committed to drive the energy revolution. Many oil and gas companies are already reshaping their business portfolios, also increasing their investments in low and zero-carbon energy sources. Furthermore, major utility companies plan to extensively develop their power generation capacity from renewables.
Implications for logistics
However, the renewables supply chain faces different challenges: Power generation will move from large, centralized fossil fuel power stations to a greater number of smaller, decentralized renewable energy systems for wind and solar for example, producing energy within a more fragmented market. While more decentralized and distributed power generation will drive the importance of logistics demand, the limited availability of logistics assets and services increases costs. The smooth operation of complex, decentralized, and often global renewable energy supply chains will additionally require better visibility and control. Besides, continuously reducing the environmental impact of business operations calls for emissions reductions in the supply chain towards more sustainable logistics itself.
Nowadays, logistics is already a challenge for the renewables sector, not only due to constraints on critical equipment such as specialized vessels for the transportation of large wind turbines. Also, to manage the rapid increase in scale demanded by the net-zero transition, logistics in the renewables sector will need to innovate. Opportunities are particularly seen in advances in visibility and demand prediction helping to plan and operate increasingly complex and distributed logistics networks. Technology-driven approaches to monitoring and maintenance of renewables assets become essential as well as it helps improving reliability and availability (e. g., digital twins and the use of drones). In addition, with logistics being an energy-intensive business, new logistics management processes and new technologies to reduce the CO2 emissions in the supply chains become even more important.
Logistics challenges will be critical to the success of the net-zero transition and energy companies need to consider logistics as an important aspect in terms of business viability as well as profitability. For this, the key will be the successful collaboration between logistic service providers and energy companies throughout the whole value chain.
For more information on …
- the increasing demand for renewable energy generation capacity
- how the energy industry is changing, and which different strategies are pursued by energy companies
- the supply chain implications for large-scale renewable energy deployment in the context of wind and solar
- innovative logistics for the energy revolution and the key areas to focus for organizations involved in the transformation
…visit the website of our partner DHL.com to sign up and download your complimentary copy of the white paper “Logistics of the Energy Revolution” today.
 https://ukcop26.org/cop26-president-remarks-at-closing-plenary/ (14.03.2022)
 Net Zero by 2050 A Roadmap for the Global Energy Sector, 2021, IEA
 World Energy Transitions Outlook 1.5°C Pathway, 2021, IRENA