The ongoing war between Russia and Ukraine has disrupted markets in a significant way. Supply chain challenges and major price hikes are some of the major effects that are being felt across the globe. Oil and gas prices have risen and with the decrease in supply, demand for fossil fuels has also increased significantly, which some now consider a setback to the green energy sector.
Nonetheless, this ongoing situation can also be an opportunity for the green energy sector. At industry level, companies that are heavily reliant on fossil fuels are more and more questioning the sustainability of this reliance and looking to complement or replace fossil fuels with renewable energy sources. The same introspection is happening for countries whose grids are not green.
Green energy is collected from natural sources such as the sun and wind and does not release pollutants into the air.
The Intergovernmental Panel on Climate Change report – IPCC, launched in 2019 identified pathways to curb global warming to 1.5 degrees C. The report pointed out some key aspects, such as the need for swift modifications in all our systems to avoid worse climate impacts and the need to decarbonize our economies.
The Covid-19 disruption
The Covid-19 pandemic struck when most of the Sub-Saharan African countries were still struggling to achieve SDG 7’s clean and affordable objectives. The economic and social disruption has been felt everywhere globally, with the gains made on reduction of extreme poverty being eroded as more households fall below the poverty line.
Investment In renewable energy can be one way to reverse these negative impacts. “Green investments can be an important part of recovery packages, lead to job creation and positive economic outcomes, and help address climate change,” read a report from the World Resources Institute (WRI), a U.S.-based think-tank.
There’s a growing market opportunity for companies investing in renewable energy. The energy demands are constantly rising globally and with the growing need and urgency to diversify from fossil fuels, this demand can only grow. According to the US Energy Information Administration (EIA) the worldwide consumption of energy is projected to increase by nearly 50% between 2018 and 2050.
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A Bloomberg New Energy Finance study found that global investment in transitional technologies reached $755 billion in 2021. To stay on track for reducing net carbon emissions to zero, investment in transitional energy will have to get over $2 trillion between 2022 and 2025 and $4.1 trillion over 2026-2030.
Coming closer home, companies like Kenya Climate Ventures have been at the forefront of advocating for this evolution. The company has been supporting innovators such as Vuma biofuels, Sunken limited, Kings biofuels, Acacia Innovations Rafode Ltd, and Ofgen Ltd, which invest in renewable energy solutions.