No fewer than 1.1 billion people across the world have no access to electricity, Anglo Dutch firm Shell has said.
It said there were another three billion who still relied on solid fuels such as firewood or dung for cooking and heating.
In its 2017 Energy Transition Report released at the weekend, the oil major said one of the toughest challenges facing the society is how to provide energy to a growing world population, while reducing the greenhouse gas emissions that contribute to climate change and to air pollution. This, it said affects people around the world.
Shell said the energy system is the result of many decades of choices by consumers, suppliers and governments. Societies, it said, want energy that is reliable, widely available and affordable. The oil giant said currently, hydrocarbons account for more than 80 per cent of the energy mix.
The report noted that as a way forward, governments took a great stride forward in 2015, by coming together in Paris to reach a landmark agreement to tackle climate change. Th report said Shell welcomes and supports the Paris Agreement and the ambition to limit the global rise in temperatures to well below two degrees Celsius (2°C) above pre-industrial levels.
The report read: “It is an ambition that will depend on unprecedented collaboration between governments, companies and society, and crucially, realism about the challenges ahead. It requires a transformation in the way energy is produced, distributed and used.
“Capital investment measured in trillions of dollars over decades will be necessary to finance both new sources of energy, and to adjust existing infrastructure. It will also be necessary to change how energy is consumed, as a vast range of capital assets that consume energy – from homes, domestic appliances, vehicles, machinery and entire industries – will need to be adapted or replaced.
“The solutions will vary by economic sector. Some, like clothes and food manufacturing, require low temperature processes and mechanical activities, which electricity is well suited to deliver. These can therefore be powered by low and zero carbon sources of power, including renewable energy.
“Other sectors, such as the iron, steel, cement, plastic and chemical industries, and certain types of transport, currently rely on the unique ability of hydrocarbons to provide extremely high temperatures, chemical reactions or dense energy storage. Today, many of these cannot be electrified at all, or only at a prohibitively high cost.
“The solutions will also vary by geography. Different countries have different needs depending on local circumstances: their development priorities, types of economy, domestic energy resources, ability to invest and national energy policies.”
As a result, the report noted that the transformation of the energy system will move at different paces and produce different outcomes and different energy mixes in different sectors and countries. It will require trade-offs by energy consumers, companies and governments; it will require willingness to make hard choices, it added.
This is the reality of the change needed across the world to meet the aims of Paris. It is a transition that will span decades. For companies, it will create both risks and opportunities.”
Shell is an active player and has embraced the transformation of the energy system. It sees commercial opportunity in participating in the global drive to provide more and cleaner energy solutions.
Shell’s Chief Executive Officer, Ben Van Beurden, said the company has set three strategic ambitions, which provide a strong foundation for managing the risks and opportunities linked to the transition to a lower carbon energy system.
“Our first ambition is to provide a world-class investment case, which means being the number one company in our sector in terms of total shareholder return. This will give us the financial capacity to invest in areas where we see growth, and to withstand volatility in oil and gas prices, as well as in downstream manufacturing and marketing margins.
“The second is to thrive through the transition to lower carbon energy by meeting society’s need for more and cleaner energy. This means providing the mix of products our customers need as the energy system evolves. It means investing in assets that will remain financially resilient in the energy system of the future.
“The third is to sustain Shell’s societal licence to operate, to make a real contribution to people’s lives. This means being a responsible energy company that operates with care for people and the environment.”
Our strategy is underpinned by Shell’s outlook for the energy sector and the need to adapt to substantial changes in the world, he added.
