Ahead of COP28 this month, global energy leaders and investors have highlighted a lack of government support as a key obstacle to reaching net zero goals.
In its 2024 Energy Transition Outlook, International law firm Womble Bond Dickinson reports the views of boardroom executives from energy and utilities firms as well as investors in the sector from the UK and Europe, North America, Asia Pacific, the Middle East and Latin America.
Respondents to the survey pin-pointed the insufficient support of governments as the main hurdle in the journey to net zero.
Although political and public support for clean energy remains strong, the survey revealed much more is required – both in Europe and globally – in terms of capital mobilisation, legislation, and regulation.
Asked to select all areas in which government guidance or incentives could be most effective in accelerating the energy transition, 40% of respondents chose funding of grid upgrades and efficiency improvements, 33% cited policies to incentivise energy storage and 32% said such support would be most effective in energy efficiency measures.
Amid rising interest rates and equipment prices, 56% of respondents said cost and economic impact was a leading challenge impacting the transition to clean energy.
Cost concerns were slightly more pronounced in the developing economies of Latin America, selected by 60% of respondents, compared to 57% in Europe who cited those challenges.
Richard Cockburn, Head of Womble Bond Dickinson’s UK Energy and Natural Resources Group, said: “As world leaders prepare to gather for COP28, decision makers in energy companies across the globe are calling for more support, better legislation and firmer commitments to net zero targets.
“Our report reveals that more than half (56%) of respondents are deepening their focus on energy transition strategies, and many show significant optimism around low or no carbon resources and technologies, such as carbon capture and green hydrogen.
“Yet, they are also clear-eyed about the need for more political support as well as the greater-than-anticipated level of capital investment to realise energy transition ambitions.”
Infrastructure needs and grid flexibility requirements also ranked among the top challenges impacting the energy transition, as selected by 54% and 52% of respondents, respectively.
Respondents said key concerns in grid modernisation include interconnection challenges, mitigation of grid instability resulting from renewable energy integration, and aging infrastructure.