Government incentives could help make new energy-transition technologies like carbon capture and green hydrogen more commercially viable, financial industry executives said on Thursday.
Allan Baker, global head of power for Societe Generale, cited how the wind and solar power industries first took off with the help of public policies, speaking on a panel at the Reuters Events: Global Energy Transition conference.
In order to get to net zero emissions, “It is very much the subsidies or support you need to close the cost gap between, say, green hydrogen now and the fossil fuel that’s being used” currently to make products like steel or cement, Baker said on the panel, which was webcast.
Pooja Goyal, head of renewable and sustainable energy for Carlyle Group, said public-private partnerships could be useful to create more infrastructure for electric grids and to improve their resilience. Such partnerships could also foster the development of expensive green hydrogen projects, she said.
“The economics around green hydrogen might not be competitive right now. So there is a bridge that is needed from a policy perspective in order to attract private capital,” Goyal said.
So-called “green hydrogen,” made by using renewable energy to power electrolysers to convert water, is being backed by many governments for vehicles and energy plants but it is currently too expensive for widespread use.
Panel moderator Scott Greer, a partner at law firm King & Spalding, cited estimates that total spending needed to limit global warming to acceptable levels by 2050 could reach $115 trillion, or roughly equal to all U.S tax revenue during that timespan.
Financial executives were also aligned with power company CEOs who argued at this week’s global energy conference that natural gas will have a long-lasting role in the transition to a climate-friendly global economy.
Mark Florian, managing director for BlackRock Inc, said reducing emissions will require investments in a wide range of technologies, including battery storage and gas-fired power plants to supply power at during periods of peak demand.
“We need a village, essentially, a variety of (power) sources to fill the gaps,” he said.
Mark Lacey, head of global resource equities for Schroders , also said gas-fired plants will remain needed in some emerging market countries where it would not be realistic to move entirely to renewables soon.
“I don’t think you just can basically put hard deadlines in with every single country,” Lacey said. For more on the Reuters Events: Global Energy Transition conference please click here https://reutersevents.com/events/energy-transition-global (Reporting by Ross Kerber Editing by Marguerita Choy)