Renewables as key factor in reducing Europe's dependence on fossil fuels

To achieve the set goals, it is necessary to boost investments in renewables

Despite the great political support for investments in green energy in the direction of greater energy dependence and reduction of CO2 emissions, investments in this sector are still smaller compared to investments in fossil fuels. The energy crisis that swept the world positively influenced the development of projects based on renewables and energy infrastructure for them.

There is progress, especially in the segment of renewable energy storage, where investments are made in the implementation of appropriate infrastructure and in the development and improvement of technology.

It seems that despite the serious shake-up of the renewable energy sector, the full energy transition will proceed at a slower pace. Big energy companies’ profits from fossil fuels still remain an attractive sector that offers historically high earnings and political power.

It is becoming increasingly evident that political and institutional support for the energy transition will have to rise to a new level that will offer greater efficiency and strengthen international support.

There is no doubt that creating solid foundations of political and financial independence and greater connectivity is key to fully restructuring and increasing renewable energy capacity. The fact remains that investors are looking for safe and potential sectors to fertilize their invested capital.

As a result of the energy crisis, high energy prices and fossil fuel subsidies offered by governments as support created excellent conditions for good returns on invested money.

Compared to the renewable energy sector and investing in projects of this type, there is no doubt that despite the great interest and trend in the markets, last year, investing in fossil fuels was a safer choice for making money. The historical earnings of fossil fuel energy companies are proof of that.

As a result, energy companies are putting most of their investments into developing fossil fuel projects, although this looks set to change in the very short term.

In order to achieve the goals of reducing global warming and accelerating the energy transition, IRENA’s analysis estimates that 0.7 trillion dollars should be diverted annually from the fossil fuel sector to the renewable energy sector. The record level of investments achieved last year, however, is not enough to achieve the desired pace and achieve the set goals.

The huge unused natural potential for the implementation of projects in renewable sources of the parish, and the benefits for society both in economic and development terms are just an additional argument for the importance of increasing investments.

Analyses of the global market show that, despite certain weaknesses, investments in renewable sources will continue until 2024, 33% of world production will come from this sector.  

The costs of materials for the construction of renewable energy facilities will decrease, and a decrease in other macroeconomic risks is also expected, which will create additional positive conditions for increasing investments in the sector in the next period.