From an environmental viewpoint, the COVID-19 pandemic has not only been negative.
"In 2019, it was difficult to talk about the changes in behaviour we saw were necessary to reach the global climate goals. Such allegations were viewed as moralizing. Then COVID-19 came along, and we changed our behaviour in several areas – very quickly. Now the question is which behavioural changes have come to stay. For example, even when the situation allows us to travel again, we will not return to where we were," says Sverre Alvik.
He is the head of energy transition research in DNV. This company publishes an annual report on the energy needs of the future, Energy Transition Outlook (ETO), and the 2020 edition points to the pandemic as the reason for us reducing our energy consumption by 8 per cent last year. People are staying at home and not travelling to work or on holiday and this has a huge effect on the world's oil consumption.
"The pandemic has ensured that we reached the oil peak several years earlier than we thought. Consumption in 2021 will increase compared to last year's level, but will probably never return to the 2019 level."
"Doing less of most things, but it's not enough"
Alvik points out that we have reached not only the oil peak but also the emissions peak. "The fact that the world's carbon emissions actually fell by 8 per cent last year is even more important than reaching the oil peak. People are doing less of most things; we're travelling less, buying less and consuming less. In order for us to reach the goals stated in the Paris Agreement, however, the level has to continue falling over the next few years and not start to rise again," he says.
Alvik calls the ETO report a "reality check" that can help the parties in the energy sector to understand how quickly the transition is taking place and see the consequences of the choices made.
"We're not providing a blueprint of what has to happen, since the right strategy for one player may be entirely wrong for another. Our role is to say something about where we are and where we are going, and to create a common understanding of this."
The head of research into the energy transition in DNV, Sverre Alvik, believes we still have a long way to go to reach the Paris Agreement goals.
Setting the standard for a better world
"Our core activity is risk management. Our neutral, independent role - since we work across the industries in the energy sector - means we can help companies to see the overall energy system in order to make good decisions that ensure future value creation," says Anne Louise Koefoed, an energy transition researcher at DNV.
Anne Louise Koefoed, an energy transition researcher at DNV.
She sees there is currently a great need for good decision bases and believes this is because of the extensive transition process that Norway and the rest of the world are undergoing. This is taking place both more quickly and more slowly than we would like.
"Both the energy sector and the authorities trust our analyses. Not only because we're independent but also because we have a lot of professional disciplines with deep sector expertise that create complete assessments. These can cover the technology, cost picture, political considerations, need for sustainable solutions, employee welfare and the opportunities afforded by the green shift. DNV can have an overall perspective while still taking the sectors' various needs into account," says Koefoed.
She thinks DNV is known for its belief that good standards and common rules can create a better world.
"Our goal is to 'Safeguard life, property and the environment'. Within the company, there's a lot of interest in the environment and sustainability, and great confidence that technological solutions exist. These have to be implemented, and that requires organization and political tools," says Koefoed.
Both Norway and the rest of the world are investing heavily in offshore wind power.
On the road towards a sustainable future
However Alvik also admits that the future does not look entirely bleak.
"There's still a chance we will reach the Paris Agreement goals. The technology and knowledge exist, but we lack sufficient political support to ensure they will be further developed and applied," he says.
The ETO report estimates that, by 2050, the world's electricity production will be more than doubled, and 60 per cent of it will come from solar and wind power. Norway mainly generates electricity for its own consumption, but DNV sees many opportunities for the country in the green shift.
"If the world requires more electricity, more electricity has to be generated. Norway has a lot of natural resources and is lucky in that way. We have opportunities to produce offshore wind power. The world also needs hydrogen, and we can produce that from both gas and electricity," says Alvik.
"Recently we issued an ETO report focusing on Norway and the value-creation opportunities that exist and can at the same time help us to reach the climate goals. The report especially focused on three areas: green shipping, offshore wind power and gas decarbonization.
Yakamura Dam, one of the world's first floating solar farms. Photo: DREAMNIKON
More questions than answers
In reality, we must therefore live off anything other than what we have lived off so far - oil.
"We've seen decades of growth in the demand for oil. How will the players and market react when this demand flattens out and drops? The oil industry has to compete in a downward market. This creates a high risk of over-investment and unstable prices," says Alvik.
However, although the oil peak has been reached, the oil industry is still very important to Norway.
"The oil industry will be with us for many decades to come, but we are in a transition that everyone must be part of. DNV has an important role to play as we move our energy consumption away from oil and gas and over to hydrogen, wind and solar power. We must use our knowledge to work specifically to create standards for how the industry can meet the future. How can we improve shipping, for example? How are we to build turbines for offshore wind power? How are we to manoeuvre the market, what opportunities and risks exist? We must create knowledge, analyses and standards that allow the industry to make good decisions and initiate specific projects that will contribute to the green shift," says Alvik.
He hopes the forecasts in the ETO report can be used for such measures, and that we can close the gap between the existing situation and the future that we want.
Download the Energy Transition Outlook 2020 here