18 April 2023
Sustainability in the energy sector
Maria Margarita Navarro, Global Banker Energy & TMT at BBVA
Energy consumption has become highly relevant on a global scale at a time when this activity is trying to become sustainable in the medium and long term. This is no small goal considering that, according to recent World Bank figures, energy consumption accounts for more than 75% of greenhouse gas emissions.
As a result, and as is well known, the Paris Agreement has set an energy transition goal whereby more than 70 countries have committed to achieving zero net carbon emissions by 2050. This is how governments, organizations and public and private companies have been focusing their efforts to gradually reduce the dependence on fossil fuel energy generation to migrate toward other sources with lower impact on emissions such as natural gas and encourage the use of renewable sources such as hydro, solar and wind energy.
This effort has become even more evident and necessary as a result of the energy crisis triggered mainly by the Covid-19 pandemic and Russia's invasion of Ukraine, which have generated significant increases in the price of oil and gas (reaching 14-year highs in March 2022), triggering alarm bells about energy security on a global scale and boosting the need to support even more the alternatives for renewable energy sources.
Renewable energy sources have an essential transcendence on economic welfare, job creation and favorable impact on cities and communities.
In its 2022 report, the International Energy Agency (IEA) notes that, for the 2022-2027, the growth in renewables is expected to reach 2,400 GW, which is equivalent to China's current installed capacity. This represents an 85% acceleration over the last five years and a 30% increase over the projection made in last year's report, making it the Agency's highest revision to date. For Latin America and Colombia, according to the same report, growth in renewables is projected at 45% and 44%.
In line with this global trend, 70 new renewable energy projects are expected to enter Colombia between 2023 and 2024 with an estimated investment of 2.5 billion dollars and, with these, the potential to develop the green hydrogen market, which is projected to be an important substitute for fossil fuels.
At this point it must be taken into account that renewable energy sources are not only relevant for their environmental impact and their positive impact on climate change, but also have an essential transcendence on economic welfare, job creation and favorable impact on cities and communities.
This is how the Bogotá Energy Group “GEB” focuses its corporate strategy on "improving lives with sustainable and competitive energy, seeking to make out of energy an enabler of development, prosperity, and well-being in the territories of operation". In particular, it is generating concrete impact actions on different fronts:
- Ensure access to clean and safe energy through solar classrooms for more than 3500 teachers and students in the ‘Energy for learning’ program.
- Commitment to consult with more than 224 ethnic communities for a harmonious development of the works for the transmission line that would connect seven wind farms to the National Interconnected System (Collector Project).
- Guarantee local labor and services from local communities in infrastructure projects.
- Energy for Peace' program, which has cleared 190 km of landmines.
- Greenhouse gas reduction target in all its geographies of operation by 2030: 51% Colombia, 30% Peru, 43% Brazil and 11% Guatemala.
Sustainability, as illustrated in the GEB Group's strategy, does not only refer to the goal of reducing CO2 emissions. While the impact on climate change is one of its main axes, key elements such as economic and social well-being and the generation of internal and external opportunities are incorporated in order to prioritize the continuity of organizations and the generation of value in the long term.
Last but not least, it is worth noting that, in line with this trend, BBVA has for years made the financing of sustainable businesses and projects one of its strategic priorities and has mobilized resources on this front for EUR $50 billion in 2022 (+41% compared to 2021). This strategy has led BBVA to be recognized as the most sustainable bank in Europe for the third consecutive year according to the Dow Jones Sustainability Index.