Managing uncertainty and accelerating the path to a decarbonized world

  • Miguel Stilwell
  • 5 March 2024

It is critical to accelerate investment and modernization of electrical infrastructure to accompany the renewables growth strategy, create stable and predictable regulatory contexts.

In a context that remains unstable and unpredictable in various dimensions — macroeconomic, social, geopolitical, or climatic — it is critical to stay consistent in the course we have set.

Whether it’s companies, governments, associations, or civil society, 2024 will once again be a year in which we all must be persistent in the path of energy transition. A vital path for addressing the challenges of energy security and accessibility to clean energy and for effectively combating climate change.

In the last two years, we have faced a global energy crisis and have been confronted with a challenging macroeconomic scenario — variables that will continue to strongly influence the context this year. The global geopolitical scenario has brought conflicts and humanitarian crises that remain unresolved, in addition to important political framework clarifications in several countries where we operate expected in the coming months. Social divides and the devastating effects of climate change are increasingly a reality that affects us all daily.

All these points have a decisive impact on the energy sector, particularly renewables, essential to ensure a decarbonized world. Portugal is, in fact, a prime example in this regard. In January, 81% of the electricity consumed in the country was supplied by clean energy, after closing 2023 with a new record of renewable energy production — already representing more than 70% of total generation and the highest value since 2016.

Around the world, we are witnessing an increase in ambitions to meet climate targets. A serious commitment from all is needed to keep the goal of limiting global warming to 1.5°C alive. Hence, the agreement reached at COP28 at the end of last year to triple renewable capacity and double energy efficiency by 2030 was crucial. Now more than ever, the issue is not the direction we take, but the speed at which we are able to travel it.

The transformation that has been globally led has made EDP a paradigmatic case. Pioneers in investing in renewables, in two decades the energy we produce from clean sources has increased from 20% to over 85%. This year, we expect to reach the milestone of 90%. And we have done so guided by the principle of a fair transition, working together with governments and local authorities in regions affected by the decommissioning of coal plants, such as Sines, to transform them into true “green energy hubs” involving renewables, hydrogen, storage, and flexibility.

We now have a global presence from four regions (Europe, North America, South America, and Asia Pacific). And our objectives are clear: to eliminate coal from our portfolio, maintain gas as a backup in the medium term, and continue to strongly invest in renewables, networks, and energy efficiency, alongside our customers and communities. We have been leading many of the changes in the world and in the sector, basing our strategy on technological innovation and the talent of our people. EDP is prepared, but no one can act alone in the face of the challenge of changing the entire energy matrix developed over the last century and replacing fossil fuels with clean energy.

It is critical to accelerate investment and modernization of the electrical infrastructure to match the renewable growth strategy, to establish stable and predictable regulatory frameworks that promote investment, and to simplify licensing procedures to combat delays that continue to jeopardize project viability. And equally important, this path, which will undoubtedly continue to be a bumpy journey, must be traveled constructively, particularly regarding dialogue with communities.

The country and the world need investment, innovation, and collaboration. In the unstable and unpredictable context we live in, it is easy to forget priorities or to be more defensive. However, I believe that 2024 is a year to persist in strategy and accelerate the pace of the journey like never before.

  • Miguel Stilwell