Key Drivers in the Energy Transition: Electrification and Other Clean Energy Solutions

The energy transition presents complex challenges that demand a comprehensive approach to develop and implement sustainable, reliable, and affordable solutions to reduce carbon emissions.

Understanding the latest technologies, regulatory framework, and an evolving investment landscape is crucial for driving the energy transition. To illustrate the scale of investment required, annual global investment in the energy transition reached $2.1 trillion in 2024 (1). This significant investment highlights the massive scale, challenges, and opportunities that the energy transition presents for companies across the energy production and process industries.

Companies will need to navigate this transition systematically while considering company objectives and project-specific factors such as geography, existing processes, and facility lifecycles. Implementing decarbonization solutions using the approaches listed in Figure 1 may require significant investment, time, and effort to retrofit existing equipment or plants, construct new facilities, ensure compliance with grid requirements, train personnel, and adhere to local regulations (2). Managing these complexities requires adopting a phased approach, which is widely used in executing engineering design projects.

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▲Figure 1. These technological solutions — many of which will be critical to the energy transition — are grouped into three categories: efficiency increase, fuel shift/hybridization, and deep decarbonization. Source: Adapted from (2).

To align technical and financial objectives and manage overall risk, the project design and construction process is split up into multiple phases. Key criteria should be established and met in each phase prior to advancing to the next phase. In early phases such as concept selection, design changes are typically easier to implement, have a higher impact, and incur lower costs than changes made in later phases (3). By adopting a phased approach, businesses can execute their capital expenditure (CAPEX) projects and manage associated risks more effectively.

This article provides information on the key constraints and dependencies for three decarbonization pathways involving electrification, green hydrogen, and green ammonia. The article describes each decarbonization pathway using real-world case studies and discusses potential or proven solutions to resolve associated...