“Risk on steroids” : The Political Economy of Power-to-X
Hunt, Oliver and Tilsted, Joachim Peter LU
(2024)
ICTA-UAB 2024 Growth vs Climate Conference
- Abstract
- The global energy transition requires alternatives to fossil fuels in the energy-intensive industries and transport sectors, which are particularly reliant on the unique material properties of fossil fuels as fuel and as feedstock. The build-up of non-fossil infrastructure therefore demands large-scale investments in power-to-x. In the context of European climate governance, a political consensus has emerged to support the establishment of power-to-x production networks to lower emissions and create synthetic fuels and feedstock to substitute hydrocarbons. Yet, despite a seemingly strong momentum, investment decisions are lacking behind global scenarios. Through interviews with key actors, participant observation, and document analysis, we... (More)
- The global energy transition requires alternatives to fossil fuels in the energy-intensive industries and transport sectors, which are particularly reliant on the unique material properties of fossil fuels as fuel and as feedstock. The build-up of non-fossil infrastructure therefore demands large-scale investments in power-to-x. In the context of European climate governance, a political consensus has emerged to support the establishment of power-to-x production networks to lower emissions and create synthetic fuels and feedstock to substitute hydrocarbons. Yet, despite a seemingly strong momentum, investment decisions are lacking behind global scenarios. Through interviews with key actors, participant observation, and document analysis, we explore the political economy of investments in power-to-x production capacity, focusing on the challenges associated with financing such investments. We argue that uncertainties around profitability threaten to undermine investments. It makes investors await public derisking, and fossil fuel incumbents maintain favorable financing conditions vis-à-vis renewable energy developers. These findings suggest limits to derisking and highlight the relevance of compelling fossil fuel incumbents to scale up power-to-x. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/1cd157cc-25c9-4933-980c-f50bbc72bf94
- author
- Hunt, Oliver
and Tilsted, Joachim Peter
LU
- organization
- publishing date
- 2024-03
- type
- Contribution to conference
- publication status
- published
- subject
- conference name
- ICTA-UAB 2024 Growth vs Climate Conference
- conference location
- Barcelona, Spain
- conference dates
- 2024-03-13 - 2024-03-15
- language
- English
- LU publication?
- yes
- id
- 1cd157cc-25c9-4933-980c-f50bbc72bf94
- date added to LUP
- 2024-03-25 16:35:57
- date last changed
- 2024-03-27 10:01:21
@misc{1cd157cc-25c9-4933-980c-f50bbc72bf94,
abstract = {{The global energy transition requires alternatives to fossil fuels in the energy-intensive industries and transport sectors, which are particularly reliant on the unique material properties of fossil fuels as fuel and as feedstock. The build-up of non-fossil infrastructure therefore demands large-scale investments in power-to-x. In the context of European climate governance, a political consensus has emerged to support the establishment of power-to-x production networks to lower emissions and create synthetic fuels and feedstock to substitute hydrocarbons. Yet, despite a seemingly strong momentum, investment decisions are lacking behind global scenarios. Through interviews with key actors, participant observation, and document analysis, we explore the political economy of investments in power-to-x production capacity, focusing on the challenges associated with financing such investments. We argue that uncertainties around profitability threaten to undermine investments. It makes investors await public derisking, and fossil fuel incumbents maintain favorable financing conditions vis-à-vis renewable energy developers. These findings suggest limits to derisking and highlight the relevance of compelling fossil fuel incumbents to scale up power-to-x.}},
author = {{Hunt, Oliver and Tilsted, Joachim Peter}},
language = {{eng}},
title = {{“Risk on steroids” : The Political Economy of Power-to-X}},
year = {{2024}},
}