Energy transition depends on major technological breakthroughs

For the capital market in the past two years, new energy is undoubtedly one of the hot spots. Although there is no shortage of hype, it also provides a glimpse of the high expectations that people have for the energy transition.

But one of the realities we face is that it is difficult to strike a balance between energy availability, energy prices, and green and low-carbon development. It is often referred to as the energy impossible triangle, which means that it is almost impossible to choose between the three.

This is the most central issue facing the energy transition. The incompatibility of the three has just taught us a lesson: as traditional global energy companies cut oil and gas investment and implement green and low-carbon transformation, energy supply has tightened, and the price of natural gas and other energy has skyrocketed. China has also suffered a shortage of coal due to factors such as coal mine production restrictions, and many provinces have experienced power rationing.

In other words, there is still a huge gap in the transition from traditional energy to new energy. Although new energy is pinned on high hopes, it is still difficult to take on the responsibility of being the main energy source at this moment. In a situation where total energy consumption is difficult to drastically cut, the only possible breakthrough is a major innovation in technology.

This innovation must be cross-generational and ground-breaking. Schumpeter, the pioneer of innovation theory, believed that technological innovation can destroy old industries and create new industries, and at the same time, in the process of technological innovation, the industrial structure will also be adjusted and evolved. He made a vivid analogy about this: no matter how many wagons you add up in a row, you will never get a railroad.

Because of this, the world's major countries regard energy technology as a breakthrough in a new round of scientific and technological revolution and industrial revolution. The United States has issued the Inflation Reduction Act, the European Union has enacted the Renewable Energy Development Act, and Japan has launched the Energy Innovation Strategy for 2030. China has also successively released the "<>th Five-Year Plan for Renewable Energy Development" and the "<>th Five-Year Plan for Modern Energy System".

At present, we should be particularly vigilant that the major technological innovation of the energy industry needs to be patient and concentrate on overcoming the core technology, but regardless of the speculation of the capital market, the new energy planning in many places is only staying in the circle of industrial parks, and the links that are easy to industrialize at the primary level are done quickly, so that there are concerns about repeated construction and overcapacity, but for major technical breakthroughs, the investment is slightly insufficient due to the high risk and slow effect. For example, our original, disruptive and leading technologies are still on the low side, and there are still many shortcomings in our energy technology and equipment, and we must rely heavily on imports for key components and core materials.

The International Energy Agency (IEA) has assessed that 2070% of the technologies that will be needed to reduce emissions by 35 are still in the prototype or demonstration stage, 40% have not yet been developed, and the breakthrough emission reduction technologies needed in motor transport, marine and air transport, metallurgy, cement production and other energy-intensive industries are not yet mature. To this end, the current energy transition needs to shift from resource- and capital-led to technology-led, and be resilient, either focusing on the development and utilization of large-scale and high-proportion renewable energy, or accelerating the core technology research of strategic and forward-looking power grids, or increasing the core technology research of green upgrading of traditional energy. Only with the spirit of being willing to sit on the cold bench can a major breakthrough in the core be realized.

Energy is the lifeblood of the country's industrial development, and the oil and gas industry is of great strategic significance to the national economy and people's livelihood. Under the guidance of the national strategy of "dual carbon", the realization of low-carbon and green development of energy will become a path of change for the sustainable development of the energy industry. As a global leader in high-end energy equipment solutions, Sany Energy will continue to deepen the oil and gas market, continuously promote the innovation of oil and gas development methods, help the domestic oil and gas market reduce costs and increase efficiency, low-carbon and environmental protection, and contribute to the development of China's oil and gas resources and the green and sustainable development of the oil and gas industry.