Energy Transformation refers to the process of shifting the fossil fuel-centered energy system to low-carbon energy sources. Discussion of energy transformation began in earnest after the adoption of the Paris Agreement at the 21st Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change in 2015. That year, 196 countries agreed under the Paris Agreement to limit the global average temperature rise to within 1.5°C above pre-industrial levels. Since then, governments and companies have been under pressure to fundamentally change the way energy is produced and consumed.
According to the International Renewable Energy Agency (IRENA), global renewable energy generation capacity stood at 3,382 GW as of 2023, nearly tripling compared to ten years earlier. This ongoing energy transformation is spreading beyond the power generation sector into industry, transport, and buildings. Representative examples include the spread of electric vehicles, hydrogen-based steel production, and building energy efficiency. The global energy transformation market was valued at USD 3.08 trillion as of 2024 and is projected to reach USD 5.56 trillion by 2030, growing at an annual average rate of 10.3%.
[Energy Transformation © ESG.ONL/ESG Today]
South Korea is no exception. The government has set a Nationally Determined Contribution (NDC) of reducing greenhouse gases by 40% compared to 2018 levels by 2030 and is pursuing a plan to raise the renewable energy share to 21.6% by 2030. The expansion of solar and wind power facilities is being carried out alongside the early closure of aging coal-fired power plants. At the corporate level, RE100 has become a key implementation tool for energy transformation, and as of 2024, approximately 40 major domestic companies including Samsung Electronics, SK Hynix, and LG Energy Solution have joined RE100. As carbon regulations tighten across global supply chains, RE100 implementation is effectively becoming a mandatory condition for export companies.
Energy transformation is simultaneously a climate goal and a matter of industrial restructuring. Without parallel investment in Energy Storage Systems (ESS) to complement the unstable supply and demand conditions of renewable energy, power grid modernization, and hydrogen infrastructure, the pace of transformation will struggle to keep up with the targets. While we have reached consensus on the direction of the transformation, how the speed and costs are to be shared among different actors remains a challenge to be resolved.
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