The rise of renewable energy has complicated many of the long-standing dynamics in the relationship between trade and energy as against the traditional fossil fuel-based economy, where there were haves and have nots.

And, therefore, both the suppliers of fossil fuels and the consumers have had a tacit interest in ensuring the free, uninterrupted flow of energy, according to a climate change expert.

These equations are set to change with renewable energy, electric vehicles, metals and rare earths getting to play a bigger role in geopolitics, David Livingston, Deputy Director, Climate and Advanced Energy Global Energy Center, Atlantic Council, said. He felt renewable energy offers a more democratised energy paradigm, one in which conceivably any country can deploy the infrastructure necessary to convert free and abundant resources into productive energy.

While the role of renewables in the national energy mix rises, various countries may have to relook at incentives with respect to trade, protectionism, and industrial policy in the energy sector. Recent tariffs on imported solar panels put in place by India and the US look like a harbinger of things to come as more countries seek to create conditions conducive to indigenising the production of renewable energy technologies.

Speaking at an interactive session here with industrialists, he said Indian power sector is undergoing a significant change that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in the country. The Government’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country.

Livingston said, “Geopolitics will be driven by electrified systems. If the oil economy dominated global politics last century, in the coming days, electrified economy and systems will rule.”

Speaking on the Changing Geopolitics of Energy, he said, “we have transitioned from a situation where there was constant energy crisis to energy abundance.” Referring to the electrification of transport and the growing focus on electric mobility, he said, “In 2015 when a Bloomberg report had predicted that the electric vehicles will gain parity with internal combustion engines by 2022, it was laughed off. I believe EVs are set to come of age soon and we may see parity by 2023-2024 when auto makers may have small profits.”

“India has the potential to become the leader in the EV two-wheeler segment. While China continues to dominate with State mandates, it won’t be long before others join,” he explained.

The other important shift could be the dropping demand for certain metals and rare-earths that would be required for new generation industries, including batteries for electric mobility. This means, there will be more demand for lithium, cobalt and other rareearths and only a few countries have large resources. That is likely to pave way for geopolitics to control assets. For instance Congo has huge cobalt resources.

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