VIENNA, August 21, 2024 (WAM) — OPEC Secretary General Haitham Al Ghais has stated that the organization does not view energy sources as a zero-sum game. According to Al Ghais, oil and other energy sources are interconnected rather than competing against each other.
In a recent article on OPEC’s website, Al Ghais emphasized that oil plays a crucial role in many sectors beyond its traditional uses. He dismissed the notion that electrification and oil are in direct competition. “There is a myth that electrification and oil operate in separate realms, with only one emerging as the victor. This is simply not true,” he said.
Al Ghais highlighted how petroleum products are integral to the electricity sector. He pointed out that oil-based materials are used in the production of wind turbines, solar panels, and various electrical appliances. He also noted that petroleum products are essential in the manufacturing, maintenance, and installation of electrical infrastructure, including cables, pylons, transformers, and substations.
A notable example he provided was the insulation materials used for underground and subsea cables, which are critical for connecting offshore wind farms to the grid. “Insulation sheaths, which make up about 40% of the weight of underground cables, often use petroleum-derived materials such as cross-linked polyethylene and polyvinyl chloride,” Al Ghais explained.
He also discussed the importance of transformers in electricity transmission. These devices are vital for ensuring correct voltage levels throughout the electricity supply chain.
Al Ghais stressed the need to consider the volume of materials required to meet electrification targets, given its role in global net zero plans. Currently, the world generates between 27,000 and 30,000 Terawatt hours (TWh) of electricity. According to a report by the Energy Transitions Commission titled ‘Making Clean Electrification Possible: 30 Years to Electrify the Global Economy’, this amount needs to increase to between 90,000 and 130,000 TWh by 2050, representing a 3.5 to 5-fold increase in less than 30 years.
He concluded that OPEC member countries have national electrification plans, reflecting a belief that all energy sources will be needed to meet future demand, reduce emissions, and ensure energy security. “Oil will remain a vital part of future energy pathways, as it is essential for the operation of other sectors, including electricity,” Al Ghais said.