IEA: Global clean energy transition now ‘unstoppable’
Global annual investment in clean energy will be 40% higher in 2023 than it was in 2020, the International Energy Agency (IEA) has confirmed as it celebrates “unstoppable” momentum for the energy transition.
The Agency has today (24 October) released its annual World Energy Outlook, documenting progress over the last three years and also forecasting the likely future shape of the global energy transition through to 2030 based on existing policy pledges.
There is much to celebrate. The Outlook highlights several “striking examples of an accelerating pace of change”, such as the fact that one in five cars sold this year are electric, up from one in 25 in 2020.
Another example is that more than $1bn a day is now spent on solar development. The IEA estimates that more than 500GW of renewable capacity will be installed globally this year, with solar leading the way. Global investment in all clean energy technologies in 2023 is on track to be 40% higher than in 2020.
“The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us,” said the IEA’s executive director Fatih Birol.
All scenarios assessed by the IEA now result in a peak demand for coal, oil and gas before the end of 2030.
In terms of timing, the Outlook concludes that current global energy commitments from policymakers are aligned with a temperature trajectory of 2.4C above pre-industrial levels by 2100. This is not aligned with either of the Paris Agreement’s trajectories, 1.5C and ‘well-below’ 2C.
The Outlook also comes with several warnings about the delivery of existing commitments. Supply chain disruptions in sectors including wind, plus the grapple for energy security in the face of the Russia-Ukraine war and global economic downturn, are prompting many countries to seek to bolster fossil fuels.
Birol emphasised: “Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever.”
The Outlook concludes that, unless additional policy interventions are made, the share of fossil fuels in the global energy supply will be 73% in 2030, down from around 80% at present.
In contrast, the IEA’s 2050 net-zero scenario aligned with a 1.5C temperature trajectory includes the share dropping to around 60% by the end of this decade.
Blueprint for policymakers
The World Energy Outlook provides policymakers with five key priorities for getting the global energy transition aligned with net-zero by 2050 on a net-zero trajectory. These are intended to serve as guidance for negotiations at COP28, which begins in Dubai on 30 November.
The first is trebling global renewable energy capacity. G20 leaders have already committed to rallying behind this recommendation. This will need to be coupled with system-wide change to expand and modernise electricity grids and add energy storage, the IEA emphasises.
Linked to this is a need for large-scale financing mechanisms to triple clean energy investments in emerging and developing economies. These nations continued in 2023 to attract only a small minority of global clean energy financing.
Birol said: “The speed at which emissions decline will hinge in large part on our ability to finance sustainable solutions to meet rising energy demand from the world’s fast growing economies. This all points to the vital importance of redoubling collaboration and cooperation, not retreating from them.”
Next up is doubling the global annual rate of energy efficiency improvements. Global energy intensity decreased by 2.2% last year, twice the average of the previous five years, largely due to policy responses to the energy price crisis. The IEA says the big challenge now will be to sell energy efficiency as an opportunity and a permanent change, rather than a temporary burden.
The next recommendation is slashing methane emissions from fossil fuel operations by 75% by 2030. This is far beyond the Global Methane Pledge backed by 149 nations, which targets a 30% cut against a 2020 baseline.
Energy is the world’s largest source of methane emissions with agriculture close behind. The IEA has previously stated that there is “just no excuse” for oil and gas firms not to invest in cutting methane, given the strong business case for doing so.
Last but not least is a call for world leaders to properly prepare for an orderly decline in the use of fossil fuels. A key step this decade will be ending approvals for new unabated coal-fired power plants, plus any new coal mines or mine extensions to serve them. These measures were detailed in the updated net-zero scenario earlier this year.
Energy and Clean Air analysis released earlier this year confirmed that China added more new coal power plants in 2022 than it had since 2015, at a rate of two new plants a week. It also quadrupled the amount of new coal power plants approved in 2022 on 2021 levels.
The IEA estimates that global coal use increased slightly in 2022 to record highs, with increases in China, India and Indonesia offsetting falling use in markets including the US. A new record may well be set in 2023 with “small declines” in power generation expected but larger increases in heavy industry.
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.