Birol set to issue wakeup call at World Energy Outlook launch

The formal launch of World Energy Outlook 2016 takes place in London on Wednesday, followed by a press conference hosted by Dr Fatih Birol, executive director of the International Energy Agency.

WEO 2016 examines how a post-Paris world redefines the idea of energy security, particularly in the power sector, the frontline in the fight against climate change. The report explores how oil, natural gas and coal are adjusting to today's market conditions and assesses the risks that lie ahead, from under-investment in essential supply to stranded assets.
Fatih Birol
Some indication of the likely conclusions of the report can be gauged by utterances made by Birol at the recent Energy for Tomorrow event held in Paris.

Asked if he was more or less optimistic in the world’s chances of meeting the targets set by the Paris agreement, Birol sounded a pessimistic note.

Referring to the enthusiasm about strides being made in the automotive sector, he said,
“To talk about climate and not about energy realities is a mistake- two thirds of the emissions come from the energy sector. Without making a major change in the global energy system it’s impossible to tackle climate change.”

“The Paris agreement is excellent but as a new energy man I look at the data- specifically the carbon price. Before the Paris agreement the price of carbon was $9- after the agreement it went from $9 to $6, so Paris is not as strong as we think.”

“From an energy perspective two good things are happening – renewables are growing very strongly, having taken over from coal as number one in installed capacity worldwide. Then secondly how we use energy in transport.”

Birol levelled with the audience at the New York Times energy summit event when he said he didn’t believe the agreement’s objectives will be met.

“Are we in line for the goals of the agreement – I say no. There is some good news but we are not on track.”

“France and Scandinavia for example have done well but the demand is coming from Asia. Today in southeast Asia the biggest chunk of investment is going into coal plants and low-efficiency subcritical plants.”

“It is then the same effect for everybody. We must look for a global perspective or the political momentum will not translate into major transformation.”

Asked if it was possible to reach the target without countries such as coal-rich India, Birol mentioned that country’s circumstance in terms of it being a developed country with a massive amount of energy poverty.

“Globally coal is flat and half of coal is consumed in china, where it is in decline, as it is in OECD countries. That’s not the case in India and Southeast Asia but the climate change issue is the issue of yesterday as well.”

“In the last 100 years rich countries and China have improved their economies and put a lot of carbon in the atmosphere. India and poorer countries are saying don’t ask me to sacrifice. I see a fairness here- today in India 250 million people have no electricity- that’s half of the EU’s population.”
The bottom line according to Birol – ultimate failure to meet the target, bar drastic measures.

“Even if we all meet our INDCs that will bring us to 2.7 degree Celsius- the difference between 1.5 and 2.7 degrees is not just taking your jacket off. There is a need to take the commitment seriously, not least because of the implications in terms of water shortages.”

On the eve of the launch, another study, Implications of the Paris Agreement for Coal Use in the Power Sector, was released by the Climate Analytics group which recommends rich countries must stop burning coal for electricity by 2030, China by 2040 and the rest of the world by mid-century in order to meet commitments made in Paris in the most cost effective manner.



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