IEA report predicts gas and renewables set to dominate

Global energy watchdog, the International Energy Agency, released its annual World Energy Outlook report on Wednesday, acknowledging that while the Paris COP21 agreement was an ‘achievement’, it would not be enough to avoid the worst impact of climate change.

IEA executive director told media at the launch of the publication in London that gas-fired power and renewables would be in the ascendancy over the next 25 years as international climate agreements and subsequent Intended Nationally Determined Contributions (INDCs) kicked in.
Fatih Birol of the International Energy Agency
“We see clear winners for the next 25 years – natural gas but especially wind and solar – replacing the champion of the previous 25 years, coal. But there is no single story about the future of global energy: in practice, government policies will determine where we go from here”.

Just as he hinted at the Energy for Tomorrow event in Paris two weeks ago, Birol expressed doubt that objectives formulated at COP21 will be reached unless governments go further.

Meeting the temperature goals will require a "step-change" - enabling the world to achieve net zero emissions by the second half of the 21st century, and will need more action than the pledges already made by countries for cutting greenhouse gases under the agreement.

The IEA warned the pathway to 2C was “very tough”, requiring trillions of pounds of investment in the energy system to shift from fossil fuels towards renewables, nuclear power and carbon capture and storage technology.

The report referred to the challenge of meeting the 1.5C goal as “stark”, requiring net zero emissions between 2040 and 2060, and “employing every known technological, societal and regulatory decarbonisation option” in order to have any prospect of success.

Though international agreements are expected to cut energy-related carbon emissions from an average of 650 million tonnes per year since 2000 to around 150 million tonnes per year in 2040, the agency itself was stark in its assessment.

"While this is a significant achievement, it is far from enough to avoid the worst impact of climate change as it would only limit the rise in average global temperatures to 2.7 (degrees Celsius) by 2100," the IEA’s report asserts.

Acknowledging Paris as a "a major step forward" it went on to recommend that politicians need to speed up the implementation of low carbon technologies and energy efficiency across all sectors.

The advancement of gas and renewables is predicated, according to the report, on policies and commitments by countries to tackle climate change leading to a slow in demand for oil with coal expansion grinding to a halt by 2040, even as energy demand rises 30 per cent.

In greater detail that means, under a scenario giving the world a 50/50 chance of meeting the 2C target, coal use would fall by 2.6 per cent a year, oil demand would drop back to 1990 levels by 2040 and natural gas would plateau by the 2030s.

Consumption of natural gas would increase by 50 per cent by 2040 under such a scenario, while nearly 60 per cent of new power capacity would be renewables such as wind and solar, with the clean technologies becoming the largest source of electricity.

The report is being published as countries meet in Morocco for the latest round of United Nations climate talks, which are focused on implementing the Paris Agreement.

The IEA's assessment found that some £28trn will be needed for energy efficiency improvements alone.

In response to press queries about the prospect of the US pulling out of the agreement, Birol urged caution: “Governments come and go around the world. This is a perfectly normal thing, and energy policies change with changes in administration. We may well see a change in US policy and, given the size of the US economy, these changes may have global implications. If there are such changes, we will include them in our analysis.”

“But for now, it would be premature to speculate on what these policies might be.”

Despite the headline highlights indicating bad news for coal-fired power, the industry itself welcomed the report.

The World Coal Association (WCA) told Power Engineering International the report's findings 'demonstrates coal’s continuing importance to the world’s energy mix.'

The report forecasts that coal will generate more electricity in 2040 than all new renewable technologies (excluding hydro) combined.

Benjamin Sporton, WCA Chief Executive commented: “This report highlights the importance of modern, high efficiency low emissions coal technologies in the decades to come, especially in Asia. HELE coal technologies are proven, commercially available today and result in immediate CO2 emission reductions of up to 30%. As we work to implement the Paris Agreement countries must be supported in implementing their commitments for this essential low emission coal technology."

"This report demonstrates that coal remains an essential part of global energy supply. For countries using coal, it is imperative to do so with the cleanest and most efficient low emission coal technologies available. India and Southeast Asia will be the driving force of demand for coal in the decades to come. For these countries the IEA highlights that excluding coal from the energy mix is not an option– It is essential for economic growth and critical in securing energy access”

According to the Agency’s latest forecast, 730 GW of HELE plants will be built by 2040. More than half of the coal fleet in developing countries will increasingly consist of HELE plants by that time.

The addition of new HELE plants is highlighted by the commitment of 22 countries who have submitted Nationally Determined Contributions under the Paris Agreement that include a role for HELE technology.

Welcoming the report’s release,
RELATED NEWS: Birol set to issue wakeup call at World Energy Outlook launch

 



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