Global Energy at a Crossroads

The Intergovernmental Panel on Climate Change's most recent publication, taken together with the International Energy Agency's latest update to the World Energy Report, establishes that the global energy market, and the globe itself, are at a point at which decisions and actions taken now will cement the future firmly. For better, or worse.

Under present planned policies, energy demand is on track to increase by 25% to 2040. It will involve investment to the order of $2 trillion every year.

The demand is buoyed by electrification across industries (automotive, medical, manufacturing, etc.) and providing universal modern energy worldwide — primarily to developing Asia, Latin America, the Middle East, Sub-Saharan and North Africa. Clean cooking is the principle imperative there. Indoor air pollution is principally caused by smoke from antiquated methods of food preparation.

IEA Executive Director Dr Fatih Birol

70% of all investments in energy supply will be directly driven by governments. Coherent cooperation is clearly cardinal to successful sustainability. Dr Fatih Birol, the IEA’s Executive Director: “Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centers, and expanding basic access to energy in Africa and elsewhere.

The IEA's Sustainable Development Scenario (SDS) is an avenue forward towards that via an inclusive approach that treats climate concerns, air quality, as well as modernising developing countries and existing industries comprehensively. All with an overarching aim to attain (or excel) targets agreed on at Paris.

Improved price of solar photovoltaics and battery storage systems are pivotal. PV is on a trajectory to exceed in installed capacity globally — first wind by 2025, then hydro at about 2030 and finally coal come 2040. However, this requires stable commitments by successive governments to patronise PV and incentivise stake-holders to follow suit. There are immensely positive steps in motion already.

Claire Perry, Energy Minister for the UK

The UK, where renewables have tripled while unclean energy has fallen by 1/3 in the past 5 years, and there are only 6 coal-fired power plants remaining operative, is set for fossil fuel free Summers by 2050. Spain is trying for 100% renewables at around the same time by undertaking to see to it 3,000MW of mixed renewables will be introduced each year for the coming 10 years.

Spain specifically, best illustrates how precarious such signs to the good actually are. With only a quarter of parliamentary seats, the plan is far from secure. Past initiatives have been postponed, such as a proposed ban on new cars with petrol or diesel engines.

And it isn't enough by itself in any event. BloombergNEF suggests even exciting and optimistic projections, should they eventuate as predicted, are not sufficient to meet the 2°C target: leave aside the IPCC's most recent recommendation of 1.5°C. Hydrocarbons in particular require replacing or new ways of utilising them that dramatically reduce their environmentally deleterious consequences.

As Dr Fatih Birol further concluded —

This means that if the world is serious about meeting its climate targets then, as of today, there needs to be a systematic preference for investment in sustainable energy technologies. But we also need to be much smarter about the way that we use our existing energy system. We can create some room for maneuver by expanding the use of Carbon Capture Utilization [sic] and Storage, hydrogen, improving energy efficiency, and in some cases, retiring capital stock early. To be successful, this will need an unprecedented global political and economic effort.

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