Released October 14, 2021 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Propelled by rising concerns over global climate change, the International Energy Agency (IEA) (Paris, France) has dramatically increased its analytic work on energy markets and climate change in recent years, which has enabled it to produce detailed and complex projections about energy use and carbon dioxide (CO2) emissions. This year's version of its flagship publication, the World Energy Outlook (WEO), features thematic and title parallels to the Star Wars movie series: If the theme of last year's WEO was "The Rise of Renewables," then its WEO-2021 could be titled, "The Revenge of the Status Quo."
"The world's hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems," said IEA Executive Director Fatih Birol. "Governments need to resolve this ... by giving a clear and unmistakable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future. The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense."
IEA issued WEO-2021 on October 13, a month earlier than usual, in an attempt to give participants at the upcoming U.N. climate change global conference in Glasgow, Scotland, a handbook to guide efforts to transition their energy systems in ways that are "secure, affordable and fair for all citizens." The two-week Glasgow conference begins at the end of October.
"In 2020, even while economies bent under the weight of COVID‐19 lockdowns, renewable sources of energy such as wind and solar PV (photovoltaic) continued to grow rapidly, and electric vehicles set new sales records," the IEA noted in this year's WEO. Fast forward to 2021, however, and a different trend is evident, where "every data point showing the speed of change in energy can be countered by another (data point) showing the stubbornness of the status quo."
"The rapid but uneven economic recovery from last year's COVID‐induced recession is putting major strains on parts of today's energy system, sparking sharp price rises in natural gas, coal and electricity markets," the agency continued. "For all the advances being made by renewables and electric mobility, 2021 is seeing a large rebound in coal and oil use. Largely for this reason, it is also seeing the second‐largest annual increase in CO2 emissions in history."
The IEA noted that public spending on sustainable energy in economic recovery packages has only mobilized around one‐third of the investment required to jolt the energy system onto a new set of rails. The largest shortfall was in the developing economies, which continue to battle pressing public health crises.
"Today's climate pledges would result in only 20% of the emissions reduction by 2030 that are necessary to put the world on a path towards net zero by 2050," Birol said. "Reaching that path requires investment in clean energy projects and infrastructure to more than triple over the next decade. Some 70% of that additional spending needs to happen in emerging and developing economies, where financing is scarce and capital remains up to seven times more expensive than in advanced economies."
In a report issued earlier this year, The Path to Net Zero, the IEA charted "a narrow but achievable roadmap" to achieve net-zero CO2 emissions that would limit temperature gain to 1.5 degree Celsius by 2050. In other words, to fulfill the terms of the Paris Agreement. That roadmap, called the net-zero emissions (NZE) scenario, carried extraordinarily heavy costs, which caused some to question its feasibility. Unfortunately, as that report illuminated, and the just-released WEO confirmed, there remains a large gap between stated commitments by countries to lower CO2 emissions and actions by those countries to fulfill their commitments, which calls into question the world's ability to head off a climate disaster. For more on the IEA's net-zero report, see May 24, 2021, article -- IIR Energy Analysts Question Feasibility of IEA Roadmap to Net-Zero Emissions.
The year's WEO comes after a year of extreme weather events and natural disasters that scientists say were caused by, or made worse by, a warming planet. And the report comes as energy markets around the world are convulsed in chaos: prices for liquefied natural gas (LNG) have shot up to $50 per million British thermal units (MMBtu) in Asian markets, natural gas is in short supply in Europe, and panic buying and a truck driver shortage in the U.K. forced the government to deploy about 200 military personnel to deliver fuels to gasoline stations. Sharply rising energy costs also are driving concerns over inflation.
"Pressures on the energy system are not going to relent in the coming decades," predicted the IEA report. "The energy sector is responsible for almost three‐quarters of the emissions that have already pushed global average temperatures 1.1 degree Celsius higher since the pre‐industrial age, with visible impacts on weather and climate extremes. The energy sector has to be at the heart of the solution to climate change."
That would be a tall enough order if the agency was just referring to the world's advanced economies. But the developing world, where most of the increase in energy consumption is expected to take place in the coming decades, is going through "what has historically been an energy‐ and emissions‐intensive period of urbanization and industrialization. Today's energy system is not capable of meeting these challenges; a low emissions revolution is long overdue."
The report provides a detailed tabulation of how far countries have come in their clean energy transitions, how far they still have to go to reach the 1.5-degree Celsius goal, and the actions that governments and others can take to seize opportunities and avoid pitfalls along the way. This year's WEO report uses the three scenarios developed for its net-zero report to show what commitments are needed to keep temperature gains since the start of the Industrial Revolution to 1.5 degree Celsius by 2050.
In all three scenarios developed by the IEA, oil demand declines, although the timing and speed of the drop vary widely. If all today's announced climate pledges are met, the world would still be consuming 75 million barrels of oil per day by 2050 -- down from around 100 million today -- but that plummets to 25 million in the Net Zero Emissions by 2050 Scenario. Natural gas demand increases in all scenarios over the next five years, but there are sharp divergences after this. The prospects are bleak for coal power in all scenarios, though China's support for building coal-fired power plants at home and abroad are a critical unknown.
Stated Policies Scenario (STEPS) represents a path based on the energy and climate measures governments have actually put in place to date, as well as specific policy initiatives that are under development. In this scenario, almost all of the net growth in energy demand through 2050 is met by low emissions sources, but that leaves annual emissions still around today's levels. As a result, global average temperatures are still rising when they hit 2.6 degrees Celsius above pre-industrial levels in 2100. This scenario also sees an accelerating pace of change in the power sector, sufficient to realize a gradual decline in the sector's emissions even as global electricity demand nearly doubles by 2050. However, this is offset by continued growth in emissions from industry, such as the production of cement and steel, and heavy‐duty transport, such as freight trucks.
Announced Pledges Scenario (APS): In the run-up to this year's climate summit, dozens of countries, including the European Union, made new commitments to lower CO2 and meet a net-zero emissions goal by 2050. If these commitments are implemented in time and in full, they start to bend down the global emissions curve. By 2030, low emissions sources of power generation account for the vast majority of capacity additions in this scenario, with annual additions of solar PV and wind approaching 500 gigawatts (GW) by 2030. As a result, coal consumption in the power sector in 2030 is 20% below recent highs. Rapid growth in electric vehicle sales and continued improvements in fuel efficiency leads to a peak in oil demand around 2025. The successful pursuit of all announced pledges means that global energy‐related CO2 emissions fall by 40% over the period to 2050. All sectors see a decline in emissions, with the electricity sector delivering by far the largest. The global average temperature gain in 2100 is held to around 2.1 degrees Celsius above pre‐industrial levels. The APS does not result in in net-zero emissions. It sees a doubling of clean energy investment and financing over the next decade, but this acceleration is not sufficient to overcome the inertia of today's energy system.
Net Zero Emissions by 2050 Scenario (NZE): This scenario envisions dramatic increases in renewables and advanced energy projects like green hydrogen. The IEA emphasized the "huge economic opportunities" created by this case. Successfully pursuing net zero by 2050 would create a market for wind turbines, solar panels, lithium-ion batteries, electrolyzers and fuel cells of well over $1 trillion a year by 2050, comparable in size to the current oil market. Approximately 26 million new jobs are created in this scenario.
Achieving net-zero by 2050 depends on the world achieving four priorities over the next decade:
Click on the image at right to see what achievement of these four priorities will cost, and what benefits they will produce.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
"The world's hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems," said IEA Executive Director Fatih Birol. "Governments need to resolve this ... by giving a clear and unmistakable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future. The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense."
IEA issued WEO-2021 on October 13, a month earlier than usual, in an attempt to give participants at the upcoming U.N. climate change global conference in Glasgow, Scotland, a handbook to guide efforts to transition their energy systems in ways that are "secure, affordable and fair for all citizens." The two-week Glasgow conference begins at the end of October.
"In 2020, even while economies bent under the weight of COVID‐19 lockdowns, renewable sources of energy such as wind and solar PV (photovoltaic) continued to grow rapidly, and electric vehicles set new sales records," the IEA noted in this year's WEO. Fast forward to 2021, however, and a different trend is evident, where "every data point showing the speed of change in energy can be countered by another (data point) showing the stubbornness of the status quo."
"The rapid but uneven economic recovery from last year's COVID‐induced recession is putting major strains on parts of today's energy system, sparking sharp price rises in natural gas, coal and electricity markets," the agency continued. "For all the advances being made by renewables and electric mobility, 2021 is seeing a large rebound in coal and oil use. Largely for this reason, it is also seeing the second‐largest annual increase in CO2 emissions in history."
The IEA noted that public spending on sustainable energy in economic recovery packages has only mobilized around one‐third of the investment required to jolt the energy system onto a new set of rails. The largest shortfall was in the developing economies, which continue to battle pressing public health crises.
"Today's climate pledges would result in only 20% of the emissions reduction by 2030 that are necessary to put the world on a path towards net zero by 2050," Birol said. "Reaching that path requires investment in clean energy projects and infrastructure to more than triple over the next decade. Some 70% of that additional spending needs to happen in emerging and developing economies, where financing is scarce and capital remains up to seven times more expensive than in advanced economies."
In a report issued earlier this year, The Path to Net Zero, the IEA charted "a narrow but achievable roadmap" to achieve net-zero CO2 emissions that would limit temperature gain to 1.5 degree Celsius by 2050. In other words, to fulfill the terms of the Paris Agreement. That roadmap, called the net-zero emissions (NZE) scenario, carried extraordinarily heavy costs, which caused some to question its feasibility. Unfortunately, as that report illuminated, and the just-released WEO confirmed, there remains a large gap between stated commitments by countries to lower CO2 emissions and actions by those countries to fulfill their commitments, which calls into question the world's ability to head off a climate disaster. For more on the IEA's net-zero report, see May 24, 2021, article -- IIR Energy Analysts Question Feasibility of IEA Roadmap to Net-Zero Emissions.
The year's WEO comes after a year of extreme weather events and natural disasters that scientists say were caused by, or made worse by, a warming planet. And the report comes as energy markets around the world are convulsed in chaos: prices for liquefied natural gas (LNG) have shot up to $50 per million British thermal units (MMBtu) in Asian markets, natural gas is in short supply in Europe, and panic buying and a truck driver shortage in the U.K. forced the government to deploy about 200 military personnel to deliver fuels to gasoline stations. Sharply rising energy costs also are driving concerns over inflation.
"Pressures on the energy system are not going to relent in the coming decades," predicted the IEA report. "The energy sector is responsible for almost three‐quarters of the emissions that have already pushed global average temperatures 1.1 degree Celsius higher since the pre‐industrial age, with visible impacts on weather and climate extremes. The energy sector has to be at the heart of the solution to climate change."
That would be a tall enough order if the agency was just referring to the world's advanced economies. But the developing world, where most of the increase in energy consumption is expected to take place in the coming decades, is going through "what has historically been an energy‐ and emissions‐intensive period of urbanization and industrialization. Today's energy system is not capable of meeting these challenges; a low emissions revolution is long overdue."
The report provides a detailed tabulation of how far countries have come in their clean energy transitions, how far they still have to go to reach the 1.5-degree Celsius goal, and the actions that governments and others can take to seize opportunities and avoid pitfalls along the way. This year's WEO report uses the three scenarios developed for its net-zero report to show what commitments are needed to keep temperature gains since the start of the Industrial Revolution to 1.5 degree Celsius by 2050.
In all three scenarios developed by the IEA, oil demand declines, although the timing and speed of the drop vary widely. If all today's announced climate pledges are met, the world would still be consuming 75 million barrels of oil per day by 2050 -- down from around 100 million today -- but that plummets to 25 million in the Net Zero Emissions by 2050 Scenario. Natural gas demand increases in all scenarios over the next five years, but there are sharp divergences after this. The prospects are bleak for coal power in all scenarios, though China's support for building coal-fired power plants at home and abroad are a critical unknown.
Stated Policies Scenario (STEPS) represents a path based on the energy and climate measures governments have actually put in place to date, as well as specific policy initiatives that are under development. In this scenario, almost all of the net growth in energy demand through 2050 is met by low emissions sources, but that leaves annual emissions still around today's levels. As a result, global average temperatures are still rising when they hit 2.6 degrees Celsius above pre-industrial levels in 2100. This scenario also sees an accelerating pace of change in the power sector, sufficient to realize a gradual decline in the sector's emissions even as global electricity demand nearly doubles by 2050. However, this is offset by continued growth in emissions from industry, such as the production of cement and steel, and heavy‐duty transport, such as freight trucks.
Announced Pledges Scenario (APS): In the run-up to this year's climate summit, dozens of countries, including the European Union, made new commitments to lower CO2 and meet a net-zero emissions goal by 2050. If these commitments are implemented in time and in full, they start to bend down the global emissions curve. By 2030, low emissions sources of power generation account for the vast majority of capacity additions in this scenario, with annual additions of solar PV and wind approaching 500 gigawatts (GW) by 2030. As a result, coal consumption in the power sector in 2030 is 20% below recent highs. Rapid growth in electric vehicle sales and continued improvements in fuel efficiency leads to a peak in oil demand around 2025. The successful pursuit of all announced pledges means that global energy‐related CO2 emissions fall by 40% over the period to 2050. All sectors see a decline in emissions, with the electricity sector delivering by far the largest. The global average temperature gain in 2100 is held to around 2.1 degrees Celsius above pre‐industrial levels. The APS does not result in in net-zero emissions. It sees a doubling of clean energy investment and financing over the next decade, but this acceleration is not sufficient to overcome the inertia of today's energy system.
Net Zero Emissions by 2050 Scenario (NZE): This scenario envisions dramatic increases in renewables and advanced energy projects like green hydrogen. The IEA emphasized the "huge economic opportunities" created by this case. Successfully pursuing net zero by 2050 would create a market for wind turbines, solar panels, lithium-ion batteries, electrolyzers and fuel cells of well over $1 trillion a year by 2050, comparable in size to the current oil market. Approximately 26 million new jobs are created in this scenario.
Achieving net-zero by 2050 depends on the world achieving four priorities over the next decade:
- Deliver a surge in clean electrification
- Capture the full potential of energy efficiency
- Prevent methane leaks from fossil fuel operations
- Boost clean energy innovation
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
