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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
Clean energy technologies are set to play a far larger role by 2030, according to the latest analysis by the International Energy Agency (IEA). However, demand for fossil fuels still signals significant failure to reach emission reduction goals as the global temperature is likely to exceed 1.5°C above the pre-industrial level.
Investment in clean energy has risen by 40% since 2020, and there will be a 10-fold increase in the number of electric vehicles (EVs) on the road by 2030, according to the influential World Energy Outlook 2023 (WEO) report, published by the IEA in the run-up to COP28, to be held in Dubai later this month.
The IEA notes that ‘not all clean technologies are thriving and some supply chains, notably for wind, are under pressure’. But fortunately there are ‘striking examples of an accelerating pace of change’ – like EV sales.
The new WEO report reflects three different scenarios. The Stated Policies Scenario (STEPS) provides a forecast base on the latest government policies, including energy, climate and related industrial policies. The Announced Pledges Scenario (APS) assumes all national energy and climate targets are met in full and on time, ‘though much progress is still required to meet these objectives’ it admits. While the Net Zero Emissions Scenario (NZES) sees efforts to limit global warming to 1.5°C above pre-industrial levels as a more challenging goal.
By 2030 the report predicts that renewables will account for almost 50% of the global electricity mix, up from 30% today. Meanwhile, heat pumps and other electric heating systems will outsell gas boilers, the IEA predicts. What’s more, demand for fossil fuels – oil, gas and coal – are predicted to peak by 2030.
On the bright side, the spend on solar deployment exceeds $1bn/d, and more than 500 GW of renewables generation capacity are set to be added in 2023.
The IEA recognises the impact of the Inflation Reduction Act in the US and projects that 50% of new US car registrations will be electric in 2030. While in the European Union, heat pump installations in the STEPS analysis are predicted to reach two thirds of the level needed under the NZES.
China is moving forward, with projected additions of solar photovoltaics (PV) and offshore wind triple those of predictions made in the 2021 report. Prospects for nuclear power have also improved in leading markets, with support for lifetime extensions of existing nuclear reactors in countries including the US, Japan and Korea, and newbuilds in several more.
However, the report points out that ‘demand for fossil fuels is set to remain too high to keep within reach of the Paris Agreement goal of limiting the rise in average global temperatures to 1.5°C'. The WEO report finds that despite an ‘impressive’ rise in clean energy growth, carbon emissions are still set to raise global average temperatures by about 2.4°C this century, based on today’s governmental policy settings.
In a nutshell, the report emphasises: ‘Simply cutting spending on oil and gas will not get the world on track for the NZE scenario.’ It maintains that: ‘The key to an orderly transition is to scale up investment in all aspects of a clean energy system.’
Given these calculations, the IEA calls for urgent action, with a tripling of renewable energy capacity; doubling the rate of energy efficiency improvements to 4%/y; ramping up electrification and slashing of methane emissions from fossil fuel operations by 75%; together with providing more than 80% of the emissions reductions needed by 2030 to put the energy sector on a pathway to limit warming to 1.5°C.
Furthermore, it suggests ‘innovative, large-scale financing mechanisms’ should be developed to triple energy investments in emerging and developing nations, while also pursuing measures to ensure an orderly decline in the use of fossil fuels.
The IEA proposes that meeting these objectives can form the basis for discussions at the COP28 climate change conference later this month.