by Felix von Geyer
Despite global greenhouse gas emissions falling due to the global COVID19 pandemic that has reduced total 2020 global energy consumption by an estimated five per cent according to today’s release of the annual World Energy Outlook by that the International Energy Agency, global energy demand is set to rebound to pre-pandemic levels by early 2023.
A prolonged pandemic and deeper economic slump will delay this rebound until 2025, predicts the IEA in its report based on the Stated Policies Scenario of world governments.
“Low economic growth is not a low emissions strategy,” declared the IEA’s Executive Director, Dr. Fatih Birol.
Indeed, to achieve a forty per cent reduction in global greenhouse gas emissions by 2030 requires low emissions sources for seventy-five per cent of global electricity demand by 2030 versus only forty per cent in 2019; and for electric vehicles to comprise half of all vehicle sales by 2030 – compared to only two and a half per cent in 2019.
Currently, the IEA states emissions from the global infrastructure of coal plants, steel mills and cement plants alone are locking the world into a 1.65°C average glob al temperature increase, above the stated aspirational target of only a 1.5°C temperature increase under the 2015 Paris Treaty to avoid serious climate change.
However, full implementation of the IEA’s Sustainable Recovery Plan would result in a rapid roll-out of solar, wind, energy efficiency technologies and provide impetus for a major scale-up of hydrogen technologies, infrastructure and Carbon, Capture, Utilization and Storage (CCUS) to 2030, according to the World Energy outlook (WEO).
The IEA also called for a “new momentum” behind nuclear power.
The future energy mix from the Stated Policies Scenario (STEPS) is projected to result in lower oil and gas prices due to reduced post-pandemic demand with the subsequent slump in post-pandemic oil and gas investment serving to increase market volatility, most notably for oil, according to the WEO.
Oil will remain further vulnerable to “major economic uncertainties” stemming from the pandemic and Birol, prescribed the era of global oil demand growth to end during the next decade. However, he added the caveat that, “without a large shift in government policies, there is no sign of a rapid decline. Based on today’s policy settings, a global economic rebound would soon push oil demand back to pre-crisis levels.”
Coal’s share of the energy mix in an era of climate change is further set to reduce. For the first time since the Industrial revolution, coal is forecast to comprise under twenty per cent of the global energy mix by 2040.
In contrast, natural gas, especially for Asian markets, was set for significant growth of possibly thirty per cent but, in advanced industrial countries, natural gas demand would decline for the time decline by 2040.
“I see solar becoming the new king of the world’s electricity markets,” stated Birol. “It is on track to set new records for deployment every year after 2022,” he added.
Solar energy’s growth would be “even more spectacular,” Birol claimed, should governments and investors step up their investment and roll-out in line with the IEA’s Sustainable Development Scenario.
Strong growth in renewables would need requisite investment in electricity grids, according to the IEA, but certainly solar photovoltaic (PV) remains destined to be consistently cheaper than coal and gas and under the STEPS scenario, will account for eighty per cent of the growth in electricity demand to 2030.
Hydro-electric power will remain the largest source of renewable energy but, the World Economic Outlook is certain that Solar PV will be the largest source of growth in electricity demand to 2030 followed by wind, both onshore and offshore wind capacity.
From a development perspective, the IEA stressed that at least 100 million people worldwide had been adversely affected by the pandemic’s resultant economic crisis making electricity access unaffordable where they had electricity connections.
Further analysis to follow.