International Energy Agency Produces 2021 Outlook

The International Energy Agency or IEA is an independent body established back in 1974, first, to deal with major oil supply disruptions, and later, to look at all forms of energy and the technologies involved. Today, it studies the issues driving our global energy future.

In the last week, the IEA published its World Energy Outlook for 2021. This follows an earlier report called the Net Zero Emissions by 2050 Scenario published in May. In that document, the IEA charted a path to limit global atmospheric warming to no more than 1.5 Celsius (2.7 Fahrenheit) by 2050. But in this latest publication, the focus is on the emerging energy economy and how far we still have to go to achieve the net-zero 2050 goal. And the timing of the publication a few weeks before the global COP26 Climate Summit in Glasgow, Scotland, is no coincidence.

The new publication gives those determining future policy a detailed look at how countries are making a clean energy transition so far. It notes the new global energy economy that is emerging is not happening at a pace to meet the objective of keeping mean temperatures globally within the 1.5 Celsius threshold. It further states that fossil fuel demand continues to climb and because of this, the 1.5 Celsius rise will happen as early as 2030 with global mean atmospheric rise reaching 2.6 Celsius (4.7 Fahrenheit) over pre-Industrial levels by the end of this century.

Here are some of the highlights of this new IEA document.

• Based on current country commitments in the form of announced pledges, at best we will see atmospheric mean temperatures rise 2.1 Celsius (3.8 Fahrenheit) by 2100 with the peaking of oil demand in four years. Total greenhouse gas (GHG) emissions based on these national pledges will drop by 21 gigatons at mid-century.
• Actions needed over the next decade that can mitigate the above forecast with the hope to stabilize temperatures at the 1.5 Celsius threshold will require a massive growth in clean electricity, achieving the full potential of energy efficiency, preventing leaks from existing fossil fuel operations, and boosting budgets and efforts around clean energy innovation.
• Developing World economies will need to chart a lower emissions path that is different from the Developed World. Today, they are relatively low-emitters and are transitioning to more urban-centred and middle-class lifestyles which means becoming more energy-intensive. It is, therefore, anticipated that GHG emissions in these countries will rise by more than 5 Gigatons by 2050, which means that the Developed World will need to provide a corresponding offset through accelerated lowered emissions.
• Jobs will disappear in the fossil-fuel sector as the transition to clean energy takes hold. The shift will see rapid expansion in jobs for the latter. Energy from coal is expected to decline by 100 Gigawatts per year throughout the decade with a corresponding increase in renewable energy capacity to match that number and exceed it. But this phasing out of coal will require social programs to support workers and communities affected.
• The move to more renewable energy is already causing gaps in delivery. Of note recently, China, as it begins reducing its reliance on coal-fired power has been experiencing rolling blackouts impacting manufacturing and domestic energy use. The transition is also causing price volatility and sticker shock for businesses and consumers. Energy efficiency gains plus a drop in consumption of fossil fuels can help to mitigate the shock to the economies of nations from this current volatility which will continue through the rest of the decade.
• To transition towards the net-zero emissions goal by 2050 requires investments to accelerate from their current levels to around $4 trillion USD annually by 2030. This presents an ongoing challenge to financiers, investors and policymakers.
• The estimated investment for the world to achieve net-zero emissions by 2050 amounts to $27 trillion USD to be spent on wind turbines, solar panels, batteries, electrolyzers, fuel cells, and geothermal. These cumulatively by 2050 will represent an energy industry of greater value than today’s fossil-fuel companies combined.

As monumental as the requirement that lies ahead is, the IEA sees a shift towards net-zero already starting. Renewable energy sources are increasing at a faster rate in the last two decades than ever before, while electric vehicle sales keep setting new annual records. While energy demand continues to rise 20% per decade, so are investments in energy which are anticipated to be six times higher for renewable and clean energy sources than for oil and gas by 2030.

The key for the nations of the world to bend the climate change curve downward will be to accelerate these changes even faster. Based on current trends, clean energy annual investments will triple from current levels to approach $4 trillion USD annually by 2030. IEA forecasts predict over 3 billion electric vehicles will be on the road by then and that three Terawatt-hours of electricity will be delivered from battery storage deployment alone.

The dark side of the report states the likely consequences of not rapidly accelerating the change to meet the net-zero 2050 target. That alternate world will experience mean global temperature trajectories exceeding 3.5 Celsius (6.3 Fahrenheit) by 2100, an 80 to 130% increase in “ecological droughts,” the risk of ice sheet collapse, disruptions to ocean circulation currents, and irreversible changes to permafrost, and boreal and tropical rainforests.

Glasgow, here we come. It’s time for the politicians there to do the right thing, and do no further harm to the planet.