Date: October 27
The global energy crisis triggered by the Russian invasion of Ukraine has opened a deeper debate on ways to reduce the risk of future outages and promote energy security. Although it is a global crisis, Europe has become the focus and natural gas is the center of the stage, especially during the upcoming winter in the northern hemisphere, according to the latest edition of the World Energy Outlook, from the International Agency for energy (IEA).
According to the IEA, energy markets remain extremely vulnerable and today’s energy shock is a reminder of the fragility and unsustainability of the current energy system. So the report questions whether the crisis will be a setback for clean energy transitions or catalyze faster action. “Climate policies and net-zero emissions commitments have been blamed in some quarters for contributing to rising energy prices, but there is little evidence of this. In the most affected regions, higher shares of renewable energy were correlated with lower electricity prices, and more efficient homes and electrified heat have provided an important buffer for some consumers, but not enough.
New policies, cleaner energy
Faced with the instability of the system and the uncertainty caused by the war in Ukraine, governments have had to opt for accelerated decisions in the short, medium and long term. And it is these policy responses that the IEA says are accelerating the rise of a clean energy economy.
As outlined in the WEO, new policies in major energy markets help drive annual investment in clean energy to more than $2 trillion (nearly €2 trillion) by 2030 in STEPS, an increase of more than 50% from today.
Source: IEA
“Clean energy becomes a great opportunity for growth and employment, and an important stage for international economic competition. By 2030, thanks in large part to the US Inflation Reduction Act, annual solar and wind capacity additions in the United States will grow two-and-a-half times from current levels, while sales of electric cars will be seven times larger”, explains the IEA.
Source: IEA
As for China, the new targets continue to spur massive clean energy construction in the Asian country, meaning its coal and oil consumption will peak before the end of this decade.
While Japan’s Green Transformation (GX) program provides a major funding boost for technologies including low-emission nuclear hydrogen and ammonia, Korea is also seeking to increase the share of nuclear and renewable energy in its energy mix. India is moving further towards its national renewable capacity target of 500 gigawatts (GW) by 2030, with renewables meeting nearly two-thirds of the country’s rapidly growing electricity demand.
In the report, the IEA assures that “the faster deployment of renewable energies and improvements in efficiency in the European Union will reduce the demand for natural gas and oil in the EU by 20% this decade, and the demand for coal by 50%, a boost to which is added the additional urgency of the need to find new sources of economic and industrial advantages beyond Russian gasoline”.
Renewable future
Another of the WEO’s findings was that, as markets rebalance, renewables, backed by nuclear power, see sustained gains; the advantage for coal in the current crisis is temporary. The rise in renewable electricity generation is fast enough to outpace the growth in total electricity generation, reducing the contribution of fossil fuels to power generation, the report states.
Source: IEA
On the other hand, investments in clean electricity and electrification, along with expanded and modernized grids, offer clear and cost-effective opportunities to cut emissions faster and lower electricity costs from their current highs. According to the IEA, the current growth rates for the deployment of solar photovoltaic, wind, electric vehicles and batteries, if maintained, would lead to a much faster transformation than that projected in the STEPS (Stated Policies Scenario), although this would require supportive policies not only in the main markets for these technologies, but throughout the world.
By 2030, if countries meet their climate commitments, one in two cars sold in the European Union, China and the United States will be electric.
The WEO ensures that the supply chains of some key technologies, including batteries, solar PV and electrolysers, are expanding at a rate that supports greater global ambition.
WEO explains that if all announced manufacturing expansion plans for solar PV see the light of day, manufacturing capacity would exceed APS (Announced Pledges Scenario) implementation levels in 2030 by around 75% and would be close to the levels required in the NZE Scenario (Net Zero Emissions by 2050 Scenario).
While in the case of electrolysers for hydrogen production, the potential excess capacity of all announced projects in relation to the deployment of APS in 2030 is around 50%.
Furthermore, in the electric vehicle sector, the expansion of battery manufacturing capacity reflects the change taking place in the auto industry, which has at times moved faster than governments in setting targets for mobility. electrical. “These clean energy supply chains are a huge source of job growth, with clean energy jobs already outpacing fossil fuel jobs around the world and projected to grow from around 33 million today to almost 55 million in 2030 in the APS”, reveals the WEO.
Source: Energy Review
