Despite the clear advances in the clean energy generation landscape worldwide the demand for fossil fuels globally is set to remain far too high to achieve the Paris Agreement goal of limiting the rise in average global temperatures to 1.5 °C.
To keep the 1.5 °C target within reach, the International Energy Agency proposes a five-pillar global strategy in the 2023 edition of IEA’s World Energy Outlook released today.
This five pillars strategy to keep alive the Paris Agreement goal of limiting climate change to 1.5 °C constitutes, IEA believes, a blueprint that can also provide the basis for an agreement on a successful energy package at the COP28 climate change conference in Dubai.
“Every country needs to find its own pathway, but international cooperation is crucial for accelerating clean energy transitions,” IEA Executive Director Fatih Birol said. “In particular, the speed at which emissions decline will hinge in large part on our ability to finance sustainable solutions to meet rising energy demand from the world’s fast growing economies. This all points to the vital importance of redoubling collaboration and cooperation, not retreating from them.”
A clean transition, clearly on course and unstoppable
The phenomenal rise of clean energy technologies such as solar, wind, electric cars and heat pumps is reshaping how we power everything from factories and vehicles to home appliances and heating systems.
“The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’, and the sooner the better for all of us,” said IEA Executive Director Fatih Birol. And he added: “Governments, companies and investors need to get behind clean energy transitions rather than hindering them. There are immense benefits on offer, including new industrial opportunities and jobs, greater energy security, cleaner air, universal energy access and a safer climate for everyone. Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever.”
But not happening enough fast to reach the 1.5°C target by 2030
The WEO-2023 forecast a clear transition to renewables and a drop in global demand of fossil fuels based on
1.- Clean energy technologies will surge between now and 2030 based on today’s policy settings alone. By the end of the decade, there are set to be almost 10 times as many electric cars on the road worldwide. Solar will generate more electricity than the entire United States does currently, and renewables’ share of the global electricity mix will near 50%, up from around 30% today.
2.- In this scenario, the share of fossil fuels in global energy supply, which has been standing for decades at around 80%, declines to 73% by 2030, and global energy-related CO2 emissions peak by 2025.
IEA explains on this point: “A legacy of the global energy crisis may be to usher in the beginning of the end of the fossil fuel era: the momentum behind clean energy transitions is now sufficient for global demand for coal, oil and natural gas to all reach a high point before 2030 in the STEPS (Stated Policies Scenario). The share of coal, oil and natural gas in global energy supply, stuck for decades around 80%, starts to edge downwards and reaches 73% in the STEPS (Stated Policies Scenario) by 2030.
3.- Total energy demand in China, the world’s largest energy consumer, is set to reach a high around the middle of this decade as its economy slows and undergoes structural changes. Continued dynamic growth in clean energy will put the country’s fossil fuel demand and emissions into decline.
The analysis of the evolution in the role that China is playing in the demand of coal and fossil fuels is the following: “Over the past ten years, China accounted for almost two-thirds of the rise in global oil use, nearly one-third of the increase in natural gas, and has been the dominant player in coal markets. But it is widely recognised, including by the country’s leadership, that China’s economy is reaching an inflection point. After a very rapid building out of the country’s physical infrastructure, the scope for further additions is narrowing. The country already has a world-class high-speed rail network; and residential floorspace per capita is now equal to that of Japan, even though GDP per capita is much lower. This saturation points to lower future demand in many energy-intensive sectors like cement and steel. China is also a clean energy powerhouse, accounting for around half of wind and solar additions and well over half of global EV sales in 2022.
Momentum behind China’s economic growth is ebbing and there is greater downside potential for fossil fuel demand if it slows further. In our scenarios, China’s GDP growth averages just under 4% per year to 2030. This results in its total energy demand peaking around the middle of this decade, with robust expansion of clean energy putting overall fossil fuel demand and emissions into decline. If China’s near-term growth were to slow by another percentage point, this would reduce 2030 coal demand by an amount almost equal to the volume currently consumed by the whole of Europe. Oil import volumes would decline by 5% and LNG imports by more than 20%, with major implications for global balances.”
All these three facts and trends mean an important shift. However, if demand for fossil fuels remains at a high level, as has been the case for coal in recent years, and as is the case in the STEPS projections for oil and gas, we are far from reaching global climate goals set in Paris.
Not meeting the global climate goals set in Paris is not only worsening climate impacts after a year of record-breaking heat, but also undermining the security of the energy system, which was built for a cooler world with less extreme weather events, IEA warns.
A five pillar strategy to keep the 1.5°C target within reach
The five pillars to get the world on track of achieveing the 1.5°C global warming target by 2030 includes actions to be taken in the following five fields:
1.- Tripling global renewable capacity
2.- Doubling the rate of energy efficiency improvements
3.- Slashing methane emissions from fossil fuel operations by 75%
4.- Establishing large-scale financing mechanisms to support clean energy investments in emerging and developing economies
5.- Pursuing measures to ensure an orderly decline in the use of fossil fuels.
The IEA points on the investment side of the issue as well that “the end of the growth era for fossil fuels does not mean an end to fossil fuel investment, but it undercuts the rationale for any increase in spending. Until this year, meeting projected demand in the STEPS (Stated Policies Scenario)implied an increase in oil and gas investment over the course of this decade, but a stronger clean energy outlook and lower projected fossil fuel demand means this is no longer the case. However, investment in oil and gas today is almost double the level required in the NZE (net zero emissions) Scenario in 2030, signalling a clear risk of protracted fossil fuel use that would put the 1.5 °C goal out of reach.”
And further: There’s potential for stronger growth of solar PV reaching 800 GW of new solar PV capacity by the end of the decade
The 2023 WEO report also highlights the potential for stronger growth of solar PV this decade allowing further reductions in coal-fired and gas -fired power generation.
Renewables are set to contribute 80% of new power generation capacity to 2030 under current policy settings, with solar alone accounting for more than half of this expansion.
However, this scenario takes into account only a fraction of solar’s potential, according to the WEO analysis.
By the end of the decade, the world is set to have manufacturing capacity for more than 1 200 gigawatts (GW) of solar panels per year, but it is projected to actually deploy only 500 GW in 2030.
If they were added over 800 GW of new solar PV per year by 2030. The implications would be particularly strong for China, says IEA, reducing coal-fired generation by a further 20% by 2030 compared with the STEPS. Without any additional retirements, the average annual capacity factor for coal-fired power plants would fall to around 30% in 2030, from over 50% today.
On the image.- A 320 MW Floating PV Plant in Dezhou (China’s ”Solar Valley”). The floating PV plant is located on top of a fish farm. This smart PV farm combines phishery and electric power generation, while the photovoltaic pannels produce electric power fish are farmed below. This floating solar farm, the largest in its kind, uses Huawei’s PID suppression technology which ensures stable plant operations in hot and humid environments. It also uses Huawei’s Smart IV Curve Diagnosis, which enables online I-V curve analysis on entire strings with advanced diagnosis algorithm.
The scanning would help to find out and identify the strings with low performance or faults, which would help to achieve proactive maintenance, higher O&M efficiency and lower operation cost.
The plant is currently connected to the power grid and can produce 420 million KWh of clean electricity, saving 205,000 tons of coal. The image is a pick frame taken from Huawei’s video on this floating solar farm published on You Tube. To watch the whole video clic here
The consequences of adding over 800 GW of new solar PV per year by 2030 would spread well beyond China: in this case, more than 70 GW of additional solar PV is deployed on average each year to 2030 across Latin America, Africa, Southeast Asia and the Middle East. Even with modest cuts, this will reduce fossil fuel-fired generation in these regions by about one-quarter in 2030 compared with the STEPS (Stated Policies Scenario).
Solar PV alone cannot get the world on track to meet its climate goals, but, more than any other clean technology, it can light up the way, IEA explains.
Image over the headline.- India’s largest floating solar power project in Kayamkulam, Kerala was built by Tata Power Solar on a 350-acre water body with an installed capacity of 101.6 Megawatt Peak. This project is the first one in the Floating Solar Photovoltaic (FSPV) through Power Purchase Agreement category. Image © Tata Power Solar.
NOTE FOR OUR READERS: This is a work derived by Eva González Fernández from IEA material and Eva González Fernández is solely liable and responsible for this derived work. The derived work is not endorsed by the IEA in any manner.
IEA (2023), World Energy Outlook 2023, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2023, License: CC BY 4.0 (report); CC BY NC SA 4.0 (Annex A)