The clean energy transition is critical for global security and energy price stability, according to the International Energy Agency’s annual World Energy Outlook. Russia’s invasion of Ukraine caused a global energy crisis, quickening the clean energy transition.
“Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come,” said IEA Executive Director Fatih Birol, in a statement. “Even with today’s policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable, and more secure energy system.”
For the first time, the WEO scenario has the global demand for every fossil fuel at a peak or plateau. Under this scenario, coal use will decrease within the next few years. Natural gas demand plateaus at the end of the decade. The scenario also forecasts oil demand leveling off in the mid-2030s before ebbing a bit by mid-century due to increasing sales of electric vehicles. “This means that total demand for fossil fuels declines steadily from the mid-2020s to 2050 by an annual average roughly equivalent to the lifetime output of a large oil field,” according to the scenario.
From Fossil Fuels to Clean Energy
Fossil fuel use has grown globally alongside GDP since the Industrial Revolution began in the 18th century. WEO’s scenario suggests fossil fuels decrease in the global energy mix from 80 percent to just above 60 percent by 2050. Global carbon emissions also decrease slowly from 37 billion tons per year to 32 billion tons by 2050. Unfortunately, that would also correspond with an increase of 2.5 degrees C in global average temperatures by 2100, which is far away from what is needed to avoid the worst climate change impacts.
“Full achievement of all climate pledges would move the world towards safer ground, but there is still a large gap between today’s pledges and a stabilization of the rise in global temperatures around 1.5 degrees C,” according to the WEO.
If the current growth rate for solar PV, wind, EVs, and batteries continues, it would lead to a much quicker transformation than the scenario projects. Achieving that requires supportive government policies globally.
There is some good news.
The supply chains for critical technologies like batteries, solar PV, and electrolyzers are increasing at rates supporting a faster transformation. If all the announced plans for manufacturing solar PV happen, manufacturing capacity would be higher than the deployment levels in the scenario by around 75 percent. The potential manufacturing capacity for all announced projects of electrolyzers for hydrogen production is around 50 percent.
Driving the transformation the world needs requires stronger governmental policies. In the WEO scenario, clean energy investment is over $2 trillion by 2030. However, it needs to be more than $4 trillion by 2030. Stronger policies would also avoid the volatility we see happening due to the Russian invasion of Ukraine.
“Today’s report demonstrates that we don’t need LNG export facilities or any new fossil fuels to meet our energy needs and the solutions to the climate and energy crises are the same: clean energy,” said Sierra Club Senior Director of Energy Campaigns Kelly Sheehan. “Reliance on oil and gas globally keeps us tied to volatile energy prices and political instability around the world. Solar, wind, and battery storage technology are affordable, reliable, and more necessary than ever.”
Photo by Fré Sonneveld on Unsplash