The International Energy Agency’s (IEA) latest “World Energy Outlook” covers significant ground. The following are amongst the key drivers in our ability/inability to reach the climate goals set under the Paris Agreement:
• Natural gas demand has been growing fast, spurring investment, and consumption is now close to 2011 projections for a “Golden Age of Gas”.
• Europe’s success with offshore wind has sparked interest in China, the US and elsewhere.
• Solar PV (and some other renewables) are turning initial policy and financial support into large-scale deployment, drawing comparisons with the boom in US shale.
• However, energy efficiency improvements are faltering, with only 1.2% in 2018 (half that seen in 2010), and rising energy demand coupled with population growth, particularly in Asia and Africa, will be difficult to offset.
• Increasing demand from China, India and Indonesia (amongst others) saw global coal use rise for a second straight year – it remains the largest source of generated electricity in Asia and has considerable ‘staying power’ given the longevity of existing stock (2080GW existing, 170GW under construction).
• Existing coal-fired plants are just 12 years old on average in Asia’s developing economies, yet this could be offset by early retirements, repurposing and CCUS – in many advanced economies coal is steadily being squeezed out of the energy mix.
• Coal-to-gas switching can provide “quick wins” for global emissions reductions. Theoretically, up to 1.2Gt of CO2 could be avoided using existing infrastructure in the power sector. Doing so would bring down global power sector emissions by nearly 10%.
• Unless a higher price is put on CO2, commodity prices paid by utilities today mean that most of the coal-to-gas switching potential does not have an economic case (>$60/t CO2 required in emerging Asian markets).
In brief, (a) what happens in Asia will be critical and (b) Governments must take the lead, since the greatest capacity to shape our energy destiny lies with them.
Ref: ‘World Energy Outlook 2019’ at iea.org