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World Is Moving From Coal and Oil to ‘Age of Electricity’ but Not Fast Enough: New IEA Report

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19 Oct, 2024

This post was originally published on Eco Watch

The International Energy Agency (IEA)’s latest World Energy Outlook (WEO) describes the global energy system in 2030 as one in which clean energy technologies play an ever-increasing role.

The report says the future of global energy will include nearly 10 times more electric cars worldwide, solar generating more electricity, low-emissions energy sources supplying more than half of global electricity by 2030 and three times more investment in new offshore wind than in gas– and coal-fired power plants.

“In previous World Energy Outlooks, the IEA made it clear that the future of the global energy system is electric – and now it is visible to everyone,” said Fatih Birol, IEA’s executive director, in a news release from IEA. “In energy history, we’ve witnessed the Age of Coal and the Age of Oil – and we’re now moving at speed into the Age of Electricity, which will define the global energy system going forward and increasingly be based on clean sources of electricity.”

Global demand for electricity is rising faster than expected, making it more difficult for countries to reduce their carbon emissions.

“With higher energy use, even fast renewables growth doesn’t translate to fast falls in carbon-dioxide emissions,” said Dave Jones, energy think tank Ember’s global insight director, as The New York Times reported.

The latest edition of the WEO looks at how advancing clean energy transitions, emerging technologies, changing market trends, evolving geopolitical uncertainties and increasing climate crisis impacts are changing the meaning of secure energy systems, the press release said.

The new report highlights that current geopolitical fragmentation and tensions are creating significant risks for energy security and global action to reduce greenhouse gas emissions.

“The report underlines the inextricable links between risks of energy security and climate change. In many areas of the world, extreme weather events, intensified by decades of high emissions, are already posing profound challenges for the secure and reliable operation of energy systems, including increasingly severe heatwaves, droughts, floods and storms,” IEA emphasized.

The report found that, based on current policy settings, low-emissions energy sources are poised to provide more than half of global electricity before 2030, with demand for oil, gas and coal still predicted to peak by the end of the decade.

“In the second half of this decade, the prospect of more ample – or even surplus – supplies of oil and natural gas, depending on how geopolitical tensions evolve, would move us into a very different energy world from the one we have experienced in recent years during the global energy crisis,” Birol said in the press release. “It implies downward pressure on prices, providing some relief for consumers that have been hit hard by price spikes. The breathing space from fuel price pressures can provide policymakers with room to focus on stepping up investments in clean energy transitions and removing inefficient fossil fuel subsidies. This means government policies and consumer choices will have huge consequences for the future of the energy sector and for tackling climate change.”

The world’s energy system will become even more electrified in the face of soaring demand. In the last decade, electricity use has increased at two times the rate of overall energy demand, with two-thirds of the increase coming from China.

In its report, the IEA made it clear that, in order for clean energy to keep growing at pace, much more investment in energy systems — particularly energy storage and electricity grids — will be needed.

“Today, for every dollar spent on renewable power, 60 cents are spent on grids and storage, highlighting how essential supporting infrastructure is not keeping pace with clean energy transitions. Secure decarbonisation of the electricity sector requires investment in grids and storage to increase even more quickly than clean generation, and the investment ratio to rebalance to 1:1. Many power systems are currently vulnerable to an increase in extreme weather events, putting a premium on efforts to bolster their resilience and digital security,” the press release said.

The report said that, although global carbon emissions are on track for an imminent peak, the absence of a steep decline afterward means we are on course for a 2.4 degrees Celsius rise in the global average temperature by 2100 — well above the goal of limiting global heating to 1.5 degrees Celsius set by the Paris Agreement.

“The report makes clear: there is a narrow but achievable pathway to 1.5°C, but governments must put clear fossil fuel transition plans in place now,” said Tracy Carty, global climate politics expert with Greenpeace International, in a press release from Greenpeace. “The action we take in the next two years will shape how much climate-driven destruction we can avoid over the next two decades, and far beyond. Implementing the COP28 agreement to transition away from fossil fuels, embedded in clear Nationally Determined Contributions in alignment with 1.5°C, will be crucial to ensure any progress.”

The post World Is Moving From Coal and Oil to ‘Age of Electricity’ but Not Fast Enough: New IEA Report appeared first on EcoWatch.

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From coal to clean: accelerating Asia's renewable energy transition

From coal to clean: accelerating Asia's renewable energy transition

With world leaders, climate and environmental scientists and business leaders having gathered in Baku for COP29 — the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) — we’ve been advocating that this transformation poses significant challenges while simultaneously providing opportunities for growth, resilience and innovation.

The role of coal and the need for change

Coal remains the largest contributor to climate change, generating 35% of global electricity as of 2023. The International Energy Agency’s (IEA) net-zero scenario calls for OECD countries to reduce coal’s share in power generation to 14% by 2030, with a complete global phase-out of unabated coal by 2040.

This underscores the fact that achieving global climate goals hinges on a viable energy transition strategy, particularly in Asia, where demand continues to surge.

The need for decarbonisation is stark: Asia’s carbon emissions now account for over half of the global total. The young age of Asia’s coal fleet — about 13 years on average — complicates the shift to renewables, with significant investments still tied up in coal plants. According to the World Economic Forum, policies that streamline and incentivise plant closures or conversions can accelerate the pace of transition.

Economic and environmental challenge

Transitioning to renewables in Asia requires not only technological shifts but also robust financial mechanisms.

We need financing models that incorporate public and private capital, with mechanisms like loans and grants making clean energy more accessible and competitive.

Countries like Vietnam face hurdles such as rigid power purchase agreements that protect coal plants from competition. Overcoming these barriers demands innovative financing, potentially reducing the cost of capital to make renewable projects more viable and less risky.

The move from coal to renewables also requires securing grid stability and resilience. The diversity of resources across Asia — from hydropower in Southeast Asia to solar in China — necessitates tailored strategies for integrating these resources into a cohesive and stable energy grid. GHD is actively involved in helping clients to navigate these complexities by advising on technical planning, decommissioning and the use of renewables like solar and wind.

Action steps to help Asia transform from coal to clean:

Develop robust financing models: Facilitate access to capital with a mix of loans, grants and public–private partnerships to make renewable energy more competitive and scalable.

Strengthen policy frameworks: Governments should adopt supportive policies to encourage investment, ease regulatory restrictions and provide incentives for renewable energy projects.

Invest in grid resilience and smart technology: Modernising grid infrastructure, including smart grids, is essential for integrating renewables and managing intermittent supply efficiently.

Encourage regional knowledge-sharing and collaboration: Cross-border partnerships can accelerate technology transfer, innovation and the development of best practices for transitioning from coal.

Support local workforces and communities: Implement training programs, workforce transition initiatives and local engagement strategies to ensure a fair and equitable transition for coal-dependent communities.
 

Based on this, there are three critical pillars for a successful transition: stable technical solutions, sustainable stakeholder engagement and a strong business case. Every project requires bespoke planning that integrates stakeholder interests, addresses environmental impacts and leverages technical expertise to ensure grid reliability.

A well-defined transition strategy that supports all stakeholders and secures financial backing is essential for a viable energy future.

Creating such a strategy involves evaluating the potential of each project and exploring repurposing opportunities, from battery storage to hydrogen production.

Looking forward: policy, financing and social impact

A successful transition will rely on supportive policies that facilitate investment and foster technological advancements. We need to understand the importance of a ‘just transition’ that balances environmental goals with economic equity, especially in coal-reliant communities.

Communities cannot be sidelined; local stakeholders need to benefit from new economic opportunities in renewables. At COP29 in Baku, GHD has been advocating for a holistic approach, including policy alignment, financial innovation and active community engagement.

The shift from coal to clean energy isn’t merely a goal — it’s an urgent necessity. Through collaboration, innovation and commitment to sustainable development, we can achieve a cleaner, greener future for Asia and beyond.

*Richard Fechner is GHD’s Enterprise Business Advisory Leader, leading the global business in providing strategy, commercial, economic, business case, logistics, policy, regulatory, asset management and transaction services. With over 30 years of experience, Richard has held senior roles in both the private and public sectors, contributing significantly to infrastructure development, investment and delivery across various sectors including ports, agriculture, energy, government and defence. He has advised on approximately AU$150 billion in infrastructure transactions and is a highly skilled infrastructure and business professional with expertise in strategic planning, business management and project engineering.

**Dr Tej Gidda is a distinguished expert in clean energy transitions and currently serves as the Global Leader for Future Energy at GHD. With over 20 years of industry experience, Dr Gidda holds a PhD in Environmental Engineering and is a registered Professional Engineer in Ontario. His work focuses on integrating clean energy technologies into existing systems and developing innovative strategies to overcome challenges related to reliability and affordability. Dr Gidda’s expertise spans hydrogen, renewable natural gas, traditional renewables, energy from waste, energy security and planning. He is also an adjunct professor at the University of Waterloo.

Top image caption: Pagudpud Wind Farm, Ilocos Norte, Philippines. Image courtesy of GHD.

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