Home » IEA report says clean energy transition “unstoppable,” but urges action & cooperation

IEA report says clean energy transition “unstoppable,” but urges action & cooperation

by Madaline Dunn

The International Energy Agency’s recently released World Energy Outlook 2023 shared optimistic forecasts for clean energy, alongside a warning that emissions are still too high to prevent temperatures from rising above the 1.5°C threshold.

In the report, the global energy watchdog urged that we need to go “much further and faster” and stressed that the necessity of collaboration has “never been higher.”

The publishing of the report comes just before COP28, where the energy transition will be a core focus of discussions, and commitments must be made to ramp up renewable energy capacity. 

Global energy reflections & optimistic projections

The global energy sector has faced a series of shocks in recent years, and the report highlighted that with high geopolitical tensions, markets are tense and volatile. 

However, when reflecting on the parallels between now and the oil shock that led to the founding of the International Energy Agency (IEA), Dr Fatih Birol, Executive Director of the IEA, said we are “better prepared than we were 50 years ago.”

But there’s no denying that the situation is challenging – to say the least. The report outlines that the crisis we face today is multidimensional, from fragile oil markets to the acute crisis in natural gas markets and the climate crisis. Subsequently, as the report notes, this requires solutions that are similarly “all-encompassing.” 

And there’s a big task ahead, one that requires that we “change the energy system itself,” while maintaining the affordable and secure provision of energy services. 

Nevertheless, Dr Birol highlighted that we already have the clean energy technologies, and momentum is building. What’s needed now, he said, is coordination and cooperation.

“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,” added the IEA Executive Director. 

The EV effect 

The report highlighted the significant rise in EVs in recent years, and the knock-on effect this has had on energy. 

The IEA pointed to figures that show that while back in 2020, one in 25 cars sold was electric, now, that figure stands at one in five.

It outlined that the “astounding rise” in electric vehicle (EV) sales is now having an impact on the demand for oil in road transport. 

The report shared that sales of gasoline and diesel cars, two/three-wheelers and trucks peaked in 2017, 2018 and 2019, respectively, while EVs are on track to account for 18 per cent of global car sales in 2023, with 14 million EV sales. 

The IEA also added that road transport will no longer be a source of oil demand growth by the end of the decade. 

Change in China 

Big change is also in store in China, according to the IEA. It noted that while China’s growth has had a significant role in shaping energy markets and the global environment, accounting for over 50 per cent of global energy demand growth and 85 per cent of the rise in energy sector CO2 emissions, the country’s economy is reaching an inflexion point. 

“In our scenarios, China’s GDP growth averages just under 4% per year to 2030,” the IEA said.

What does this mean? Well, the IEA says this will result in its total energy demand peaking around the middle of this decade. Alongside this, it also forecasts that the robust expansion of clean energy will put overall fossil fuel demand and emissions into decline.

Indeed, the report highlighted China as a “clean energy powerhouse,” accounting for around half of wind and solar additions and over half of global EV sales in 2022. 

Of course, as outlined, the impact of this economic shift in China could be huge, but this could be magnified further if growth were to slow to 3 per cent per year: “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.” 

“China has changed the energy world, but now China is changing,” said the IEA report.

However, the IEA forecasts China will remain the largest consumer of fossil fuels in 2050.

A warning against complacency 

The report wasn’t all optimism and positivity, however, and the IEA said that as things stand, demand for fossil fuels is set to remain “far too high” to keep within reach the Paris Agreement goal.

It highlighted that not only does this risk worsening climate impacts, but it also puts the security of the energy system at risk, highlighting that energy infrastructure was built for a “cooler, calmer climate” with fewer extreme weather events. 

“Bending the emissions curve onto a path consistent with 1.5 °C remains possible but very difficult,” it said. 

Here, again, the importance of collaboration was underlined: “Governments, companies and investors need to get behind clean energy transitions rather than hindering them,” said Dr Birol. 

Dr Birol added: “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.”

Further, the report recognised that while the end of the growth era for fossil fuels does not mean an end to fossil fuel investment, it undercuts the rationale for any increase in spending. 

Accelerating action & individualised pathways 

For the path ahead, the report said that “each country must find its own path,” and proposed a global strategy for getting the world on track by 2030.

This includes five pillars, which the IEA said can also provide “the basis for a successful COP28”:

  • Tripling global renewable capacity; 
  • Doubling the rate of energy efficiency improvements to 4 per cent per year;
  • Slashing methane emissions from fossil fuel operations by 75 per cent;
  • Innovative, large-scale financing mechanisms to triple clean energy investments in emerging and developing economies; and 
  • Measures to ensure an orderly decline in the use of fossil fuels – this includes an end to new approvals of unabated coal-fired power plants.

Of course, with COP28 just weeks away, the publishing of this report is timely and demonstrates both the potential of what can be achieved if countries unite and the consequences if they don’t. A lot is riding on the climate summit, and it remains to be seen whether it will result in agreements that move the dial on climate change globally. 

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