IEA urges ‘radical change’ in electricity investment patterns
A new International Energy Agency (IEA) report estimates that an additional $44-trillion in electricity investment will be required to ensure a “sustainable energy system” by 2050, as represented by its 2 ˚C Scenario (2DS). The scenario itself is aligned with the Intergovernmental Panel on Climate Change analysis on the role of the energy sector in limiting the global rise in temperatures to no more than above 2 ˚C above preindustrial levels.
But the Energy Technology Perspectives 2014 (ETP 2014) report also stresses that the additional investment will be offset by fuel savings of over $115-trillion, representing a net saving of $71-trillion.
Electricity, the report adds, will rival oil as the world’s dominant energy carrier during the twenty-first century. However, the shift to electricity will have to be actively managed to ensure that energy-security and climate goals are met economically.
Releasing the report during the Fifth Clean Energy Ministerial in South Korea on Monday, IEA executive director Maria van der Hoeven called for a “radical change of course”, noting that the emissions intensity of the electricity system had not changed in two decades.
“Growing use of coal globally is overshadowing progress in renewable-energy deployment, and the emissions intensity of the electricity system has not changed in 20 years despite some progress in some regions,” she warned.
The report shows that electricity’s overall share of total energy demand has roughly doubled over the last 40 years and that electricity is set to grow faster than any other energy source to 2050. But electricity production uses 40% of all primary energy and produces an equal share of energy-related carbon dioxide emissions.
ETP 2014 insists that cost-effective, practical solutions are already available to increase efficiency, moderate electricity demand and decarbonise almost all power generation by 2050, but says the “longer we wait, the more expensive it becomes to transform our energy system”.
To facilitate the transition under the 2DS, investors will require support to pursue low-carbon technologies and there will also have to be active management to align the growth in variable renewable energy (VRE) with energy demand patterns.
Electricity storage could also play multiple roles in an integrated system, but the IEA argues that electricity storage alone “is not an indispensable game changer”.
Natural gas, meanwhile, could play the “dual role” of replacing coal in the short term and supporting the integration of VRE. But in the medium- to longer-term, gas should be viewed as a transitional fuel rather than a low-carbon solution, unless coupled with carbon capture and storage (CCS). The report is equally unequivocal in its warning that, in the absence of CCS, the current rise in coal use is incompatible with climate change objectives.
However, it acknowledges that the energy goals of emerging economies could be different from those of developed countries and that differing approaches may be required.
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