IEA: Demand For Oil, Gas And Coal to Peak by 2030

Paris, France - The International Energy Agency (IEA) has presented an update of its World Energy Outlook. The expansion of clean energy technologies has picked up significantly. Global demand for fossil fuels could peak by 2030. International cooperation will be crucial for further development and the achievement of climate protection goals.

According to the IEA's new World Energy Outlook 2023, the major changes taking place today will lead to a significantly different global energy system by the end of this decade. The boom in clean energy technologies such as solar, wind, electric mobility and heat pumps is changing the way everything is powered, from factories and vehicles to household appliances and heating systems. But more action is needed to limit global warming to 1.5 degrees and meet the climate target.

Transition to clean energy is happening worldwide and cannot be stopped

The latest edition of the World Energy Outlook (WEO) describes an energy system in 2030 in which clean technologies play a much larger role than they do today. This includes almost ten times as many electric cars on the roads worldwide, the PV systems installed worldwide generating more electricity than the entire US electricity system currently produces, and the share of renewables in the global electricity mix rising from 30 per cent today to close to 50 per cent by then. Heat pumps and other electric heating systems are outselling fossil fuel boilers worldwide. And three times as much investment going into new offshore wind projects than into new coal- and gas-fired power plants.

All these increases are based solely on the current political framework around the globe. If countries fully deliver on their national energy and climate pledges in a timely manner, progress in clean energy would accelerate even faster, the IEA says. However, the emerging boom in renewables will not be enough to reach the goal of limiting global warming to 1.5 degrees. More ambitious measures are needed for this, according to the IEA.

The combination of growing momentum behind clean energy technologies and structural economic changes around the world has significant implications for fossil fuels. According to IEA calculations, global demand for coal, oil and natural gas is expected to peak this decade. This is the first time this has happened in a WEO scenario based on the current policy framework. In this scenario, the share of fossil fuels in global energy supply, which has been around 80 per cent for decades, falls to 73 per cent by 2030, with global energy-related CO₂-emissions peak by 2025.

"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. Governments, companies and investors need to get behind clean energy transitions rather than hindering them", said IEA Executive Director Fatih Birol. "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", Birol added.

Global average temperature could rise by 2.4 degrees

In its latest report, the IEA assumes from today's perspective that demand for fossil fuels will remain far too high to limit the rise in global average temperature to 1.5 degrees.

This not only risks worsening climate impacts after a year of record-breaking heat, but also undermines the security of the energy system that was designed for a cooler world with less extreme weather events.

It remains possible, but very difficult, to bring the emissions curve onto a path consistent with 1.5 degrees. The costs of inaction could be enormous, the IEA warns. Despite the impressive growth of clean energy based on today's policy framework, global emissions would remain high enough to raise the global average temperature by about 2.4 degrees this century, well above the key threshold set in the Paris Agreement.

To get the world on track by 2030, the IEA proposes in its Outlook a global strategy consisting of five pillars. These are: Tripling renewable capacity and doubling the rate of energy efficiency improvements. In addition, the IEA recommends a 75 per cent reduction in methane emissions from fossil fuel operations and innovative, large-scale financing mechanisms to triple clean energy investments in emerging and developing countries. The fifth pillar is measures to ensure an orderly decline in fossil fuel use, including an end to an end to new approvals of unabated coal-fired power plants.

"In particular, the speed at which emissions decline will hinge in large part on our ability to finance sustainable solutions to meet rising energy demand from the world’s fast growing economies. This all points to the vital importance of redoubling collaboration and cooperation, not retreating from them", Birol concludes.

Source: IWR Online, 26 Oct 2023