IEA World Energy Outlook 2023-Focus on Affordability, Developing Nations To Achieve Targets

IEA World Energy Outlook 2023-Focus on Affordability, Developing Nations To Achieve targets

The International Energy Agency’s (IEA) Annual World Energy Outlook Report is out, and it does its best to paint an optimistic picture of the possibilities from energy demand and supply. Even as meeting the target of limiting global warming to 1.5°C from human activity looks increasingly difficult, which the report admits, it continues to provide scenarios where this might be possible.

It highlights how based even on today’s policy settings or ‘business as usual’, there are set to be almost 10 times as many electric cars on the road, with renewables nearing half of the global power mix.  The phenomenal rise of clean energy technologies such as solar, wind, electric cars and heat pumps is reshaping how we power everything from factories and vehicles to home appliances and heating systems.
The World Energy Outlook 2023 projects that solar PV could be generating more electricity than the entire US power system does currently by 2050; renewables’ share of the global electricity mix nearing 50%, up from around 30% today; heat pumps and other electric heating systems outselling fossil fuel boilers globally; and three times as much investment going into new offshore wind projects than into new coal- and gas-fired power plants.

Will Manufacturing Create Its Own Demand?

In making its case for clean energy from renewables, perhaps a lesson needs to be taken from the stickiness in fossil fuel demand and reluctance of governments to pull back harder. Money, and jobs already tied to fossil fuel infrastructure. As global PV manufacturing capacity goes up to 1200 GW as the World Energy Outlook predicts, it can be hoped that the huge investment in that capacity will create its own push for faster and more adoption of solar PV for instance.

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All of those increases are based only on the current policy settings of governments around the world. If countries deliver on their national energy and climate pledges on time and in full, clean energy progress would move even faster. However, even stronger measures would still be needed to keep alive the goal of limiting global warming to 1.5 °C.

Peaks in global demand for coal, oil and natural gas will all be visible this decade – the first time this has happened in a World Energy Outlook scenario based on today’s policy settings. In this scenario, the share of fossil fuels in global energy supply, which has been stuck for decades at around 80%, declines to 73% by 2030, with global energy-related carbon dioxide (CO2) emissions peaking 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,” said IEA Executive Director Fatih Birol.

As things stand, demand for fossil fuels is set to remain far too high to keep within reach the Paris Agreement goal of limiting the rise in average global temperatures to 1.5 °C. The risks are not only worsening climate impacts after a year of record-breaking heat, but also undermining the security of the energy system, which was built for a cooler world with less extreme weather events. Bending the emissions curve onto a path consistent with 1.5 °C remains possible but very difficult. But the costs of inaction could be enormous: despite the impressive clean energy growth based on today’s policy settings, global emissions would remain high enough to push up global average temperatures by around 2.4 °C this century, well above the key threshold set out in the Paris Agreement.

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The World Energy Outlook 2023 proposes a global strategy for getting the world on track by 2030 that consists of five key pillars, which can also provide the basis for a successful COP28 climate change conference. They are: tripling global renewable capacity; doubling the rate of energy efficiency improvements; slashing methane emissions from fossil fuel operations by 75%; 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, including an end to new approvals of unabated coal-fired power plants.

This year’s World Energy Outlook also explores the potential for stronger growth of solar PV this decade. Renewables are set to contribute 80% of new power generation capacity to 2030 under current policy settings, with solar alone accounting for more than half of this expansion. However, this scenario takes into account only a fraction of solar’s potential, according to the World Energy Outlook analysis. By the end of the decade, the world is set to have manufacturing capacity for more than 1 200 gigawatts (GW) of solar panels per year, but it is projected to actually deploy only 500 GW in 2030. If the world were to reach deployment of 800 GW of new solar PV capacity by the end of the decade, it would lead to a further 20% reduction in coal-fired power generation in China in 2030 compared with a scenario based on today’s policy settings. Electricity generation from coal and natural gas across Latin America, Africa, Southeast Asia and the Middle East would be a quarter lower.

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