IEA launched its World Energy Outlook 2019, exploring a number of today’s issues that challenge the industry, as the dissonance amongst well-supplied oil markets and developing geopolitical tensions, the gap between the rapidly-increasing GHG emissions and the lack of stated policies to deal with those emissions, and the promise of “energy for all”, in comparison to the lack of electricity access for 850 million people in the globe.
This year’s report focuses more on the path towards decarbonization and sustainability to meet the climate targets, as well as discusses the efforts to meet the energy access and air quality goals while maintaining reliable and affordable energy measures.
IEA has set different WEO scenarios that present the different paths the world could follow in the following decades, to find the solution of moving from the current state to a better future.
Together, these scenarios seek to address a fundamental issue – how to get from where we are now to where we want to go
… IEA notes.
Accordingly, the scenarios are categorised as:
- Current Policies Scenario: The path that the world is now following. This scenario provides a clear picture of how the world will develop if the governments won’t take action. The energy demand increases by 1.3% a year to 2040, resulting in strains across all aspects of energy markets and a continued strong upward march in energy-related emissions.
- Stated Policies Scenario: This scenario was previously known as “New Policies Scenario”, and includes today’s targets in addition to existing measures. The scenario illustrates the consequences that may follow according to the current plans. This scenario sees a future where in 2040 hundreds of millions of people still go without access to electricity, where pollution-related premature deaths remain around today’s elevated levels, and where CO2 emissions would lock in severe impacts from climate change.
- Sustainable Development Scenario: This scenario shows what needs to be done to fully achieve climate and other energy goals that policy makers around the world have set themselves. This scenario is fully aligned with the Paris Agreement goals, and calls for a rapid and widespread change across all energy sectors.
Dr Fatih Birol, the IEA’s Executive Director comments that
What comes through with crystal clarity in this year’s World Energy Outlook is there is no single or simple solution to transforming global energy systems. Many technologies and fuels have a part to play across all sectors of the economy. For this to happen, we need strong leadership from policy makers, as governments hold the clearest responsibility to act and have the greatest scope to shape the future.
Despite the efforts, the momentum behind clean energy is not able to fully offset the impact of an expandign global economy and developing population; This means that the rising of the emissions although will slow down, it will not peak before 2040.
In addition, the shale output from the US will be higher than what was expected, changing the global markets, trade flows and security. Based on the Stated Policies Scenario, annual US production growth slows from the breakneck pace seen in recent years, but the United States still accounts for 85% of the increase in global oil production to 2030, and for 30% of the increase in gas. By 2025, total US shale output (oil and gas) overtakes total oil and gas production from Russia.
Dr Birol adds that the shale revolution represents the urgency on change in the energy system, with the aim of developing new technologies, addressing that “the effects have been striking, with US shale now acting as a strong counterweight to efforts to manage oil markets.”
Another important factor to focus on is the energy security. Specifically, energy security is of great importance for governments, as although the traditional dangers have been extinct, new ones are emerging, such as cybersecurity and extreme weather, which both require constant vigilance.
Also, the improvements seen in the energy efficiency sectors are the ones that drive the world towards the Sustainable Development Scenario.
Right now, efficiency improvements are slowing: the 1.2% rate in 2018 is around half the average seen since 2010 and remains far below the 3% rate that would be needed
… IEA highlights.
Concluding, IEA recommends that the world need to pay closer attention to the emissions that are “locked in” to existing systems. In the last 20 years, Asia accounted for the 90% of all coal-fired capacity built worldwide, and these plants potentially have long operational lifetimes ahead of them.
Consequently, 2019 WEO provides three options to reduce emissions from the existent global coal fleet: to retrofit plants with carbon capture, utilisation and storage or biomass co-firing equipment; to repurpose them to focus on providing system adequacy and flexibility; or to retire them earlier.
To learn more on IEA’s World Economic Outlook 2019 click here.
