Energy transition: fossil fuels to peak mid-decade, then renewables take over
Energy — di Maurizio Bongioanni
The energy transition is under way: renewables and efficiency to reduce electricity costs. The Iea publishes the World energy outlook 2022.
Energy transition: fossil fuels to peak mid-decade, then renewables take over
The energy transition is under way: renewables and efficiency to reduce electricity costs. The Iea publishes the World energy outlook 2022.
The global energy crisis triggered by Russia's invasion of Ukraine is causing profound and lasting changes that have the potential to accelerate the energy transition towards a more sustainable and secure system. This is the view of the International Energy Agency (IEA), which has published its new report "World energy outlook 2022".
For the first time, global demand for fossil fuels has reached its peak, across all the scenarios examined in the report. Furthermore, also according to the IEA, fossil fuels have contributed to rising inflation and increasing food insecurity around the world.
The energy transition is under way but must accelerate
The IEA explains that coal use will decline in the coming years, natural gas demand will plateau by the end of the decade, and oil demand will level off in the mid-2030s before falling. On the other side of the ledger, sales of electric vehicles will increase.
Total fossil fuel demand, in short, is already declining and will fall steadily from the mid-2020s to 2050. In this sense, the energy transition is already under way, but we can and must do better. The scenario just described is, in fact, still associated with a rise of around 2.5 degrees Celsius in average global temperatures by 2100: far from sufficient to avoid the severe impacts of climate change. If we want to meet climate targets, "there is still a need to bridge a wide gap between today's efforts and stabilising the rise in global temperatures at around 1.5 degrees," the agency writes.
World Energy Outlook 2022 is out now! 🚨
#WEO22 shows that the global energy crisis can be a historic turning point towards a cleaner & more secure future.
Explore the key findings ⬇️
#WEO22 shows that the global energy crisis can be a historic turning point towards a cleaner & more secure future.
Explore the key findings ⬇️
Wind, solar and energy efficiency cut costs
So, despite the IEA seeing a turning point mid-decade, there is still far too much greenwashing in the communications of fossil fuel industries: the report highlights that globally the transition is being fought with too little clean energy. According to the agency, greater investment in renewable sources would have helped moderate the impact of the crisis, and there is no doubt that wind, solar and energy efficiency represent the best way out of it.
It is a fact that in countries where higher shares of renewable energy are developed, lower electricity prices are seen at the same time. Consequently, the report explains, to achieve climate neutrality by 2050, investment in clean energy must more than triple, rising from the current 1.3 trillion dollars to around 4 trillion dollars by 2030.
Gas is not a transition fuel (and neither is nuclear)
The question the IEA poses is whether we are at the end of the age of gas. The agency also provides the answer: the rapid growth in natural gas demand will soon be over. As the report's data show, support for gas in developing economies has slowed, particularly in the global south, undermining gas's credentials as a transition fuel. In general, gas demand is being held back by rising prices, by the faster rollout of heat pumps and other efficiency measures, and by greater deployment of renewable energy.
And what about nuclear energy? The leading European energy agency says that where it already exists it can be a support to renewable energy, but where it does not (as in Italy) it cannot be an alternative or replace renewables themselves (as argued by many politicians, including the current Italian environment minister).
New fossil fuel projects will not solve the energy crisis
On new licensing of conventional oil and gas fields, the IEA is unequivocal: they do not contribute to decarbonisation. It would instead make more sense to capture a portion of the 260 billion cubic metres of gas that is wasted every year through flaring and methane leaks.
"Energy markets and policies have changed as a result of Russia's invasion of Ukraine, not just for the moment, but for decades to come," said Fatih Birol, executive director of the IEA. "Even with today's policy settings, the world's energy system is transforming in front of our eyes." All the more reason for governments globally to make this historic moment a definitive turning point towards a cleaner, more affordable and more secure energy system. The emergency is one more reason, not less, for policies to be consistent with this transition.