Renewables are becoming more widespread on the energy market and will change the sector significantly in the coming years, the IEA analyzes. While the pressure on the markets is slowly easing, some factors in energy development are still quite uncertain.
More electric cars on the roads, more heat pumps in homes, more electricity from photovoltaics – according to the International Energy Agency (IEA), the world will be in a decidedly different position in terms of energy supply by the end of the decade than it is today. This was announced by the Paris-based organization when it published its energy outlook for this year. But the report not only looks at the electricity mix of the future, but also takes security and climate change into account. Key points:
Renewable energies are expanding
“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,” writes the IEA. In 2030, clean energies are expected to be significantly more represented in the electricity mix at almost 50 percent than they are today. They currently make up around 30 percent.
Specifically, the IEA predicts that there will then be around ten times as many electric cars on the road and heat pumps and other electric heating systems will be sold more frequently worldwide than boilers with fossil fuels. Photovoltaics will then generate more electricity than the entire US power system today. Investments in offshore wind projects alone are said to be three times higher than in new power plants that run on coal or gas.
According to the IEA, the increase in renewables is having an impact on fossil fuels, as are structural economic changes. For the first time, the energy outlook sees demand for coal, oil and natural gas reaching peaks this decade based on the current political framework. The highest level of energy-related CO2 emissions could have been emitted as early as 2025, with fossils only making up 73 percent of the global energy supply in 2030 – instead of 80 percent as has been the case for decades.
The 1.5 degree target can only be achieved through clear measures
But according to the IEA, the hunger for fossil fuels remains far too high to achieve the goal of limiting global warming to 1.5 degrees compared to pre-industrial times. The organization proposes to triple the global capacity of renewables, significantly increase the pace of energy efficiency improvements and reduce methane emissions from fossil fuels by three-quarters. Mechanisms would also need to be created to increase investment in clean energy in poorer countries. Ultimately, fossils would have to be used less.
The international community is aiming for the 1.5 degree target in order to avoid exceeding dangerous tipping points with irreversible consequences and to avert the most catastrophic consequences of climate change. However, the measures planned by the states so far are nowhere near ambitious enough. According to the United Nations, the earth is currently heading towards more than 2.5 degrees of warming.
Energy security remains under pressure
The threat of high global warming also poses risks for the energy sector, as the IEA writes. Because the energy systems were built for a colder world with less extreme weather. In general, the energy markets remain tense, even if the pressure has eased slightly.
“The risk of further impairment is omnipresent,” estimates the IEA. “Ongoing fighting in Ukraine more than a year after the Russian invasion is now accompanied by the risk of a protracted conflict in the Middle East.” However, according to the IEA, there could soon be relief on the gas market. Numerous new LNG projects from 2025 would significantly increase capacity, reduce prices and alleviate supply fears, although it could even lead to oversupply.
China as an influential factor
China’s economy is undergoing structural changes, the extent of which is not yet fully known, writes the IEA. The country’s energy demand could peak in the middle of the decade, while demand for fossils and fossil emissions are likely to fall – with consequences for the global energy sector.
Source: Stern
