Peak coal, electric vehicle take-off and green power growth - everything you need to know from the International Energy Agency's annual bumper report
Every year energy experts pore over the International Energy Agency's (IEA) World Energy Outlook hoping to glean some fresh insight on the future of their industry.
This year is no different, with the release of the bumper 661-page report this morning sparking a series of headline-grabbing predictions on everything from oil demand and electric car use to coal crises and solar surges.
BusinessGreen has taken the microscope to the report, and others' reporting of the report, to bring you the need-to-know insights from this major industry release.
1. Renewables are on the rise, but not fast enough
The IEA is optimistic about the growth of renewable energy in the coming decades, forecasting solar to grow from two per cent to 10 per cent of power generation by 2040, while hydro will contribute 15 per cent of total power by the same date. Meanwhile, wind farms will grow from four per cent of power generation to 12 per cent within 22 years, overtaking nuclear and becoming Europe's largest power source before 2030.
This green growth will mean renewables and coal will essentially swap places in the generation mix by 2040 according to the IEA, with the share of coal forecast to fall from 40 per cent today to just a quarter by 2040. In contrast, renewables are set to grow from a 25 per cent share today to 40 per cent by 2040.
However, energy-related carbon emissions will continue to grow, with the march towards green power not happening nearly fast enough to avert dangerous warming, the IEA warns. Carbon emissions from energy are set to rise 10 per cent to 36 gigatonnes in 2040, mostly driven by growth in oil and gas use.
Meanwhile, although wind and solar generation are set to grow at a fast clip, other low-carbon technologies - particularly progress on energy efficiency - won't reach their full potential without a "big push" from governments, the IEA said.
It is a sobering outlook. But it's also worth noting the agency has underestimated green energy growth in the past, and the march of low carbon infrastructure could well exceed its expectations once again. Whether or not it will be enough to deliver a 2C warming trajectory, let alone the 1.5C governments are meant to aspire to, is another matter.
2. India set for power surge
India is set to overtake the US as the world's second-largest power sector emitter, according to the IEA, as millions of people rapidly ramp up their electricity use. Power use will almost triple and emissions will rise by 80 per cent by 2040, today's paper predicts. A coming surge in the numbers of people using air conditioning units will have a particular impact, with two-thirds of India's households set to own air conditioning by 2040 under the report's central scenario - a 15-fold increase from today's levels.
Yet China will remain the largest source of power sector emissions throughout the period. And even with the massive surge in power demand, per capita India will remain one of the world's lowest electricity users, the IEA noted.
3. Electric cars hit the fast lane
Oil consumption for cars will hit a peak within the next seven years according to the IEA, as vehicles become more efficient, and falling costs and lengthening ranges propel significant growth in electric car use. The research agency said sales of EVs will rise by 30 per cent every year for the next five years under its base scenario, leading to 300 million electric cars being on the road by 2040.
However, while this will limit growth in carbon emissions from road transport to under 15 per cent over the period, emissions from other transport modes - such as shipping and aviation - could rise by more than 40 per cent, the IEA warned.
4. We only have a year's worth of 'spare' emissions
Existing energy infrastructure takes up 95 per cent of the world's carbon budget before anything else is even built, the IEA's executive director Fatih Birol told the Guardian ahead of the report's release. "We are eating up 95 per cent of the [carbon] budget, even if we don't do anything else. Which of course is impossible, not building any more trucks or power plants," Birol warned.
Relatively new coal plants in Asia are set to run for decades yet, while the world will continue to burn huge amounts of natural gas and oil for heating and transport, the IEA said. With 550 gigatonnes of carbon emissions tied up in existing power plants, vehicles and industrial sites, the world only has a 'spare' 40 gigatonnes of emissions before it blows the carbon budget for a 2C trajectory - equivalent to about one year of emissions in 2040.
5. Governments control 70 per cent of energy investment
Driving the scale of change needed to put the world on track for 2C or 1.5C of warming will therefore need radical government intervention, according to Birol.
A lot is written about the potential for the private sector to drive a low carbon transition, and businesses' role is critical. But the IEA warns that is governments that determine the direction and pace of any transition.
"Our analysis shows that over 70 per cent of global energy investments will be government-driven and as such the message is clear - the world's energy destiny lies with government decisions," said Birol. "Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centres, and expanding basic access to energy in Africa and elsewhere."
Under the IEA's Sustainable Development Scenario, which is aligned with a 2C trajectory, a "systematic preference for sustainable energy technologies" will need to be applied worldwide.
Birol also called for the rapid expansion of carbon capture and storage technologies, and in some cases for governments to intervene in the market to retire polluting capital stock early to give the world a chance of meeting its climate targets.
The message from the IEA is the same as that from the IPCC, green corporate leaders, and environmental campaigners. Averting catastrophic levels of climate change remains possible, but only with urgent, ambitious, and sustained action from governments, investors, and businesses everywhere.
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