Global energy system to change significantly by 2030: IEA report

The report from the IEA, which advises industrialised countries, contrasts with the view of oil producer group the Organization of the Petroleum Exporting Countries, which sees oil demand rising long after 2030 and calls for trillions in new oil sector investment.

Mumbai: The share of fossil fuels in global energy supply, which has been stuck for decades at around 80 per cent, will decline to 73% by 2030, with global energy-related carbon dioxide (CO2) emissions peaking by 2025.

According to the World Energy Outlook 2023 brought out by the Paris-based International Energy Agency, major shifts that are taking place today are set to result in a considerably different global energy system by the end of this decade.

“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. 

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 WEO 2023-IEA report stated. 

“Governments, companies and investors need to get behind clean energy transitions rather than hindering them. There are immense benefits on offer, including new industrial opportunities and jobs, greater energy security, cleaner air, universal energy access and a safer climate for everyone. Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future, look weaker than ever,” Birol said in a statement.

According to the report, the most authoritative global source of energy analysis and projections, describes an energy system in 2030 in which clean technologies play a significantly greater role than today.

This includes almost 10 times as many electric cars on the road worldwide; solar PV generating more electricity than the entire US power system does currently; renewables’ share of the global electricity mix nearing 50 per cent, up from around 30 per cent 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.

“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,” the report pointed out.

The combination of growing momentum behind clean energy technologies and structural economic shifts around the world has major implications for fossil fuels, with peaks in global demand for coal, oil and natural gas all visible this decade – the first time this has happened in a WEO scenario based on today’s policy settings.

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.