International Energy Agency: The energy crisis as a historic turning point

Dhe energy crisis has pushed climate protection into the background in many places. In Europe in particular, all stops are being pulled out to compensate for the loss of Russian natural gas supplies and to maintain security of supply for electricity and gas. For this purpose, decommissioned coal-fired power plants are being reactivated and the import of liquefied gas is being increased significantly because of the CO produced during production, processing and transport₂emissions is classified as more harmful to the climate than pipeline gas.

The International Energy Agency (IEA) wrote in its annual report published on Thursday that its member states had to release oil reserves to a large extent – and called the energy crisis a “shock of unprecedented scope and complexity”.

But in the crisis there are also opportunities. That is the message from IEA chief Fatih Birol. Recent measures taken by governments around the world promise to make the current crisis “a historic and definitive turning point towards a cleaner, more affordable and more secure energy system”. Oil and gas supplies are being increased or diversified in some cases, but above all structural change is being accelerated in many countries.

Investments in renewable energy increased

The IEA predicts that global investments in “clean” energy will increase sharply and reach more than two trillion dollars annually by 2030. “The energy markets and energy policy have changed as a result of Russia’s invasion of Ukraine, and not just temporarily, but for the coming decades,” says Birol.

The long-term optimism of the Paris-based energy agency is based not least on the large number of large government investment packages. In the USA, for example, it is mainly due to the Inflation Reduction Act that the annual addition of solar and wind energy capacities could increase by a factor of two and a half compared to today’s level.

In Europe, the IEA is again highlighting the RepowerEU package agreed in response to the Ukraine war, in addition to last year’s Fit-for-55 package. Both lead to faster renewable energy deployment and efficiency gains, meaning that the EU’s demand for gas and oil will fall by 20 percent and coal demand by 50 percent this decade.

Global Efforts

The increasing investments in low-carbon nuclear energy also find the approval of the energy agency. Japan’s green transformation program offers a major funding push for technologies such as nuclear power, low-emission hydrogen and ammonia. South Korea is also trying to increase the share of nuclear energy in its energy mix in addition to the share of renewable energies.

India, meanwhile, is making progress towards its goal of reaching 500 gigawatts of renewable energy capacity by 2030, which is expected to meet almost two-thirds of the country’s electricity demand. According to the IEA, China is also moving away from fossil fuels and coal and oil consumption will peak before the end of this decade.

As a result, the Energy Agency’s baseline scenario predicts, for the first time ever, a plateau in global demand for fossil fuels: coal use will decline in the coming years, natural gas use will peak in the late 2020s, and oil demand will decline from the mid-2020s the 2030s onwards. According to the IEA, the share of fossil fuels in the global energy mix will decrease from around 80 percent at present to just over 60 percent in 2050.

Far from the grade goals

At the same time, global CO2 emissions will drop from 37 to 32 gigatons per year. The Energy Agency warns that even more money can and must flow into the conversion of the energy system. If the Paris climate agreement is taken seriously, investments in “clean” sources would have to increase not only to more than two, but to more than four trillion dollars by 2030.

The world is currently “far” away from the goal of limiting global warming to well below 2 and preferably 1.5 degrees, according to the UN in this year’s “Emissions Gap Report”. The current commitments resulted in a temperature increase of 2.4 to 2.6 degrees by the end of the century.