The IEA’s latest edition of its ‘World Energy Outlook’ report[i] has noted an acceleration in the transition to cleaner energy sources, largely in response to price rises and the desire for energy security in the wake of Russia’s invasion of Ukraine. Notably, for the first time, the research finds that global demand for each fossil fuel shows a peak or plateau across all WEO (World Energy Outlook) scenarios, with Russian exports, in particular, falling significantly.
"Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come. Even with today’s policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system.”"[ii] – Fatih Birol, IEA Executive Director
In its forecasts, the IEA ran several scenarios, the most notable collection of which utilised current government policies and measures to form its Stated Policies Scenarios or STEPS. Using this data, STEPS suggests that by 2030 the share of fossil fuels in the global energy mix will fall below 75% and to just above 60% by 2050, having been sat at or above 80% for decades prior. A high point for global energy-related CO2 emissions is reached in 2025, at 37 billion tonnes (Gt) per year, before these decline to 32 Gt annually by 2050. The IEA noted that this would be associated with a rise of around 2.5 °C in global average temperatures by 2100, stating that whilst a better projection than a few years ago, the reduction in CO2 emissions to 2050 will not be enough to avoid severe impacts from a changing climate[iii].
Source: IEA
The study finds that policy changes are driving an energy transition, whereby the IEA expects annual clean energy investment to surpass $2 trillion by 2030, a rise of more than 50% from today. It forecasts boosts to solar and wind capacity additions in the United States and predicts that clean energy targets in China will lead to its coal and oil consumption peaking before the end of this decade. In addition, the EU’s move away from Russian gas dependence will lead to faster deployment of renewables and efficiency improvements, reducing natural gas and oil demand by 20% this decade and coal demand by 50%.
Edie.net quoted Fatih Birol, IEA Executive Director, as saying: “The environmental case for clean energy needed no reinforcement, but the economic arguments in favour of cost-competitive and affordable clean technologies are now stronger, and, so too, is the energy security case”[iv]
The study noted the commitment of over $500 billion by governments (mainly in advanced economies) towards shielding consumers from the immediate impacts of spiralling energy prices. This has largely been spent on short-term measures, such as securing alternative fuel supplies, increasing fossil fuel usage, and extending the lifetimes of nuclear power plants. Yet, it notes there has been a failure to implement demand-side measures, where the IEA argues greater efficiency is an essential part of the short- and longer-term response. It argues that “In the most affected regions, higher shares of renewables were correlated with lower electricity prices, and more efficient homes and electrified heat have provided an important buffer for some – but far from enough – consumers”[v].
At the same time that IEA calls for clean energy and increased efficiency, a study by PowerMarket has found that UK businesses are currently missing out on £12 billion in on-site solar energy savings[vi]. The company’s Solar Feasibility study analysed the 30 largest science parks in the UK, home to countless start-ups and SMEs. They found that these parks could save around £65m annually on energy costs by making 5% of the suitable roof space available for solar installations. If this were then replicated across 5% of the UK’s commercial building estate businesses would collectively save around £12.6bn annually on energy costs[vii]. Solar is on the radar of many; 2021 saw the largest growth in UK solar capacity in six years, with Solar Energy UK reporting additions of 730MW of new solar capacity, a 36% increase on 2020 levels. In total, solar PV capacity in the UK sat at 14.6GW last year, up 5.3% compared to 2020 levels[viii]. Given the energy supply pressures in 2022, it is likely that we will see a substantial increase in solar capacity this year too.
PowerMarket suggests that UK businesses evaluate rooftop space at offices, data centres and warehouses in order to see if energy cost savings could be delivered, as well as helping to reduce their environmental impact by utilising a renewable energy source.
[i] World Energy Outlook 2022 – Analysis - IEA
[ii] World Energy Outlook 2022 shows the global energy crisis can be a historic turning point towards a cleaner and more secure future - News - IEA
[iii] Executive summary – World Energy Outlook 2022 – Analysis - IEA
[iv] IEA: Power sector emissions set to peak in 2025 as price crisis sparks investments in renewables, nuclear and efficiency - edie
[v] https://www.iea.org/reports/world-energy-outlook-2022/executive-summary
[vi] Businesses missing out on £12bn onsite solar energy savings - edie
[vii] Ibid
[viii] UK solar market shows strongest growth in six years - edie
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
