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Clean Power IEA-renewables-turn

Published on May 15th, 2014 | by Giles Parkinson

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IEA Says World’s Electricity Supply Needs To Be Flipped From Fossil Fuels To Renewables

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May 15th, 2014 by  

Originally published on RenewEconomy.

As Tony Abbott prepares to wipe out the remaining institutions supporting the deployment of renewable energy technologies in Australia, the International Energy Association has urged countries to act quickly in the opposite direction, and seek to reverse the respective share of fossil fuels and renewable energy sources by 2050.

In its biannual Energy Technology Perspective report, the traditionally conservative IEA (of which Australia is a member) says the energy mix for the world’s electricity supply needs to be flipped within a few decades, from 68 per cent fossil fuels now to at least 65 per cent renewables by 2050.

IEA-renewables-turn

And it argues that action is needed now, or it will get more costly. Already, the delays in action in the last few years has increased the bill to $44 trillion from $36 trillion. While that sounds like a big number, the IEA says it is a small percentage of globa GDP over the next three decades, and would be more than offset by $115 trillion in fuel savings.

IEA-savings

Interestingly, the IEA is recommending countries adopt the very policies that the Abbott government is now trying to stop through the closure of the Clean Energy Finance Corp, the defunding of the Australian Renewable Energy Agency, and the likely reduction in the renewable energy target.

The IEA specifically says that support for policies such as loan guarantees, financing, and first of kind demonstration projects is needed to alleviate the risk for investors. “Without this support, these projects have the potential to be severely delayed or may not be developed,” it notes. These are exactly the sort of projects that would be supported by the CEFC and ARENA.

It says this is needed to address climate change. On a business as usual scenario, the world is heading towards catastrophic average global temperature increases of 6C. Even with the modest policies foreshadowed by government, it is still heading for around 4C.

“The longer we wait, the more expensive it becomes to transform our energy system,” IEA Executive Director Maria van der Hoeven said.

“A radical change of course at the global level is long overdue. Growing use of coal globally is overshadowing progress in renewable energy deployment, and the emissions intensity of the electricity system has not changed in 20 years despite some progress in some regions.”

In Australia, coal fired generation has actually fallen significantly in recent years, but all forecasts are now that this will reverse in coming years because of the policy making decisions by the Abbott government, including the repeal of the carbon price, the anticipated diluting of the renewable energy target, and the dumping of other clean energy supporting institutions and mechanisms.

It is, perhaps, instructive that the Abbott government policies are being guided by advisors – such as Maurice Newman and Dick Warburton, and the Institute of Public Affairs – who do not accept the science of climate change and see no need to act.

Or, in the case of Treasurer Joe Hockey, they see wind farms as “utterly offensive”, in the case of industry minister ian Macfarlane policy must be structured to extract “every molecule” of gas, and in the case of Queensland conservative premier Campbell Newman, the economy must be centred around the extraction of coal.

The IEA makes it clear that the latter is untenable, and even gas fired generation will need to be phased out – or cleaned up with carbon capture and storage technology – by 2025 as its role as a transitional fuel begins to wind down.

Its interesting to note that in this graph, the two biggest contributions to emissions reductions to meet the 2DS scenario are energy efficiency measures (33 per cent) and renewables (34 per cent). CCS (13 per cent) and nuclear (7 per cent) have relatively minor roles to play, and the IEA notes that the technology hurdles, and the costs, may impede the deployment of one or both.

IEA-emissions-reduction

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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • Matt

    The goal should be 100% renewable for electric generation an 65% for other energy. As for market signal we all know it is easy, and been agree by most economics GHS tax.

  • Rick Kargaard

    Actually, the goal of 65% of electrical generation from renewables by 2050 seems an easy to achieve goal. Fuel prices alone may be enough of an encouragement as costs of alternatives continue to drop.

  • Byron Meinerth

    As an American, it’s so disappointing to see that countries with similar economies and energy intensities, like Canada and Australia, are moving in exactly the wrong direction that we need to be. It’s unfortunate, because the two of them could serve as great models for the US of how to transition from a society that is overly carbon-intensive and automobile-focused.

    • Offgridmanpolktn

      As the American you must understand that for to many years we were the model, with our cheap energy and gas, and big homes and cars. But to achieve that we allowed the politicians to pump our taxes back to those same companies in subsidies, that still continue. If you will help us vote out the climate deniers and/or fossil fuel supporters it can happen. America will stay green and prosperous and other countries will do the same. Accept the responsibility of making change.

  • Russell

    To reach that renewable production needs to ramp up, but not incredibly so. It looks from the graph that about 20,000 TWh per year needs to be added by then. Thats equivalent to 2.3TW baseload, or 57.5GW baseload per year over 40 years.

    If this is all met by wind/solar then say 30GW each baseload equivalent is about 150GW for solar at 0.2 factor and 75GW for wind at 0.4 factor. So about 2-3* increase is needed in yearly production. Pretty sure thats possible with our current worldwide industrial capacity. We’d need more solar panel factories and perhaps some more silicon mines/processing?

    • Omega Centauri

      I think the main issue is willpower. Scaling renewables beyond the point of easy integration may not be a easy sell. Once you start adding in large doses of storage and demand response, it will likely start getting more expensive. Then all those whose only concern is “how much will it cost me today?” try to gum up the works.

      • Russell

        Thanks to Germany, “easy integration” consists of a lot renewables than it used to. If battery costs come down then it stays easy but yes storage may delay things.
        There are ways that may be prevented. People doing demand response may not be the ones paying for the renewables, in New Zealand where I live (and many places) the cost difference between on and off peak electricity is so high for residential that it will soon be worth us to put battery storage in our garage no matter what else goes on. Then the on/off peak prices will even out and more renewables can be added without increase integration costs.

        • Omega Centauri

          For enough people to respond to the price signals I think is the stickler. There are a lot of actions which have been known for decades to be very cost effective ( replacing incandescents with CFLs, adding insulation, choosing energy efficient appliances, yet a large fraction of people just won’t bother (or won’t believe it woul help)). I suspect storage will be like that too. A few tech guru’s will do the math and consider it a fun project. But the vast majority will pass.

          • Rick Kargaard

            Conservation of energy is a very effective way of reducing energy costs and carbon footprints. It is a good investment for consumers with rapid payback times. In the case of more efficient homes and businesses, education can help. Convincing the average consumer to drive a smaller efficient car, or to cut back on travel, is another matter.

        • globi

          If Germany were to install storage, it would primarily help German baseload power plants to keep running at full power anytime.
          It would be more sensible if Germany would shut down some of its baseload power plants than to install storage.

    • globi

      The world should invest in Wind, PV, build-out hydro-capacity (power not energy) and invest in transmission lines. Transmission lines are much cheaper than storage: http://kobra.bibliothek.uni-kassel.de/bitstream/urn:nbn:de:hebis:34-200604119596/1/DissVersion0502.pdf
      Also, the heating and hot water sector needs to be freed from fossil fuels and this adds a lot of additional flexibility to the grid (there’s no point in renewabling the grid and keep on heating shower-water with imported fossil fuels).
      Electric hot water heaters in France are currently charged by a surplus of nuclear power at night. In the future the world can do the same with a surplus of PV power during day time.

  • Shiggity

    Renewables will be in control by 2025-2030. I just can’t see a scenario where wind, solar, and batteries don’t keep getting cheaper every year. With fossil fuels getting more expensive and volatile every year.

    • Byron Meinerth

      I agree, but supply-side prices are not the only the factor when evaluating energy choices. Developing a better system that encourages full usage of these resources is necessary too. For example, roofs continue to be an exceptional place to install rooftop solar, but the return for generating more than you consume is quite low, hence the 90% capacity that people recommend for residential solar.

      Some fossil fuel prices will certainly become more volatile, but the development of N. American tar sands and shale oil could decrease volatility, which would be a negative for renewables.

      • Shiggity

        The problem with tar sands and shale oil is that they are locked into high prices, unless oil stays at ~100-120$ a barrel, said resources are not even worth developing. We’ve always known that oil was there, it’s only recently that the price of oil has warranted the exploration.

        • Rick Kargaard

          Actually Oil sands production costs are far below that. Even with capital costs Total new development costs are 50 dollars or less per barrel.
          Considering the growth in developing nations and the recovery of U.S. and european economies, it is difficult to imagine the price of oil going down substantially or for extended periods.
          It would likely require a major global recession or perhaps even depression.
          The priceof oil seems to be totally disassociated from the cost of production, and driven by demand.

          • Wayne Williamson

            Yeah, it is interesting that the price of oil seems to have nothing to do with the cost of production, and I would also add demand. Just read an article in USA Today that says the US actually is producing the amount of oil it is using, but the cost is not going down. Hummm, maybe something else is keeping the cost of oil high….

          • Rick Kargaard

            The U.S is not isolated and the world price for oil is a major factor in your prices even if you are not a net importer at the moment.. Canada is a major exporter but local refiners must pay a price similiar to other countries. Our gasoline prices are actually quite a bit higher than yours, due to taxes. Democracy in action

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