By Brian Fortner Several energy sector developments in 2021 may have long-term impacts on the international goal to reach a net-zero carbon emissions level by 2050, according to the International Energy Agency’s Energy Efficiency 2021 report released in November. Although energy efficiency has returned to pre-pandemic levels, according to the Paris-based IEA, annual worldwide investments in clean energy technologies need to triple by 2030.
Front-loading energy efficiency methods and investments and reducing the dependence on fossil fuels over the next 10 years are crucial to slowing global warming to less than 2 C by 2050, the report notes. Global investment in energy efficiency rose by 10% in 2021, according to the IEA. However, rapid economic growth during the year increased global energy demand, causing power generation from coal to rise by 9% in 2021 to an all-time high of 10,350 terawatt-hours. This increase in coal-fired power production resulted from a rapid economic recovery, steep rises in natural gas prices, and the inability of low-carbon energy supplies to keep up with demand, according to the IEA.
Electricity generation emitted 34 Gt of carbon dioxide worldwide in 2020, or more than 40% of global emissions, and coal-fired power plants accounted for 70% of those emissions, the IEA says.
“Coal is the single largest source of global carbon emissions, and (2021’s) historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero,” said IEA executive director Fatih Birol during the official release event for the report.
Reversing climate change
Agreements made at the 26th annual United Nations Climate Change Conference in Glasgow, Scotland, in November as well as climate change programs outlined in the $1.2 trillion Infrastructure Investment and Jobs Act of 2021 passed by the U.S. Congress and signed into law by President Joe Biden have demonstrated that governments worldwide are more focused than ever on reversing climate change by decarbonizing their energy needs.
“COP26 has provided significant momentum for the necessary transformation of the global energy sector,” Birol said. “The countries that account for over 90% of the global economy made commitments to reduce their emissions to net zero by 2050 or thereafter.”
According to the IEA report, approved government energy-efficiency-related spending in the next two years will total $315 billion as of the end of October 2021. The largest expenditures come from European Union countries, which account for roughly 65% of this total, the report states. Most of the investments are centered on transportation-related spending at 55%, while buildings account for 30% and industry 10%. Other efficiency-related measures make up 5% of the promised spending, the report notes.
Electrification of transportation plays a central role in the net-zero emissions by 2050 scenario and will require new sales of internal combustion light vehicles to be phased out by 2035, according to the report. “The transport sector accounted for 25% of total final energy consumption in 2020, with emissions down 10%,” the report notes. “Oil comprises 90% of transport energy demand. Road transport makes up about 75% of transport demand and emissions.”
More than $170 billion of total government investment has been committed toward transportation-focused energy efficiency, according to the IEA report. About two-fifths of the total is being delegated to low-carbon and energy efficient vehicles and charging infrastructure, the report notes. Rail and urban transit projects make up just over half of transportation-related energy efficiency spending, according to the IEA.
In the United States, $7.5 billion has been earmarked in the recently enacted infrastructure act for zero- or low-emission buses and ferries and another $7.5 billion to construct a network of plug-in electric vehicle charging stations.
According to the IEA report, however, the electrification of rail systems offers more significant energy savings as it offsets other modes of transportation, such as airplanes and light vehicles, and is “the most energy-efficient and least carbon producing transport mode.” To meet the net-zero emission goal, the IEA states that electric rail would need to increase its worldwide market share from 43% today to 65% by 2030 and 96% by 2050.
Accelerating clean energy transition
According to Birol, the world needs to accelerate its transition to clean energy if climate change goals are to be met and 2021 was not a favorable one for energy efficiency. During the official release of the report in November, Birol addressed several disturbing trends in the energy sector as the world began to adjust to the effects of the pandemic, primarily high energy prices.
“It is not accurate to lay the responsibility of high energy prices at the door of clean energy policies,” Birol said. Rather, Birol believes the following events must be considered as reasons for the increase in worldwide energy prices: a strong economic rebound; significant droughts in China, India, Brazil, and the United States; energy supply outages that were 30% higher than historical averages; the lack of government policies to incentivize the use of clean energy; and the more recent withholding of supplies from oil- and gas-producing countries.
The global economy grew by about 6% in 2021, Birol said, which is the highest rate of growth in the past 50 years, and clean energy alternatives could not keep up with energy demand.
Reducing methane emissions
One of the more promising agreements that came out of COP26, according to Birol, was the Global Methane Pledge, in which more than 100 countries promised to reduce global methane emissions by 30% by 2030. Methane is the second-most prevalent greenhouse gas in the atmosphere behind CO2 and is the main component of natural gas.
“If the 30% global methane goal is achieved,” Birol said, “it will have the same impact on the global temperature rise as (if) all the cars of the world, all the (railways) of the world, all the planes in the world, and all the ships in the world turned to net-zero emissions.”
The worldwide goal of keeping rising average temperature below 2 C, according to the IEA, requires a 75% reduction in emissions of methane from fossil fuel operations by 2030. If the energy sector alone achieves a 75% reduction in methane emissions, worldwide methane emissions would be reduced by 25%, which is most of the way toward the 30% Global Methane Pledge goal, according to IEA chief energy economist Tim Gould.
Although government ambitions for cutting emissions rose to an unprecedented level at COP26, according to Birol, action and implementation are more important than commitments. As such, the IEA plans to develop the IEA Methane Tracker database by next month to measure methane emissions from oil, natural gas, and coal. The database will hold countries accountable for their pledges.
Decreasing coal usage
The IEA also plans to release a net-zero coal report in June with the strategy of decreasing unabated coal use in emerging economies. A promising sign toward the goal is the International Just Energy Transition Partnership signed at COP26 by the governments of South Africa, France, Germany, the United Kingdom, the United States, and the European Union. The group will provide South Africa with $8.5 billion of financing along with strategies to decarbonize the economy in South Africa, which produces roughly 90% of the coal on the African continent.
The Just Energy Transition Partnership could be a precursor to assisting emerging economies to seek clean energy alternatives to coal. “The fault line of reaching our global climate goals is to finance clean energy transitions in the emerging world,” Birol said.
The electrification of energy systems, which provides the bulk of the efforts to reduce CO2 emissions, will require more reliance on renewable generation, including solar and wind, as well as other low-carbon sources, such as nuclear power, according to the IEA. Many countries, developed and undeveloped, are interested in small modular reactors to reduce emissions, according to Birol. As such, the IEA plans to release a new report titled Nuclear Net Zero in May to track industry developments and ensure that nuclear energy generation can be ramped up safely.
In the United States, the new infrastructure act provides $3 billion to fund advanced nuclear demonstration projects, but even more significant is the $6 billion credit program to be administered by the Department of Energy to prevent the closing of existing nuclear facilities due to economic factors.
The IEA says energy efficiency is the key factor that enables growth in clean energy sources to outpace the growing demand for energy services. In the best-case scenario, the global economy grows by 40% by 2030 but uses 7% less energy and becomes one-third more energy efficient. To achieve this goal and ultimately slow the Earth’s warming to less than 2 C by 2050, the IEA says that “a massive and unprecedented transition toward greater energy efficiency in buildings, transport, and industry is needed.”