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Effective global action critical to climate goals, despite peak oil demand on the horizon: IEA


Fossil fuel consumption peaks by 2030

Renewables account for 80% of new power plants

  • Author
  • Jared Anderson
  • Editor
  • Benjamin Morse
  • Commodity
  • Coal Electric Power Energy Transition Natural Gas Oil

The emergence of renewable and cleaner forms of energy globally is a reason to be hopeful about mitigating the impacts of climate change, but reaching greenhouse gas emissions reduction targets hinges on fair international cooperation and without it energy transition will be slower and more expensive, Fatih Birol, executive director of the International Energy Agency, said Sept. 21.

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One of the beauties of working at the IEA is "we have all the energy data at our fingertips," and when looking at this data one "extremely clear" trend is the energy transition is happening much faster than many people realize, Birol said during the Foreign Policy Magazine Energy Forum that was held in person in New York City and remotely.

For example, of all the new power plants built in the world this year, more than 80% are for renewable energy, mainly solar, with the rest consisting of all the other power generation fuels, he said.

Additionally, there has been a very strong increase in electric vehicle adoption. Two years ago, one out of every 25 cars sold in the world was electric and this year one out of every five cars sold is electric, led by China but also in Europe, the US and around the world, Birol said.

Consumers are choosing EVs and many other low-carbon technologies not necessarily for climate reasons, but for economic and energy security reasons, he said.

Another important element is the IEA's forecast that fossil fuel consumption is going to peak by 2030. So, with the growth of renewables in general, electrification of the transportation sector and the Chinese economy slowing, "we see first coal, followed by oil, followed by natural gas peaking before 2030 and then slowly declining," he said.

That assumes no new climate policies or regulations being enacted. If new measures come into place, that could accelerate the decline in fossil fuel consumption, Birol said.

"I wish the oil industry would not misjudge the energy market trends, but also what is discussed on the streets of the world about who is responsible for climate change and the impacts from climate change," he said, adding that with one or two more summers like the one just experienced it would be much more clear who is responsible for climate change and people will not forget those who wanted to find a solution.

Our problem is that oil, gas and coal are responsible for 80% of the emissions causing climate change, he said.

Global temperature increase

However, peak oil demand does not mean that emissions will decline immediately. "Despite the peak, we see a global temperature increase of about 2.4 degrees Celsius which is much higher than the 1.5 degree C increase targeted by the Paris climate agreement," Birol said.

Asked about hopes and concerns regarding climate change, Birol said he was hopeful about the global growth of renewable energy, which is not only being driven by climate concerns but economics as resources become cheaper and countries want to produce more energy at home.

Of course, the pace is not as "strong as I would like to see," but this is still good news, he said.

The concerning thing is that there are multiple routes to holding global temperatures to a 1.5-degree increase, with some using more solar, nuclear power and other resource combinations, but in the absence of effective and fair international cooperation, it will be much more costly, and there will be delays, he said.

Additionally, despite the current geopolitical tensions between the US and China, it will be critical for those countries to cooperate on climate issues if progress is to be made, Birol said.