trending Market Intelligence /marketintelligence/en/news-insights/trending/fETENTJGmy9sXDj8NgpTIw2 content esgSubNav
In This List

IEA: Energy transition unfolding too slowly to meet global climate goals


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

IEA: Energy transition unfolding too slowly to meet global climate goals

Despite some impressive advances for clean energy technologies and policies around the world, the global energy transition is unfolding too slowly to reach long-term climate goals, including those set out in the Paris Agreement on climate change, a June 6 report from the International Energy Agency, or IEA, asserted.

"As costs decline, we will need a sustained focus on all energy technologies to reach long-term climate targets," said IEA Executive Director Fatih Birol in a statement. "Some are progressing, but too few are on track, and this puts pressure on others. It is important to remember that speeding the rate of technological progress can help strengthen economies, boost energy security while also improving energy sustainability."

The report, Energy Technology Perspectives 2017, details three potential pathways for energy sector development through 2060, starting with a baseline scenario that includes national pledges under the Paris accord and represents a "significant shift from a historical 'business as usual' approach," but ultimately "falls short" of long-term climate targets. The report also maps out two more successful scenarios: one that limits the rise global temperature to 2 degrees Celsius, in which "decarbonized power is a backbone of the clean energy transformation," and another that holds the temperature increase to 1.75 degrees Celsius by 2100 as the entire energy sector, including transportation, becomes carbon neutral by 2060.

Of 26 technologies assessed in the report, only three are growing at a pace consistent with meeting the 2 degree target: electric vehicles; energy storage; and variable renewables, including both onshore wind and solar. "While presently representing only a small share of the total energy system, these technologies are rapidly scaling up and continue to strengthen their position as mainstream energy solutions," the report found.

But even such "on track" technologies have a heavy lift ahead. Energy storage, for instance, which reached 930 MW in 2016, not including pumped hydroelectric storage, according to the IEA, needs to add 20,000 MW by 2025. Bioenergy, geothermal, buildings, carbon capture and storage and coal-fired power, meanwhile, are among eight technologies singled out as "significantly off-track" and in need of "renewed policy focus."

While global coal generation is projected to have decreased in the past two years, new coal capacity is still being added, including 84,000 MW in 2015 alone, the IEA said. To meet the 2 degree goal, "unabated coal capacity additions would have to slow down, with subcritical technology deployment abandoned altogether," added the report.

Another 15 technologies assessed in the report are making progress — including nuclear power, natural gas generation, offshore wind and transport — but are not on trajectories to keep temperatures from crossing the 2 degree threshold. The Paris, France-based energy agency, which includes 29 nations with advanced economies among its membership, recommends that policymakers provide "clear and consistent" support for existing and new nuclear power in clean energy programs. The IEA also recommends that governments develop "a vision for a sustainable energy future," collaborate globally and locally, and craft policies to support clean energy technologies from fundamental research to commercial installations.