London — The global transition to clean, low-carbon energy is gaining momentum with the impetus from the coronavirus pandemic this year likely to be "turning point" for climate change, International Energy Agency Executive Director Fatih Birol said Sept. 28.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
In addition to the global push by many governments to "build back greener" from the pandemic, renewable costs were falling fast and a wealth of cheap financing was available to fund clean energy projects, Birol told the FT Commodities Global Summit.
"I'm optimistic, there is a momentum, and this way may well be a turning year for energy and climate change [although[ governments are sitting in the driving seat," he said.
At the end of May, the IEA said it expected global energy spending this year to plunge in every major sector, from fossil fuels to renewables and efficiency, noting, however, that renewables investment had been more resilient during the crisis.
Investment in clean energies such as renewable power, battery storage, nuclear, and carbon capture and storage, would likely fall by around 11% this year and remain well below the levels needed to meet the Paris Agreement climate goals, the IEA said.
Net carbon commitments
But Birol said he was upbeat over the "plummeting" costs for solar and offshore wind projects, while government support for clean energy technologies such as carbon capture and storage and hydrogen was providing a "unique momentum" for the clean energy transition.
"This is a very grim year, but I'm more optimistic than ever for the clean transition," he said.
Birol cautioned, however, that half of the world's emission reductions in the future to meet the Paris climate targets would need to come from technologies that were not yet commercially viable.
He also noted that, despite most European oil majors committing to "net zero emissions" over the coming decades, the total carbon-free commitments so far represented less than 10% of global oil production.
"There is a huge amount of oil and gas companies which are not yet publicly committing themselves to CO2 emission reductions," he said.
Speaking in July, Birol, said he "would not be surprised" if global oil demand fully recovered to over 100 million b/d after the pandemic is brought under control.
S&P Global Platts Analytics sees global oil demand peaking in 2040 at around 120 million b/d before slipping to 116.5 million b/d in 2050 under a "Most likely" scenario.