The International Energy Agency (IEA) hailed the prospect of a “historic turning point” emerging from the crisis caused by Russia’s invasion of Ukraine, with its flagship annual global forecast for the first time ever predicting demand peaks for fossil fuels based on current policy trajectories that have seen governments massively increase green ambitions.
The IEA’s latest World Energy Outlook (WEO) 2022 says while Russia has unleashed “a shock of unprecedented breadth and complexity”, it also has major potential to speed up the energy transition to renewables and other zero-carbon technologies.
The WEO’s Stated Policies Scenario – calculated on the basis of latest government plans that include a volley of measures to move nations away from fossil reliance – sees global clean energy investment hit more than $2 trillion a year by 2030, 50% higher than now.
The IEA flagged the 2022 Stated Policies Scenario as highly significant as, for the first time, it charts a course from existing policy positions to either a peak or plateau for all three fossil sources.
Under the scenario, coal use falls within a few years after a short-lived crisis bounce, fossil gas demand plateaus by the end of the decade and oil demand “levels off in the mid-2030s before ebbing slightly to mid-century. This means that total demand for fossil fuels declines steadily from the mid-2020s to 2050 by an annual average roughly equivalent to the lifetime output of a large oil field,” according to the WEO.
The IEA said: “Global fossil fuel use has grown alongside GDP since the start of the Industrial Revolution in the 18th century: putting this rise into reverse will be a pivotal moment in energy history. The share of fossil fuels in the global energy mix in the Stated Policies Scenario falls from around 80% to just above 60% by 2050.”
Wind and solar setting records
By contrast, renewables and nuclear power see “sustained gains” under the Stated Policies Scenario, which namechecks huge initiatives such as the US Inflation Reduction Act and the EU’s REPowerEU plan, as well as massive efforts underway in China to build a clean energy infrastructure.
Under the scenario, wind and solar “together set new records every year to 2030 and then continue robust annual growth to 2050”.
Solar is seen as by far the biggest contributor of power capacity to 2050 under all the IEA’s scenarios.
“Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come,” said IEA executive director Fatih Birol. “Even with today’s policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system.”
Still not enough for emissions breakthrough
Despite the massive green shift forecast by the WEO under its Stated Policies Scenario, it is not enough to secure adequate push-back against the impact of climate change, the IEA warned.
The scenario would see global CO2 emissions “fall back slowly from a high point of 37 billion tonnes per year to 32 billion tonnes by 2050. This would be associated with a rise of around 2.5°C in global average temperatures by 2100, far from enough to avoid severe climate change impacts.”
Getting to a 1.5°C world will require achievement of one of the WEO’s more ambitious, climate-focused scenarios – and an up-to $4 trillion investment level by 2030.