IEA’s outlook for energy

The International Energy Agency’s annual world energy outlook is fertile ground for those with agendas or, in the case of more than a few in the media, those playing the click bait game.

Thus “our” ABC chose to tell its viewers and listeners this week that the 2018 edition of the outlook, just published, shows that “renewable energy has surpassed fossil fuels worldwide as the main source of new electricity generation.”

Others use the agency’s work to push their point that global coal use has peaked, with one local website asserting “coal dumped as IEA turns to wind and solar to solve climate challenge.”

Now the IEA modelling – not predictions – at its core does three things: (a) extrapolate from today’s energy use, (b) try to figure what the supply situation will be if the world’s governments adhere to their promised decarbonizing programs (the “Paris agreement”) and (c) present the agency’s view of how energy can be provided to achieve the long-term (century’s end) global warming mitigation ambitions. The horizon for the models is 2040.

Only the middle scenario, from my perspective, is worth immediate attention – it will take another version of the “Paris agreement” (Paris 2.0, eh?) to produce government commitments for a larger abatement effort.

Just for electricity supply, the IEA says coal dominated in 2017 with 9,858 terawatt hours (38 per cent) followed by gas (5,855 TWh, 22 per cent), then hydro power (4,109 TWh, 16 per cent) and nuclear (2,637 TWh, 10 per cent). The darlings of the green brigade trailed by a long way – wind farms 1,085 TWh (four per cent) and all forms of solar power 446 TWh (just over two per cent).

Extrapolating from the policies governments now embrace, the IEA sees coal-burning power going up in terms of output at 2040 (to 10,355 TWh) but down in terms of share (26 per cent), gas-fuelled supply soaring (to 9,071 TWh, representing 24 per cent), hydro power at 6,179 TWh (15 per cent) and nuclear at 3,728 TWh (nine per cent).

It certainly sees wind and solar power rising strongly: to 4,690 TWh (12 per cent) in 2040 for the former and 4,061 TWh (10 per cent) for all forms of solar.

This outlook has all forms of fossil fuels (coal, gas and oil) meeting 50 per cent of 2040 generation production (versus 64 per cent now) and all forms of renewables meeting 41 per cent of output (versus 25 per cent now). Throw in nuclear and hydro power and this modelling has conventional generation delivering just under three-quarters of the world’s electricity needs two decades from now versus 90 per cent at present.

The renewables breakdown in this IEA scenario is 15 per cent hydro (from lots of new large dams with some questionable environmental effects), 14 per cent from bio-energy (mainly woodchips, a form of supply that has a fair few environmentalists less than chuffed), 12 per cent from wind turbines, nine per cent from solar photovoltaics and one per cent from geothermal.

The commentariat will point vigorously to foreshadowed new generation capacity development, activists because this data suits the public impression they strive to create and not a few in the media because they understand next to nothing about capacity factors.

What this particular scenario shows is that:

  • There will need to be almost 1,200 gigawatts of wind farm development between 2017 and 2040 to deliver an extra 3,605 TWh of supply
  • There will need to be investment in some 2,140 GW of solar photovoltaics to deliver an extra 3,404 TWh of electricity.

By comparison an additional 1,045 GW of gas plant will need to be built to provide an extra 3,216 TWh of power.

As well, the agency calculates that 2,238 GW of coal plant will provide 10,355 TWh of electricity in 2040 – a large portion of which, it seems safe to say, will be using new-ish technology.

Where the activist and media attention is mostly falling, naturally, is on the IEA’s “sustainable development scenario,” what’s needed, it says, to deliver a power supply mix attuned to high emissions abatement ambitions – “high” being a relative term; green radicals want to see fossil fuels cast in to the dustbin of history by 2040.

There’s another set of numbers in the IEA material that shouldn’t be ignored in this context. Looking at overall global energy demand in millions of tonnes of oil equivalent under current government policies, it sees coal use in 2040 at 3,809 mtoe (3,750 mtoe in 2017), oil at 4,894 mtoe (4,435 mtoe in 2017 – this would be the effect of electric cars and so forth), gas at 4,436 mtoe (up from 3,107 mtoe), nuclear at 971 mtoe (up from 688 mtoe) and all forms of renewables at 3,605 mtoe (compared with 1,992 mtoe last year).

The “death of coal” this is not, still less the demise of fossil fuels.

And, for reference, in its sustainable development scenario, the agency puts the 2040 overall energy mix at 1,597 mtoe for coal, 3,156 mtoe for oil and 3,433 mtoe for gas versus 1,293 mtoe for nuclear and 4,237 mtoe for all forms of renewables (of which more than a third would be bio-energy). Now, if your solar-powered calculator is on the blink, this represents a 56.5 per cent global market share for fossil fuels under the IEA’s sunniest scenario. You can read the Web coverage about the outlook until your eyes burn and you won’t find this point highlighted.

I’m also struck by the extra-ordinary investment required for pursuing the scenario horizons. The agency sees a path set by existing global government policies as costing a cumulative 60 trillion US dollars between 2018 and 2040 – and the more ambitious agenda as requiring “only” another $US8 trillion, 15 per cent higher.

Having written more than a few media statements in my 30-odd years at the public relations and issues management coalface, I find it a bit odd that this latter aspect wasn’t highlighted in the IEA’s statement this week.

Finally, buried in this avalanche of data, is at least one more salient point – the IEA’s modelling under its “best and fairest” scenario is for just over 36,800 terawatts hours of generation in 2040 compared with 40,430 TWh under the current government policies outlook; that represents the potential gain from a major, worldwide energy efficiency effort.

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