Electricity will increasingly power the world’s economies in the 21st century, rivalling oil as the dominant energy carrier, according to a new report by the International Energy Agency. Actively managing this transformation is the only way to meet global energy security and climate goals economically, the report says.
The report, Energy Technology Perspectives (ETP 2014), offers a comprehensive, long-term analysis of trends in the energy sector and of the technologies that are essential to achieving an affordable, secure and low-carbon energy system. ETP 2014 also features the IEA’s annual progress report on global efforts to engineer a clean-energy transformation. It shows that while clean energy technology deployment in emerging economies has rallied over the past year – making up for declines in the industrialised world — the overall picture of progress remains bleak.
“Electricity is going to play a defining role in the first half of this century as the energy carrier that increasingly powers economic growth and development. While this offers many opportunities, it does not solve all our problems; indeed, it creates many new challenges,” said IEA Executive Director Maria van der Hoeven, who launched the report during the Fifth Clean Energy Ministerial meeting in Seoul.
“Growing use of coal globally is overshadowing progress in renewable energy deployment, and the emissions intensity of the electricity system has not changed in 20 years despite some progress in some regions. A radical change of course at the global level is long overdue,” she added.
The report finds that an additional USD 44 trillion in investment is needed to secure a clean-energy future by 2050, but this represents only a small portion of global GDP and is offset by over USD 115 trillion in fuel savings. The new estimate compares to USD 36 trillion in the previous ETP analysis, and the increase partly shows something the IEA has said for some time: “the longer we wait, the more expensive it becomes to transform our energy system.” Attracting capital investments will be key to financing the transition to a clean energy system, but higher capital costs (despite lower operating costs) of low-carbon technologies mean investors will need support to alleviate their exposure to a shift in risk profiles.
Several other key points emerge in ETP 2014’s analysis: