The International Energy Agency (IEA) published its annual flagship report, ‘World Energy Outlook 2021’ (WEO-2021), which highlights opportunities, benefits, and risks of clean energy transitions. The publication aims to serve as an “essential guidebook” for the Glasgow Climate Change Conference (COP 26) and beyond to accelerate the transition towards a 1.5°C pathway.
The WEO-2021 relies on the Agency’s earlier report from May titled, ‘Net Zero by 2050: A Roadmap for the Global Energy Sector,’ which explains “how to transition to a net zero energy system by 2050 while ensuring stable and affordable energy supplies, providing universal energy access, and enabling robust economic growth” by exploring a ‘Net Zero Emissions by 2050 Scenario’ (NZE).
The WEO-2021 finds that a “new global energy economy is emerging, but the transformation still has a long way to go.” The IEA warns that that while “deployments of solar and wind go from strength to strength,” 2021 has been marked by the second largest annual increase in carbon dioxide (CO2) emissions in history, due to the world’s increasing consumption of coal and oil associated, in part, with the “rapid but uneven” recovery from COVID-19.
The WEO-2021 analyzes countries’ net-zero targets using the Announced Pledges Scenario (APS), which suggests that the world can “start to bend the global emissions curve down.” Under this scenario:
- The vast majority of capacity additions between now and 2030 come from low-emission sources, with annual additions of solar PV and wind approaching 500 gigawatts (GW) by 2030;
- Coal consumption in the power sector in 2030 is 20% below recent highs;
- Oil demand peaks around 2025, driven by rapid growth in electric vehicle sales and continued improvements in fuel efficiency; and
- Global energy demand plateaus post-2030 due to efficiency gains.
As a result, energy-related CO2 emissions fall by 40% over the period to 2050, with the electricity sector delivering the most reductions. If fully and timely implemented, countries’ cumulative net-zero pledges will hold the global average temperature rise in 2100 to around 2.1°C above preindustrial levels. This scenario, the report warns, still does not stabilize the temperature trend. The WEO-2021 points out that “today’s pledges cover less than 20% of the gap in emissions reductions that needs to be closed by 2030 to keep a 1.5°C path within reach.”
The report identifies four key solutions to close the gap with a 1.5°C path, noting that more than 40% of the actions needed are cost-effective:
- A “massive” additional push for clean electrification that requires, inter alia: a doubling of solar PV and wind deployment relative to the APS; a major expansion of other low-emission generation, including nuclear where acceptable; a rapid phase-out of coal; and a drive to expand electricity use for transport and heating;
- A “relentless” focus on energy efficiency, together with measures to temper energy service demand through materials efficiency and behavioral change, resulting in significant cost savings to consumers;
- A broad drive to cut methane emissions from fossil fuel operations; and
- A big boost to clean energy innovation.
The report further identifies finance as the “missing link” to accelerate clean energy deployment in developing countries. It indicates that nearly USD 4 trillion by 2030 is needed in clean energy project and infrastructure investments to get the world on track for 1.5°C, and calls for accelerating capital flows in support of energy transitions in developing economies.
The report warns that the “costs of inaction on climate are immense, and the energy sector is at risk,” and calls for “unambiguous direction” from COP 26 to make the 2020s the “decade of massive clean energy deployment.” [Publication: World Energy Outlook 2021] [Executive Summary] [Publication Landing Page] [IEA Press Release]