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IEA support Luxembourg’s ambitious energy transition goals

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Luxembourg is targeting a sharp reduction in emissions by 2030, but new measures are needed to boost investment in renewables and energy efficiency, new IEA report says.

The International Energy Agency released its latest in-depth review of Luxembourg’s energy policies today, welcoming the country’s ambitions to shift to a low-carbon economy.

Luxembourg has shown positive signs in its efforts to move ahead with its clean energy transition, according to the report. While the country has enjoyed robust economic and population growth, its energy demand and greenhouse gas emissions have declined for much of the past decade, until they started to rise again in 2016, due to increased fuel sales to trucks in transit. The share of renewables in its energy supply has doubled since 2008.

“The Luxembourg government is committed to the goals of the Paris Agreement and has adopted ambitious energy sector targets, including reducing its greenhouse gas emissions by as much as 55% by 2030,” said Dr Fatih Birol, the IEA’s Executive Director. “The IEA is ready to support the government’s efforts to achieve these goals, starting with the recommendations contained within this report.”  

The report notes that Luxembourg faces challenges in achieving its energy objectives. The country’s energy supply is dominated by fossil fuels, and carbon dioxide emissions are rising since 2016. This trend is driven by higher fuel consumption in the transport sector, mostly from fuel sales to international freight trucks and commuters.

“It is encouraging that the government has embraced an electric vehicle initiative with the intention of reducing greenhouse gas emissions and fuel imports”, Dr Birol said. The initiative is targeting the deployment of 800 public charging stations for electric vehicles by 2020. The aim is for 49% of all vehicles registered in Luxembourg and 100% of the national bus fleet to be electric by 2030. These goals are supported by subsidies for electric vehicles, major investments to increase the level and quality of electrified public transport, the introduction of free use of almost all forms of public transport in March 2020, and gradual increases in excise duties on diesel and gasoline. The report calls on the government to evaluate how much existing transport policies contribute to its energy sector targets and formulate a set of coherent measures to achieve a sustained reduction in fuel demand.

Luxembourg has the highest share of electricity imports among IEA member countries, with imports covering nearly 90% of electricity demand in 2018. Luxembourg expects its electricity demand to rise as a result of a growing population and economy and the increasing electrification of the transport and heat sectors.

The IEA report notes that Luxembourg is undertaking actions on several fronts to ensure a secure supply of electricity. The country is aiming to increase domestic electricity generation to cover one-third of national demand by 2030, mostly from solar PV and wind. Luxembourg is also actively cooperating with neighbouring countries on energy security and is planning to strengthen its electricity grid to support additional imports and domestic renewable generation. The report recommends that infrastructure plans and processes should be aligned with renewable energy deployment and should facilitate smart grid technologies such as demand‑side response, batteries and other energy storage options.

Luxembourg has generous support programmes for energy efficiency and renewable energy, two of the pillars of clean energy transitions. However, the IEA report finds that the country’s low taxes on energy represent a barrier to the investments needed in energy efficiency and renewables to meet the government’s targets. The report calls for the gradual introduction of carbon pricing, which if done wisely, could stimulate the behavioural changes and investments required for the transition to a low-carbon energy system. The government has announced a plan to introduce a carbon price in 2021. 

“I strongly believe that both policy and regulatory reforms can help Luxembourg achieve a cost-efficient, equitable and sustainable pathway to meeting its ambitious energy transition goals,” said Dr Birol.

Because of the exceptional situation resulting from the COVID-19 coronavirus epidemic, the IEA and the government of Luxembourg agreed to launch the report online rather than via a press conference.  

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IEA: take urgent action to cut methane emissions from oil and gas sector

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Methane emissions from the global oil and gas industry fell by an estimated 10% in 2020 as producers slashed output in response to the historic shock of the Covid-19 crisis, the International Energy Agency said today, warning that these emissions could rebound strongly without greater action by companies, policy makers and regulators.

Methane is a much more potent greenhouse gas than carbon dioxide (CO2) and makes a major contribution to global warming. According to the IEA’s 2021 update of its Methane Tracker, oil and gas operations worldwide emitted more than 70 million tonnes of methane into the atmosphere last year. This is broadly equivalent to the total energy-related CO2 emissions from the entire European Union.

The new IEA analysis indicates that a large part of the drop in methane emissions in 2020 occurred not because companies were taking more care to avoid methane leaks from their operations, but simply because they were producing less oil and gas. As such, there is clearly a risk that this downward trend will be reversed by an increase in production to fuel a rebound in global economic activity.

“The immediate task now for the oil and gas industry is to make sure that there is no resurgence in methane emissions, even as the world economy recovers, and that 2019 becomes their historical peak. There is no good reason to allow these harmful leaks to continue, and there is every reason for responsible operators to ensure that they are addressed,” said Dr Fatih Birol, the IEA Executive Director.

“Alongside ambitious efforts to decarbonise our economies, early action on methane emissions will be critical for avoiding the worst effects of climate change. There has never been a greater sense of urgency about this issue than there is today, said Dr Birol. “To help accelerate these efforts, the IEA is today releasing a ‘how-to’ guide that governments and regulators can use to bring down methane emissions from oil and gas operations.”

IEA analysis highlights that reducing methane emissions is very cost-effective for oil and gas companies. Unlike CO2, there is already a price for methane everywhere in the world – the price of natural gas. This means the costs of improving operations or making repairs to prevent leaks can often be paid for by the value of the additional gas that is brought to market.

“We believe that industry must act, visibly and quickly,” Dr Birol said. “But there is also a strong role for government policies; to incentivise early action by companies, push for transparency and improvements in performance, and support innovation in getting results.”

The new IEA report, Driving Down Methane Leaks from the Oil and Gas Industry: A Regulatory Roadmap and Toolkit, offers a step-by-step guide for anyone trying develop or to update regulation on methane. Its advice draws on analysis of how more than 50 countries, states or provinces – from the United States to Nigeria, from Iraq to China and Russia – have tackled methane emissions from a regulatory perspective.

“In this crucial year for climate action leading up to COP26 in Glasgow in November, this is the moment for governments to raise ambitions not only on CO2 but also on methane,” Dr Birol said. “One important avenue, especially for countries with large oil and gas sectors, will be to include commitments on methane in their new or updated pledges in advance of the COP meeting. This is also the moment for companies to put all their weight behind this effort.”

The case for action is not just environmental or reputational. There are increasing signs that consumers are starting to look carefully at the emissions profile of different sources of gas when making decisions on what to buy. A gas producer without a credible story on methane abatement is also one that is taking commercial risks.

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Priorities for improving diversity and inclusion in the energy sector

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Prominent energy figures from around the world took part in a virtual dialogue last month on ways to accelerate progress on diversity and inclusion in energy. The event was co-hosted by Dr Fatih Birol, the IEA Executive Director; Ambassador Madeleine Chenette, the Permanent Representative of Canada to the Organisation for Economic Co-operation and Development (OECD); and the Clean Energy, Education and Empowerment International Initiative (C3E International).

The C3E International Initiative, under the IEA Technology Collaboration Programme and the Clean Energy Ministerial, aims to enable greater gender diversity in clean energy professions, recognising that transitions to a clean energy future will need to harness all possible talent to succeed.

Participants from across the energy sector took part in the event on 2 December 2020 to share perspectives and insights on what really matters in the industry. Dr Birol emphasised that diversity and inclusion were priorities for his modernisation agenda for the IEA because “decision-making benefits from the strength of diverse perspectives.” He noted that the share of women in leadership positions at the IEA had grown from 16% in 2015 to 38% today. Dr Birol said he was “delighted that the virtual dialogue represented voices from across the IEA family, reflecting the ‘all fuels and all technologies’ approach of the Agency.”

Highlighting that women’s participation and representation in the energy sector is far below those in other comparable sectors, Ambassador Chenette set out the moral, political and strategic imperatives for accelerating progress. She emphasised that both high-level and personal leadership are critical for overcoming slow progress, and thanked Dr Birol for his leadership in emphasising the need to make economic recoveries from the Covid-19 crisis sustainable.

Empowering women in clean energy transitions is one way to help achieve sustainable recoveries, Ambassador Chenette said, calling for greater efforts to embrace the principle of “what gets meseaured, gets done.” She noted that “it is crucial that we all recognise the economic, environmental and social benefits that gender equality delivers.”

Elbia Gannoum, CEO of ABEEólica, the Brazilian wind energy association, said that “across the energy sector in Brazil, there is an urgency building – companies are searching for solutions on how to make the shift” to harness the benefits of diversity and inclusion. Due to the growing demand for resources and tools, Ms Gannoum announced the creation of the Energia da Transformação platform, which plans to boost inclusion and diversity through the Brazilian energy sector based on collaboration, knowledge sharing and raising awareness.

A data-driven approach is essential for accelerating progress across industry. Laura McGee, founder and CEO of Diversio, a Canada-based company that provides an intelligence platform to measure, track and improve diversity and inclusion, said that the “energy sector is in the middle of the pack compared to some sectors, and could achieve rapid progress by learning from other industries.” Data-driven diagnostics are critical for avoiding missteps and allocating resources to targeted pain points, she added.

Lyu Fang, a senior engineer at the Electrical Engineering Institute at the China Academy of Sciences, shared her personal journey from the start of her career in remote solar PV stations in China to eventually holding leadership positions in the country’s huge renewables industry. Today, Ms Fang is Secretary General for the PV Committee of the China Green Supply Chain Alliance and C3E International China Global Ambassador. She highlighted that China’s climate ambitions offer many growth opportunities in clean energy through “rising sun industries.” She said these should be harnessed to accelerate women’s participation and representation in energy.

Strengthening gender diversity in the energy industry requires unrelenting long-term efforts to boost inclusion. Joel Couse, Special Advisor to the IEA, highlighted that the energy industry faces challenges in finding and retaining talented staff in a competitive global market, including to seize the opportunities of clean energy transitions. On the supply side, boosting the number of women entering STEM programmes remains a priority for achieving gender-balanced recruitment. However, getting women into energy careers is not enough, he said, adding that the industry needs to be actively supporting women to progress past the experience hump before caring responsibilities limit their opportunities for certain types of operational jobs. A key challenge is shifting mind-sets and addressing harmful stereotypes about job roles and advancement opportunities that unnecessarily hold women and men back across the talent pipeline, Mr Couse said. Setting quantitative objectives and dates helps focus efforts to make progress.

Leading energy figures call for action

Mechthild Wörsdörfer, IEA Director of Sustainability, Technology and Outlooks who leads the Agency’s Gender Diversity Task Force, concluded the virtual dialogue, thanking the participants for driving change and reiterating that the IEA Gender Initiative is focussed on bringing data-driven solutions to the table.

In 2020, the IEA Gender Initiative started work on delivering the mandate set by Ministers from IEA Member Countries on equal opportunities in the energy sector. The Agency began by collecting better disaggregated data on gender and energy.

Strengthening collaboration is key, with the IEA and OECD working together to collect data on women in employment, entrepreneurship and decision‑making roles in the energy sector, and developing indicators on the gender of inventors of energy technologies, which will be published in 2021.

The initiative has determined that there is a lack of good and comparable data on gender trends in the energy sector, and also a strong need to improve methodologies, which is why the IEA accepted the role of Coordinator for C3E International’s knowledge and data collection work stream.

The IEA will also conduct a survey of members of the IEA Energy Business Council to develop a baseline on existing corporate practices. The findings and analysis from the survey will be shared in the coming months.

The Agency is also exploring how to integrate gender diversity into its regular analytical work, such as the World Energy Outlook, the measuring of energy efficiency, and through the Clean Energy Transitions Programme, which supports key partner countries in developing and implementing policies. This includes planning a policy package on implementing energy efficiency measures in India, which will impact a predominantly female workforce. The IEA is also prioritising new work on people-centred clean energy transitions, which will also include analysis on gender dimensions.

To share these learnings and insights, and to develop a mutual understanding of the evidence base and what works, the IEA will keep bringing together government, industry and civil society stakeholders to review data and analysis, and to identify priority actions.

Looking ahead, with the help of partners and governments within the IEA family and C3E International, the IEA Gender Initiative can help to mainstream diversity and inclusion in energy policy-making. The IEA Gender Initiative aims to develop a stronger understanding of gender balances throughout the energy sector and to shape the priorities for policy action in future decision-making. The initiative will deliver its first progress report in 2021.

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IRENA’s World Energy Transition Day Kick-Starts Crucial Assembly Meeting

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The International Renewable Energy Agency’s (IRENA) Eleventh Assembly started today (Monday) and takes place virtually setting the course for a critical year of global commitments to low-carbon development. With the postponed COP26 set to take place later this year, 2021 is seen as an important moment for countries to raise climate mitigation ambition including renewable energy deployment, to align economic recovery efforts with the goals of the Paris Agreement.

“The COVID-19 pandemic defined 2020,” said Francesco La Camera, IRENA Director-General. “However, as countries look to recover from the devastating impacts of the pandemic and build back in a way that is more resilient, just and sustainable, we can define this year as the moment we placed the energy transition at the heart of global policy and investment decision making.”

The opening day of the Assembly, marked as World Energy Transition Day, sets the direction for four days of high-level discussions on net-zero policies, national energy planning, renewable energy investment and the energy-healthcare nexus, from January 18-21. Close to 2000 high level attendees including Heads of State, Ministers, energy decision makers, multilateral organisations, international stakeholders, and private sector actors will engage in Assembly meetings under the overarching theme of ‘COVID19 – Energy Transition’.

United Nations Secretary General, António Guterres, told Ministers and global leaders at the Assembly: “The trillions of dollars needed for recovery from the pandemic must be simultaneously used to move our economies towards net-zero emissions. We must build a global coalition to achieve carbon neutrality by 2050. Renewable technologies are the first choice for decarbonization strategies.”

Teresa Ribera, Deputy Prime Minister of the Government of Spain and Minister of Ecological Transition and Demographic Challenge, is the President of the Assembly.

“We are all well aware of the pressing need to change gears towards a sustainable energy future: with over 70% of GHG emissions coming from this sector, the energy transition plays a key role in managing the global climate emergency,” said H.E. Teresa Ribera. “Developing countries, economies in transition and highly industrialised countries all have huge opportunities in the decarbonisation of their development pathways: energy access and security, sound economic growth, industry modernisation, job creation.

“To us all, IRENA has become a lighthouse in the energy revolution we need,” she added. “Promoting innovation and widespread adoption of renewables and energy efficiency technologies and encouraging Governments to accelerate the transition. Spain is proud to align with IRENA’s endeavours and I will be honoured to take the lead of its 11th Assembly in 2021.”

Assembly sessions on the 18th, 19th and 20th include a high-level panel on energy transformation for a sustainable post-COVID recovery, followed by four ministerial discussions covering the topics of national energy planning and implementation, scaling up of renewable energy financing, the pathway to carbon neutrality and the role of the energy transition in energising healthcare.

Additionally, conclusions from preliminary stakeholder meetings that took place on the 13th and 14th of January, including IRENA’s Legislators Forum, Public-Private Dialogue and the IRENA Youth Forum, will be reported back to the Assembly. The Assembly, which takes place at the start of Abu Dhabi Sustainability Week (ADSW), is being live-streamed on the IRENA website.

“IRENA’s global mandate offers us a unique opportunity to convene global leaders, promote knowledge sharing and create the partnerships needed to advance low-carbon development and realise the immediate and long-term benefits of the transition,” continued La Camera. “The Assembly is at the heart of these efforts.”

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