A major effort to develop and deploy clean energy technologies worldwide is urgently needed to meet international energy and climate goals, particularly in order to reduce carbon emissions from areas beyond the power sector such as transport, buildings and industry, according to a new IEA report released today.
With global carbon emissions at unacceptably high levels, structural changes to the energy system are required to achieve the rapid and lasting decline in emissions called for by the world’s shared climate targets. The IEA’s Energy Technology Perspectives 2020 – the first core ETP report for three years following a revamp of the series – analyses more than 800 different technology options to assess what would need to happen to reach net-zero emissions by 2070 while ensuring a resilient and secure energy system.
It finds that transitioning just the power sector to clean energy would get the world only one-third of the way to net-zero emissions. Completing the journey will require devoting far more attention to the transport, industry and buildings sectors, which today account for about 55% of CO2 emissions from the energy system. Much greater use of electricity in these sectors – for powering electric vehicles, recycling metals, heating buildings and many other tasks – can make the single largest contribution to reaching net-zero emissions, according to the report, although many more technologies will be needed.
“Despite the difficulties caused by the Covid-19 crisis, several recent developments give us grounds for increasing optimism about the world’s ability to accelerate clean energy transitions and reach its energy and climate goals. Still, major issues remain. This new IEA report not only shows the scale of the challenge but also offers vital guidance for overcoming it,” said Dr Fatih Birol, the IEA’s Executive Director.
“Solar is leading renewables to new heights in markets across the globe, ultralow interest rates can help finance a growing number of clean energy projects, more governments and companies are throwing their weight behind these critical technologies, and all-important energy innovation may be about to take off,” Dr Birol said. “However, we need even more countries and businesses to get on board, we need to redouble efforts to bring energy access to all those who currently lack it, and we need to tackle emissions from the vast amounts of existing energy infrastructure in use worldwide that threaten to put our shared goals out of reach.”
Energy Technology Perspectives 2020 (ETP 2020) examines how to address the challenge of long-lasting energy assets already operating around the world – including inefficient coal power plants, steel mills and cement kilns, most of which were recently built in emerging Asian economies and could operate for decades to come. It finds that the power sector and heavy industry sectors together account for about 60% of emissions today from existing energy infrastructure. That share climbs to nearly 100% in 2050 if no action is taken to manage the existing assets’ emissions, underscoring the need for the rapid development of technologies such as hydrogen and carbon capture.
Ensuring that new clean energy technologies are available in time for key investment decisions will be critical. In heavy industries, for example, strategically timed investments could help avoid around 40% of cumulative emissions from existing infrastructure in these sectors. Accelerated innovation is crucial for this – and for scaling up the clean energy technologies needed across the energy system.
Hydrogen is expected to play a large and varied role in helping the world reach net-zero emissions by forming a bridge between the power sector and industries where the direct use of electricity would be challenging, such as steel and shipping. In the IEA’s Sustainable Development Scenario – a pathway for reaching international energy and climate goals – the global capacity of electrolysers, which produce hydrogen from water and electricity, expands to 3 300 gigawatts in 2070, from 0.2 gigawatts today. In 2070, these electrolysers consume twice the amount of electricity that China generates today. Carbon capture is also employed across a range of sectors in the Sustainable Development Scenario, including the production of synthetic fuels and some low-carbon hydrogen. And modern bioenergy directly replaces fossil fuels in areas like transport and offsets emissions indirectly through its combined use with carbon capture.
The blistering pace of technological transformation that would be necessary for the world to reach net-zero emissions by 2050 is explored in the report’s Faster Innovation Case. It finds that to meet the huge increase in demand for electricity, additions of renewable power capacity would need to average around four times the current annual record, which was reached in 2019.
Governments need to play an outsized role in accelerating clean energy transitions towards meeting international goals, according to ETP 2020. The report highlights core areas that policy makers need to make sure they address. And it notes that economic stimulus measures in response to the Covid-19 crisis offer a key opportunity to take urgent action that could boost the economy while supporting clean energy and climate goals.
UN chief calls for ‘urgent transition’ from fossil fuels to renewable energy
Building a global coalition for carbon neutrality by mid-century will be the UN’s “central objective”, the world body’s top official told a conference on climate action on Monday.
“All countries need credible mid-term goals and plans that are aligned with this objective”, Secretary-General António Guterres said, addressing the virtual COP26 Roundtable on Clean Power Transition. “To achieve net zero emissions by 2050, we need an urgent transition from fossil fuels to renewable energy”.
Energy for Africa
Painting a picture of some 789 million people across the developing world without access to electricity – three-quarters of whom live in sub-Saharan Africa – the top UN official called it “both an injustice and an impediment to sustainable development”.
He signaled “inclusivity and sustainability” as key to support African countries, while underscoring that all nations need to be able to provide access to clean and renewable energy that prevents “the dangerous heating of our planet”.
Mr. Guterres asked for a “strong commitment from all governments” to end fossil fuel subsidies, put a price on carbon, shift taxation from people to pollution, and end the construction of coal-fired power plants.
“And we need to see adequate international support so African economies and other developing countries’ economies can leapfrog polluting development and transition to a clean, sustainable energy pathway”, he added.
Adaptation ‘ a moral imperative’
Against this backdrop, Mr. Guterres repeated his appeal to developed nations to fulfill their annual pledge for $100 billion dollars to support mitigation and adaptation in developing countries.
Pointing to vulnerabilities faced by Africa – from prolonged droughts in the Sahel and Horn of Africa to devastating floods in the continent’s south – he underscored “the vital importance of adaptation” as “a moral imperative”.
The UN chief said that while only 20 per cent of climate finance is earmarked for it, adaptation requires “equal attention and investment”.
“The forthcoming climate adaptation summit on 25 January is an opportunity to generate momentum in this much neglected area”, he added.
Reversing a dangerous trend
Despite huge amounts of money that have been reserved for COVID-19 recovery and stimulus measures, the Secretary-General noted that “sustainable investments are still not being prioritized”.
He outlined the need for an annual six per cent decrease in energy production from fossil fuels through renewables, transition programmes, economic diversification plans, green bonds and other instruments to advance sustainability.
He reiterated the need to limit the global temperature rise to 1.5 degrees Celsius above pre-industrial levels, stating emissions needed to fall by 7.6 per cent every year between now and 2030.
However, he noted that “some countries are still going in the opposite direction. “We need to reverse this trend”, he said.
Aligning with Paris
He said all public and private financing should support the Paris Agreement and the 2030 Agenda for Sustainable Development with training, reskilling and providing new opportunities that are “just and inclusive”.
He noted that a sustainable economy means better infrastructure, a resilient future and millions of new jobs – especially for women and young people, maintaining that “we have the opportunity to transform our world”.
“But to achieve this we need global solidarity, just as we need it for a successful recovery from COVID-19”, the Secretary-General said, reminding everyone that “in a global crisis we protect ourselves best when we protect all”.
“We have the tools. Let us unlock them with political will”, concluded the UN chief.
‘Growing momentum’ to make 2021 the global action year for sustainable energy
In a bid of optimism for the new year, the UN Development Programme (UNDP) expressed confidence that clean energy would grow in 2021.
Despite that the world is not on track to meet climate objectives and achieve Sustainable Development Goal 7 (SDG7) for universal access to clean, affordable and reliable energy, Marcel Alers, UNDP Head of Energy, said that “clean energy solutions exist that can get us there”.
“There is growing momentum to make them political and investment priorities”, he added.
Fossil fuels used to be less expensive than clean energy but that is changing, according to Mr. Alers.
Renewables are becoming more affordable every year, and “some options are now cheaper than fossil fuels”, he said, pointing out that since 2010, the price of solar had decreased by 89 per cent.
Moreover, amidst an exceptionally challenging year, and despite suffering setbacks, the renewables sector has shown resilience.
“This fall in price, coupled with technological progress and the introduction of innovative business models, means we are now at a tipping point”, he said, urging for a large-scale clean energy investments from the public and private sectors.
Translating pledges to action
Throughout 2020, countries have pledged to build back better, greener and fairer.
“With support from UNDP’s Climate Promise, 115 countries committed to submitting enhanced Nationally Determined Contributions”, Mr. Alers said.
Among other things, he noted that high-emitting economies, such as China, Japan, South Korea, the United Kingdom and the European Union, had made net-zero commitments and that United States President-elect Joe Biden had vowed to rejoin the Paris Agreement.
“These pledges now need to be translated into action”, said the UNDP official. “Ambitious commitments are a strong signal and a necessary first step towards reaching net-zero emissions. We now need to build on them”.
Clean energy is also a win-win solution to recover from COVID-19 as it can improve healthcare for the world’s poorest while providing a reliable electricity supply – imperative for health centres to function.
“As COVID-19 vaccines – some needing to be stored at -70°C – get rolled out, powering a sustainable and reliable cold chain will be critical”, Mr. Alers reminded.
Furthermore, investing in renewables could create nearly three times as many jobs as investing in fossil fuels.
“As the world is rapidly urbanizing, energy efficiency in buildings, sustainable cooling and heating, smart urban planning and sustainable transport options…are key for the future of cities”, he maintained.
Looking to September
In September, for the first time in 40 years, the UN will host a High Level Dialogue on Energy for countries, businesses, civil society and international institutions to step up action on sustainable energy.
UN-Energy and UNDP Administrator Achim Steiner recently called for a reinforcement of global energy governance, saying “we know clean energy can both deliver universal energy access and contribute to tackling the climate crisis”.
Although phasing out fossil fuels and transitioning to green economies is a monumental task, Mr. Alers assured that “we are ready to rise to the challenge”.
Pioneering Solar Power Plant to Take off in Uzbekistan with World Bank Support
The World Bank Group, Abu Dhabi Future Energy Company PJSC (Masdar), Asian Development Bank (ADB) and the Government of Uzbekistan signed today loan and guarantee agreements to finance the first 100-megawatt solar photovoltaic power plant in the country, in support of its efforts to produce clean energy, strengthen the security of supply and combat climate change.
The International Finance Corporation (IFC) and ADB are providing up to $60 million in the financing of the project which will be the first large-scale, privately developed and operated renewable energy facility in Uzbekistan. The European Bank for Reconstruction and Development (EBRD) is providing an equity bridge loan to Masdar to fund the equity needs of the project. Meanwhile, the World Bank is providing a $5.1 million payment guarantee for the Government of Uzbekistan to backstop the payment obligations under the project along with its upstream support to create an enabling environment for renewable energy deployment in Uzbekistan.
The plant’s 300,000 photovoltaic panels occupying a 268-hectare plot of land 35 kilometers east of the city of Navoi are expected to start feeding power directly to the national electric network in 2021. It will produce 270 gigawatt hours per year of electricity from solar energy resources, enough to power more than 31,000 households, and prevent the release of 156,000 metric tons of greenhouse gases annually.
Thanks to the project, Uzbekistan, which generates 85 percent of its electricity in thermal power plants, will be able to reduce its dependency on natural gas and coal. The project will also help ramp up the use of renewable energy and contribute to electricity production that is projected to increase from 65,000 Gigawatt hours (GWh) in 2019 to 103,000 GWh by 2030 to meet rapidly growing demand across the country.
“The project will have an enormous effect, serving as a best practice example in Uzbekistan, opening new markets for private investment and helping accomplish the country’s goal of increasing the use of renewable energy,” said Wiebke Schloemer, IFC Director for Europe and Central Asia. “It will also help reduce the burden on public finances, which could be deployed into other critical sectors of Uzbekistan’s economy to support its recovery from the COVID-19 pandemic.”
The financing package to implement the project includes up to $20 million in senior loans from IFC’s own account, up to $20 million from the Canada-IFC Blended Climate Finance Program, plus up to $20 million from the ADB. IFC will also provide of up to $1 million in interest rate swaps. And the World Bank will issue a $5.1 million payment guarantee. It will be used to ensure that the National Electric Grid of Uzbekistan (NES) is capable of performing its obligations arising out of a power purchase agreement signed with Masdar and cover the risk of nonpayment for supplied electricity.
“I am pleased that the World Bank, together with IFC, is supporting Uzbekistan in greening its electricity generation through the first competitively-tendered public-private partnership in the country,” noted Lilia Burunciuc, World Bank Regional Director for Central Asia. “Our technical assistance, financing and guarantees will help the Government to grow the share of renewable energy generation from currently less than 0.2 percent to 25 percent by 2030 and attract private investments into the renewable energy sector. They will also facilitate the Government efforts in the energy sector reform, the integration of renewable energies into the grid, and the global climate change mitigation.”
The plant will be constructed and operated by the “Nur Navoi Solar” Foreign Enterprise, a limited liability company (the project company) owned by Masdar, a renewable energy company of the United Arab Emirates. In October 2019, Masdar won Uzbekistan’s first competitively-tendered solar power public-private partnership, which was structured with IFC’s advisory support under the WBG Scaling Solar Program, a one-stop shop that helps governments rapidly bring online privately funded solar projects at competitive tariffs. Uzbekistan was the first state outside of Africa to join the Program.
Masdar committed to supplying power for 25 years at just 2.679 US cents per kilowatt hour – the lowest tariff for solar energy in Central Asia to date. The project company will sell electricity to the NES at this fixed price until 2046.
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