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India and the IEA enter new phase of closer collaboration

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Less than four years after the International Energy Agency welcomed India as an Association country, IEA members and the Government of India today agreed to enter into a Strategic Partnership, strengthening their collaboration across a range of vital areas including energy security and clean energy transitions. The signing of the Framework marked a major milestone in global energy governance that could lead to eventual IEA membership for India.

The IEA and India signed the Strategic Partnership Framework during a virtual ceremony, with senior representatives from India and IEA Members in attendance. Participants included Ambassador Hiroshi Oe of Japan, the Chair of the IEA Governing Board, and Ambassador Jawed Ashraf of India. The Framework was signed by Mr Sanjiv Nandan Sahai, Secretary of the Ministry of Power, representing India, and Dr Fatih Birol, IEA Executive Director, on behalf of the Agency’s members. 

“Today is a historic day. The signing of this agreement reaffirms and advances the invaluable relationship that IEA members and India have,” said Mr Sahai. “Under the framework of this newly formed alliance, we will establish with the IEA the key steps for enhancing energy security and substantive cooperation across the full spectrum of IEA activities. We hope this partnership leads to an extensive exchange of knowledge and can be a stepping stone towards India becoming a full member of the IEA.”

“India will have a critical role in shaping the world’s energy and climate future. As the leading global authority on clean energy transitions, the IEA is the perfect partner to support India as it expands and improves its energy system for the benefit of its 1.4 billion citizens,” said Dr Birol. “I believe this Strategic Partnership is the natural next step for India and the IEA that could eventually lead to full membership. We’re delighted to be further strengthening our work with India to help it pursue a secure and sustainable path forward, and look forward to working closely with the Government of India to develop and coordinate the contents of the Strategic Partnership.”

The Strategic Partnership Framework represents a new phase in the relationship between the IEA and India, the world’s third-largest energy consumer, making it the first IEA Association country to take a formal step to further advance ties with the Agency. A number of IEA members expressed their support for the big step forward. 

“This signing ceremony marks a milestone of deepening the successful cooperation between India and the IEA,” said Mr Anders Ygeman, Sweden’s Minister for Energy and Digital Development. “Together we can achieve necessary changes for a green, sustainable and inclusive energy transition globally. Sweden greatly values this deepened cooperation and I look forward continuing working with my Indian colleagues.” 

“My deepest congratulations on the signature of the Framework for a Strategic Partnership between the International Energy Agency and the Government of India,” said Mr Hiroshi Kajiyama, Japan’s Minister of Economy, Trade and Industry. “It is important to strengthen the collaborative relationship between the International Energy Agency and the Government of India in order to ensure world energy security and to expedite clean energy transitions, so we welcome the signing of this framework.” 

India joined the IEA Family as an Association country in 2017, an act marked by a ceremony in New Delhi with Mr Piyush Goyal, then Minister for Power, Coal, New and Renewable Energy and Mines; and Mr Dharmendra Pradhan, Minister for Petroleum and Natural Gas; and the IEA’s Dr Birol.

India is becoming increasingly influential in global energy trends. According to the IEA’s in-depth report on India’s energy policies, which was released in January 2020, the country’s demand for energy is set to grow rapidly in the coming decades, with electricity use set to increase particularly fast. The country’s reliance on fuel imports makes further improving energy security a key priority for the Indian economy.

“With India’s increasing involvement, the IEA is able to more fully represent global energy users and producers,” said Mr Angus Taylor, Australia’s Minister for Energy and Emissions Reduction. “I applaud the commitment demonstrated by the Government of India in taking significant steps, not only to shore up their own domestic security but to also identify ways in which they can contribute to global energy security.”

Italy also offered its congratulations to the IEA and India. “In a time when we face global key challenges, such as energy transition and the fight against climate change, we sincerely appreciate the strengthening and enhancing of the cooperation with India, a key partner for the IEA and for all of us members of the Agency,” said Mr Luigi Di Maio, Italy’s Minister of Foreign Affairs and International Cooperation. “As the current holder of the G20 Presidency and as partner of the UK in the COP26, Italy is committed to a sustainable, resilient and clean energy future, and I am sure that the Strategic Partnership with India will be a valuable asset in our common endeavour.” 

Today, the IEA and India cooperate on a wide-variety of topics, including the expansion of renewables, energy efficiency, the energy-environment nexus, oil stocks and emergency preparedness, data, investment and innovation. The IEA also regularly provides detailed analysis of India’s energy sector, such as a recent deep dive on decarbonising the iron and steel sector, and an upcoming World Energy Outlook special report on India. 

“Enhanced cooperation between India and the IEA will largely contribute to promoting development in various areas including global energy security, global energy governance and the use of sustainable energy resources,” said Mr Toshimitsu Motegi, Japan’s Minister of Foreign Affairs. “We look forward to the progress of the discussion between India and the IEA on the concrete cooperation. Japan will actively contribute to further enhancing the existing cooperative relations between India and the IEA.”  

“The agreement between the IEA and India to pursue a Strategic Partnership is a major step towards building a sustainable, secure and prosperous energy future globally. By joining forces even closer with India in addressing the energy and climate challenges of the future, we also tap into a great potential for innovation and sustainable growth for all partners involved,” said Mr Peter Altmaier, Germany’s Minister for Economic Affairs and Energy. 

“As one of the world’s largest energy consumers with the outlook for unparalleled growth, India’s addition to the IEA family will further reinforce the solid stature and significant influence of the IEA, while extending the reach of many aspects of its work, including on energy security, electricity access and natural gas markets,” said Mr Seamus O’Regan, Canada’s Minister of Natural Resources. “It will also serve to strengthen the agency’s reach in the context of its Clean Energy Transitions Programme.”

Starting in 2015, the IEA has been opening its doors to major emerging economies that are at the centre of the global conversation on energy. Since then, eight countries have joined the IEA’s Association programme: Brazil, China, India, Indonesia, Morocco, Singapore, South Africa and Thailand. Along with the IEA’s 30 members and the three countries formally seeking accession, this expanded IEA Family now represents 75% of global energy demand, up from 40% in 2015.

The IEA was founded in 1974 by industrialised countries – within the framework of the Organisation for Economic Co-operation and Development (OECD) – in response to the oil embargo. As a result, countries seeking to become members of the IEA must also be members of the OECD and hold 90 days of oil imports as commercial stocks. But over the years, the IEA’s mission has expanded substantially and today the agency is working with major economies around the world to enhance energy security and to help accelerate their clean energy transitions.

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Surging electricity demand is putting power systems under strain around the world

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Global electricity demand surged in 2021, creating strains in major markets, pushing prices to unprecedented levels and driving the power sector’s emissions to a record high. Electricity is central to modern life and clean electricity is pivotal to energy transitions, but in the absence of faster structural change in the sector, rising demand over the next three years could result in additional market volatility and continued high emissions, according an IEA report released today.

Driven by the rapid economic rebound, and more extreme weather conditions than in 2020, including a colder than average winter, last year’s 6% rise in global electricity demand was the largest in percentage terms since 2010 when the world was recovering from the global financial crisis. In absolute terms, last year’s increase of over 1 500 terawatt-hours was the largest ever, according to the January 2022 edition of the IEA’s semi-annual Electricity Market Report.

The steep increase in demand outstripped the ability of sources of electricity supply to keep pace in some major markets, with shortages of natural gas and coal leading to volatile prices, demand destruction and negative effects on power generators, retailers and end users, notably in China, Europe and India. Around half of last year’s global growth in electricity demand took place in China, where demand grew by an estimated 10%. China and India suffered from power cuts at certain points in the second half of the year because of coal shortages.

“Sharp spikes in electricity prices in recent times have been causing hardship for many households and businesses around the world and risk becoming a driver of social and political tensions,” said IEA Executive Director Fatih Birol. “Policy makers should be taking action now to soften the impacts on the most vulnerable and to address the underlying causes. Higher investment in low-carbon energy technologies including renewables, energy efficiency and nuclear power – alongside an expansion of robust and smart electricity grids – can help us get out of today’s difficulties.”

The IEA’s price index for major wholesale electricity markets almost doubled compared with 2020 and was up 64% from the 2016-2020 average. In Europe, average wholesale electricity prices in the fourth quarter of 2021 were more than four times their 2015-2020 average.  Besides Europe, there were also sharp price increases in Japan and India, while they were more moderate in the United States where gas supplies were less perturbed.

Electricity produced from renewable sources grew by 6% in 2021, but it was not enough to keep up with galloping demand. Coal-fired generation grew by 9%, serving more than half of the increase in demand and reaching a new all-time peak as high natural gas prices led to gas-to-coal switching. Gas-fired generation grew by 2%, while nuclear increased by 3.5%, almost reaching its 2019 levels. In total, carbon dioxide (CO2) emissions from power generation rose by 7%, also reaching a record high, after having declined the two previous years.

“Emissions from electricity need to decline by 55% by 2030 to meet our Net Zero Emissions by 2050 Scenario, but in the absence of major policy action from governments, those emissions are set to remain around the same level for the next three years,” said Dr Birol. “Not only does this highlight how far off track we currently are from a pathway to net zero emissions by 2050, but it also underscores the massive changes needed for the electricity sector to fulfil its critical role in decarbonising the broader energy system.”

For 2022-2024, the report anticipates electricity demand growing 2.7% a year on average, although the Covid-19 pandemic and high energy prices bring some uncertainty to this outlook. Renewables are set to grow by 8% per year on average, serving more than 90% of net demand growth during this period. We expect nuclear-based generation to grow by 1% annually during the same period.

As a consequence of slowing electricity demand growth and significant renewables additions, fossil fuel-based generation is expected to stagnate in the coming years, with coal-fired generation falling slightly as phase-outs and declining competitiveness in the United States and Europe are balanced by growth in markets like China and India. Gas-fired generation is seen growing by around 1% a year.

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Canada’s bold policies can underpin a successful energy transition

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Canada has embarked on an ambitious transformation of its energy system, and clear policy signals will be important to expand energy sector investments in clean and sustainable energy sources, according to a policy review by the International Energy Agency.

Since the IEA’s last in-depth review in 2015, Canada has made a series of international and domestic climate change commitments, notably setting a target to cut greenhouse gas emissions by 40-45% from 2005 levels by 2030 and a commitment to reach net zero emissions by 2050.

To support those climate and energy targets, governments in Canada have in recent years worked on a number of policy measures, including an ambitious carbon-pricing system, a clean fuels standard, a commitment to phase out unabated coal-fired electricity by 2030, nuclear plant extensions, methane regulations in the oil and gas sector, energy efficiency programmes and measures to decarbonise the transport sector.

“Canada has shown impressive leadership, both at home and abroad, on clean and equitable energy transitions,” said IEA Executive Director Fatih Birol, who is launching the report today with Jonathan Wilkinson, Canada’s Minister of Natural Resources. “Canada’s wealth of clean electricity and its innovative spirit can help drive a secure and affordable transformation of its energy system and help realise its ambitious goals. Equally important, Canada’s efforts to reduce emissions – of both carbon dioxide and methane – from its oil and gas production can help ensure its continued place as a reliable supplier of energy to the world.”

Canada’s profile as a major producer, consumer and exporter of energy presents both challenges and opportunities for reaching the country’s enhanced targets. Energy makes up 10% of gross domestic product and is a major source of capital investment, export revenue and jobs. Moreover, Canada’s highly decentralised system of government means that close coordination between federal, provincial and territorial governments is essential for a successful energy transition.

“This report acknowledges Canada’s ambitious efforts and historic investments to develop pathways to achieve net-zero emissions by 2050 and ensure a transition that aligns with our shared objective of limiting global warming to 1.5 degrees Celsius, “ said Minister Wilkinson. “These are pathways that make the most sense for our people, our economy and our country and will also yield technology, products and know-how that can be exported and applied around the world.”                              

The IEA finds that emissions intensity from Canada’s oil and gas production has declined in recent years, but the sector remains a major source of greenhouse gases, accounting for about a quarter of the country’s GHG emissions. Along with strong action to curb methane emissions, improving the rate of energy technology innovation will be essential for the deep decarbonisation that is needed in oil and gas production, as well as in the transport and industry sectors. Canada is actively advancing innovation in a number of key fields, including carbon capture, utilisation and storage; clean hydrogen; and small modular nuclear reactors, with a view to serving as a supplier of energy and climate solutions to the world. The IEA notes that further federal support for research, development and demonstration would help accelerate progress towards these goals.

The IEA is also recommending that Canada’s federal government promote a comprehensive energy efficiency strategy in consultation with provinces and territories that sets clear targets for energy efficiency in the buildings, industry and transport sectors

The IEA report highlights that Canada’s electricity supply is among the cleanest in the world, with over 80% of supply coming from non-emitting sources, thanks to the dominance of hydro and the important role of nuclear. To further support the expansion of clean power and electrification, the report encourages increased interconnections among provinces and territories to ensure balanced decarbonisation progress across the country.

The IEA commends Canada on its efforts to advance a people-centred approach to its clean energy transition, including initiatives to promote diversity and inclusion in clean energy sectors; programmes to increase access to clean energy in northern, remote and Indigenous communities; and actions to enable just transitions for coal workers and their communities.

“Canada has laid out a comprehensive set of policy measures and investments across sectors to meet its climate targets, including a strong clean energy component to its Covid-19 economic recovery efforts,” said Dr Birol. “I hope this report will help Canada navigate its path toward economy-wide emissions reductions and a net zero future.” 

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Iran to add 10GW to renewable energy capacity

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Iranian Energy Ministry and some of the country’s private contractors signed memorandums of understanding (MOU) on Sunday for cooperation in the construction of renewable power plants to generate 10,000 megawatts (10 gigawatts) of electricity across the country.

The signing ceremony was attended by senior energy officials including Energy Minister Ali-Akbar Mehrabian and Head of Renewable Energy and Energy Efficiency Organization (SATBA) Mahmoud Kamani, IRIB reported.

The MOUs were signed following the Energy Ministry’s public call for the contribution of private companies in a project for developing renewable power plants in the country.

According to SATBA, after the ministry’s public call, so far 153 requests for the generation of 90,000 megawatts (MW) have been submitted to the ministry by private companies.

Speaking in the signing ceremony, Energy Minister Ali-Akbar Mehrabian said: “When the private sector invests in this industry [the renewables], the government is obliged to return the equivalent of the investment plus its interests to the investor.”

Mehrabian noted that the government has allocated over 30 trillion rials (about $101 million) for the development of renewables in the budget bill for the next Iranian calendar year (begins on March 21), saying that it is an unprecedented budget in this area.

Further in the ceremony, SATBA Head Kamani mentioned some of the Energy Ministry’s plans for the development of the country’s renewable energy industry, saying: “Export of renewable energy is a goal that has been targeted by the government.”

“Constructing renewable power plants for the cryptocurrency miners is also being seriously considered,” he added.

Back in December 2021, Kamani had announced plans to create 10,000 MW capacity of new renewable power plants across the country within the next four years.

He had put the current capacity of the country’s renewable power plants at 905 MW, saying that such power plants account only for one percent of the country’s total power generation capacity.

“Currently, 30 percent of the world’s electricity needs are provided by renewable energy sources, and some countries have even declared 2030 as the final year of using fossil fuels,” he said.

“We are far behind the global standards in the development of renewable energy,” he regretted.

Referring to another program for the development of renewable energies in the domestic sector, Kamani noted that to encourage households for constructing such power plants the Energy Ministry has announced that it will buy their surplus generated electricity at a guaranteed price.

He further pointed to the indigenization of the knowledge for the construction of the equipment used in renewable power plants as another priority of the Energy Ministry and SATBA, saying: “Currently, the construction of solar panels and wind power plants is completely indigenized, and we must strengthen our producers to finally become able to build all the required equipment from start to finish, in this regard, of course, some enterprises have announced their readiness.”

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