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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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Hydrogen in North-Western Europe: A vision towards 2030

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North-West Europe has a well-developed hydrogen industry that could be at the edge of an unprecedented transformation should governments keep raising their ambitions for reducing greenhouse gas emissions, according to a new joint report by the International Energy Agency (IEA) and the Clingendael International Energy Programme (CIEP). 

The report, Hydrogen in North-Western Europe: A vision towards 2030, explores hydrogen developments, policies and potential for collaboration in the region. It was commissioned to inform discussions among governments from North-West Europe about the potential development of a regional hydrogen market. This intergovernmental dialogue was established at the Clean Energy Ministerial Hydrogen Initiative in 2020.

The report finds that the current policy landscape provides some momentum for the transformation of the hydrogen industry in North-West Europe towards 2030, but that it is insufficient to fully tap into the region’s potential to develop a large-scale low-carbon hydrogen value chain. More ambitious policies in line with the targets defined by the EU Green Deal or the UK Climate Change Act would drive a faster transformation.

If such a supportive policy framework were to be adopted, hydrogen demand in the region could grow by a third and low-carbon hydrogen could meet more than half of dedicated production, up from about 10% today, according to the report.

North-West European countries have already made significant progress developing their vision for the role hydrogen should play in their long-term energy strategies. These countries now face the challenge of moving beyond national discussions to establish a regional dialogue, an indispensable condition to develop the fully integrated hydrogen market the region needs. 

With the aim of informing this dialogue, the report identifies four priorities that should be addressed:

  • Build on the large unused potential to co-operate on hydrogen in the north-western European region.
  • Identify what is needed to develop an integrated regional market.
  • Develop supporting schemes with a holistic view of the hydrogen value chain.
  • Identify the best opportunities to simultaneously decarbonise current hydrogen production and deploy additional low-carbon supply.

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Seven Countries Account for Two-Thirds of Global Gas Flaring

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In an unprecedented year for the oil and gas industry, oil production declined by 8% in 2020, while global gas flaring reduced by 5%, according to satellite data compiled by the World Bank’s Global Gas Flaring Reduction Partnership (GGFR). Oil production dropped from 82 million barrels per day (b/d) in 2019 to 76 million b/d in 2020, as global gas flaring reduced from 150 billion cubic meters (bcm) in 2019 to 142 bcm in 2020. Nonetheless, the world still flared enough gas to power sub-Saharan Africa. The United States accounted for 70% of the global decline, with gas flaring falling by 32% from 2019 to 2020, due to an 8% drop in oil production, combined with new infrastructure to use gas that would otherwise be flared.

Gas flaring satellite data from 2020 reveals that Russia, Iraq, Iran, the United States, Algeria, Venezuela and Nigeria remain the top seven gas flaring countries for nine years running, since the first satellite was launched in 2012. These seven countries produce 40% of the world’s oil each year, but account for roughly two-thirds (65%) of global gas flaring. This trend is indicative of ongoing, though differing, challenges facing these countries. For example, the United States has thousands of individual flare sites, difficult to connect to a market, while a few high flaring oil fields in East Siberia in the Russian Federation are extremely remote, lacking the infrastructure to capture and transport the associated gas.

Gas flaring, the burning of natural gas associated with oil extraction, takes place due to a range of issues, from market and economic constraints, to a lack of appropriate regulation and political will. The practice results in a range of pollutants released into the atmosphere, including carbon dioxide, methane and black carbon (soot). The methane emissions from gas flaring contribute significantly to global warming in the short to medium term, because methane is over 80 times more powerful than carbon dioxide on a 20-year basis.

“In the wake of the COVID-19 pandemic, oil-dependent developing countries are feeling the pinch, with constrained revenues and budgets. But with gas flaring still releasing over 400 million tons of carbon dioxide equivalent emissions each year, now is the time for action. We must forge ahead with plans to dramatically reduce the direct emissions of the oil and gas sector, including from gas flaring,” said Demetrios Papathanasiou, Global Director for the Energy and Extractives Global Practice at the World Bank.

The World Bank’s GGFR is a trust fund and partnership of governments, oil companies, and multilateral organizations working to end routine gas flaring at oil production sites around the world. GGFR, in partnership with the U.S. National Oceanic and Atmospheric Administration (NOAA) and the Colorado School of Mines, has developed global gas flaring estimates based upon observations from two satellites, launched in 2012 and 2017. The advanced sensors of these satellites detect the heat emitted by gas flares as infrared emissions at global upstream oil and gas facilities.

“Awareness of gas flaring as a critical climate and resource management issue is greater than ever before. Almost 80 governments and oil companies have committed to Zero Routine Flaring within the next decade and some are also joining our global partnership, which is a very positive development. Gas flaring reduction projects require significant investment and take several years to produce results. In the lead-up to the next UN Climate Change conference in Glasgow, we continue to call upon oil-producing country governments and companies to place gas flaring reduction at the center of their climate action plans. To save the world from millions of tons of emissions a year, this 160-year-old industry practice must now come to an end.” said Zubin Bamji, Program Manager of the World Bank’s GGFR Partnership Trust Fund.

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IEA supports Indonesia’s plans for deploying renewable energy

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The IEA is carrying out a large work programme on power system enhancement with the Government of Indonesia to help it modernise the country’s electricity sector, including support for overcoming challenges inherent in integrating variable renewables like wind and solar PV.

As part of the work programme, the IEA hosted a series of webinars in early 2021 where Indonesia’s Ministry of Energy and Mineral Resources and national power utility PLN could learn from other countries’ experiences of integrating and setting targets for variable renewable energy.

An introductory session on the principles of integrating renewable energy was held ahead of the country specific sessions. In this session, the IEA presented its framework for renewable integration phases to the Ministry and PLN, highlighting the different challenges often faced during renewable integration as well as what flexibility options can be deployed to tackle these challenges.

In the first country session, IEA presented the main findings of the Thailand flexibility study that the Agency carried out in cooperation with EGAT, the Thai electricity utility. The study shows that Thailand has the technical capability to integrate larger shares of variable renewables, but that the lack of commercial flexibility is a major barrier for operating the power system in a more flexible way and thus is the main obstacle for integrating large amounts of renewables.

In the second country session, the Danish Energy Agency presented its work programme with the Government of Viet Nam. The sessions focused on important aspects for integration of renewables, such as the assessing the needs and implications of reserves and forecasting. The session also included a discussion on the main learning points from the boom in rooftop solar that Viet Nam has experienced in 2020. 

The third and last country session was on India. The IEA presented both national as well as state-level modelling in order to show some of the contextual differences between national models and models that focus on specific geographical regions. In India, the spot market accounts for only 10% of electricity generation, which shows that India, like Thailand, has some issues with commercial flexibility. The discussion also covered India’s level of dependency on physical power purchase agreements and its impacts on the flexibility of the power system.

All sessions were held behind closed doors to allow for an open discussion between the participating organisations on the issues of renewable integration and possible ways of addressing barriers. The IEA will continue the work with the Indonesian Ministry and PLN on this topic in order to facilitate a path towards a clean, affordable, secure and modern power sector in Indonesia.

This work in Indonesia is undertaken within the Clean Energy Transitions in Emerging Economies programme.

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