New reports on hydrogen, steel, renewables integration and natural gas – as well as work on critical minerals and road transport emissions – help inform G7 energy and climate agenda
The IEA has produced a wide range of new analysis on key energy and climate topics for Japan’s Presidency of the G7, including reports on hydrogen, steel, renewables integration and natural gas – as well as contributions on critical minerals, clean energy supply chains, energy efficiency and reducing emissions from road transport.
The different analytical outputs are helping inform governments of leading economies ahead of the G7 Ministers’ Meeting on Climate, Energy and Environment in Sapporo, Japan, on 15-16 April and the G7 Hiroshima Summit on 19-21 May. They were requested by the Japanese government to support discussions among G7 countries and provide insights and direction for the G7 energy and climate agenda. But the reports offer valuable analysis that is not limited to the G7 and can help inform policy making in countries around the world in these areas.
On hydrogen, the report Towards Hydrogen Definitions Based on Their Emissions Intensity seeks to improve transparency on the emissions intensity of hydrogen production in order to bring much-needed clarity and facilitate investment. Most large-scale projects for the production of low-emissions hydrogen are facing important bottlenecks. Issues such as uncertainty about future demand, an absence of necessary infrastructure, and a lack of regulatory clarity are preventing project developers from taking firm investment decisions.
Using colours to refer to different production routes – or terms such as “sustainable”, “low-carbon” or “clean” hydrogen – obscures many different levels of potential emissions. This terminology has proved impractical as a basis for contracting decisions, deterring potential investors, the report notes. By agreeing to use the emissions intensity of hydrogen production in the definition of national regulations about hydrogen, governments can facilitate market and regulatory interoperability. The new report aims to assist governments in doing so by assessing the emissions intensity of individual hydrogen production routes so that governments can decide which level aligns with their own circumstances.
On steel, the report Emissions Measurement and Data Collection for a Net Zero Steel Industry, continues work undertaken during Germany’s G7 Presidency in 2022. The implementation phase for achieving a net zero steel industry will require robust methodologies for measuring emissions at the site- and product-level, together with data collection frameworks to facilitate comparison and track progress.
Following an evaluation of existing methodologies and frameworks for the steel industry, the report provides “net zero principles” to guide potential next steps for their development and implementation, together with specific policy recommendations for G7 members.
On renewables integration, the report Managing Seasonal and Interannual Variability of Renewables explores the integration of variable renewables such as wind and solar in future power systems where their share of annual electricity generation rises beyond 70%. Thanks to the successful use of flexibility resources – from stronger grids and interconnections to demand-side measures, affordable storage and dispatchable power supply – many countries have already securely and efficiently integrated significant shares of variable renewables in their electricity generation.
As wind and solar continue to grow as a proportion of generation, system level surpluses and periods of lower generation will eventually expand beyond hour-to-hour or daily variations to seasonal timescales. The report examines the potential flexibility needs for this, focusing on four different climatic regions and highlighting the potential role of existing thermal power capacities and of hydropower plants in providing seasonal flexibility and capacity during critical periods of the year. At the same time, it notes that as energy systems transition towards net zero emissions, all flexibility services will need to be fully decarbonised.
On natural gas, the report Outlooks for Gas Markets and Investment looks at the uncertainty around natural gas supply and demand, using insights from the scenarios underpinning the World Energy Outlook 2022, as well as a selection of other global scenario-based assessments. In the context of the current global energy crisis and efforts to tackle climate change, the report considers the key drivers affecting prospects for natural gas – with a particular focus on emerging and developing economies in Asia.
These are some of the latest instances of the IEA’s long-running work with the G7 to develop policy advice on energy security and clean energy transitions.