The energy sector is actually changing far faster than people think, the International Energy Agency (IEA) has said, but time is short and much still needs to be done.
The prospect of limiting global warming to 1.5°C remains within reach, mainly down to record growth in a number of key clean technologies. However, emissions still need to fall by 80% in advanced economies by 2035 and 60% in emerging markets and developing economies on 2022 levels and as it stands, current Nationally Determined Contributions and net zero pledges will not be enough to make this happen and deliver net zero by 2050.
This makes COP28 and the first Global Stocktake under the Paris Agreement key opportunities for enhancing ambition and implementation. In truth, for there to be an equitable global pathway to net zero by 2050, almost all countries will need to bring forward their targeted dates for net zero. For advanced economies, this means 2045.
The IEA highlighted how in its Delayed Action Case, a failure to increase ambition through to 2030 would bring about additional climate risks and render the 1.5°C goal dependent on massive deployment of carbon removal technologies, which are currently expensive and unproven at scale. This would call for almost 5Gt of CO2 being removed from the atmosphere every year during the second half of the century and, should removal technologies fail to deliver at scale, then returning the temperature to 1.5°C would be rendered impossible.
The world does actually have the tools to go much faster, such as through ramping up renewables, improving energy efficiency, cutting methane emissions and increasing electrification. The technologies for all of these are already available today and can deliver over 80% of the emissions reductions required by 2030.
Yet, there is still more progress needed around infrastructure, with large, new, smarter and repurposed networks, large quantities of low emissions fuels, technologies to capture CO2 from smokestacks and the atmosphere, more nuclear power, and large land areas for renewables all also required.
Electricity transmission and distribution grids are required to expand by around 2mn kilometres each year to 2030 to meet the needs of the IEA’s net zero emissions (NZE) scenario. Carbon capture, utilisation and storage (CCUS), hydrogen and hydrogen-based fuels, and sustainable bioenergy are all crucial to achieving net zero too, with rapid progress needed by 2030. Despite a surge in announced projects for CCUS and hydrogen, a majority are yet to reach final investment decisions and are reliant on further policy support to boost demand and pave the way for new enabling infrastructure.
Further takeaways from the IEA’s report include the need to increase clean energy investment in developing countries. While the world is set to invest a record $1.8trn in clean energy in 2023, this needs to climb to $4.5trn by the early 2030s to fall in line with the IEA’s pathway to net zero.
There will be no need for investment in new coal, oil and natural gas through the NZE scenario, with stringent and effective policies through this pathway driving clean energy development and cutting fossil fuel demand by over 25% by 2030, then 80% by 2050, while particular attention needs to be paid to a looming supply and demand gap for critical minerals.
Elsewhere, as electricity becomes the “new oil” of the global energy system through the IEA’s NZE scenario, secure electricity supplies will become even more important. This means a hugely increased need for electricity system flexibility, calling for massive growth of battery energy storage and demand response, expanded, modernised and cybersecure transmission and distribution grids, and more dispatchable low-emissions capacity.
