1 - World Energy Outlook + Top Fossil Fuel Producing Nations Plant to Blow Past Climate Targets

International Energy Agency (IEA)'s Central Mission

Energy security

Why Are Clean Energy Transitions Accelerating?

Governmental policies and industries

Focus of Article

Renewables, electric cars, liquified natural gas (LNG), and effects of global warming and AI on electricity demand

STEPS

Stated policies scenario

APS

Announced pledges scenario

NZE

Net-zero scenario

Next Phase of Energy

Making energy safer overall, which will have a whole new market of more varied sources of energy

LNG Trends

There will soon be more supply than demand, which could cause prices to drop, allowing for greater investments in clean energy

Capacity for Energy Production

Lots of it available to produce clean energy, which should cause competition to lower prices

Clean Energy Investment

Almost 2 trillion/year, close to double the investments into new fossil fuel supply

Cost of Energy Trend

Continually downward

Leading Country in Added Renewable Energy Capacity

China with 60% worldwide

Drawbacks Primarily in Developing Countries

Policy roadblocks, high costs of capital, and grid connections

When Should Fossil Fuel Usage Peak?

By 2030, as renewable energy rises to meet global demand

Manufacturing Capacity

Set to increase over 1100GW, very nearly enough for NZE

Demand Projections

More than 6% higher for 2035 than last years assessment due to industry, EVs, cooling, and data centres/AI

Electric Cars...

Put strain on fossil fuel producers

Currently account for 20% of new cars, should be nearing 50% by 2030

LNG Production

Capacity on track to rise by 50%

Demand grows by 2.5% per year to 2035, faster than gas

Gas importing countries want a lower LNG price than can be allotted, unless there are lower costs to produce gas, more demand for electricity, and less energy transitioning

Fossil Fuel Price Drops

Caused by an overabundance in production, this allows investments in renewables grids storage and efficiency, and allows countries to regain momentum in the transition

Could also have the opposite effect, if fossil fuels are cheaper they become a more attractive option

Sustainability of the New Energy System

Must be built to last, if grids aren't built up they become vulnerable to extreme weather and cyber attacks

Currently, for every $1 spend on renewable power, 60 cents are for grids and storage

Inequities in the Energy System

Inequitable access (or lack thereof) to modern energy by country

Global Energy Mix

Fossil fuels down 2% in the last decade

Energy demand has increased by 15%, 40% of which is met by clean energy

In STEPS (stated policy scenario), clean energy has grown faster than demand between 2023 and 2035

In APS (announced pledges scenario) and NZE (net-zero scenario), final energy consumption starts falling

Aviation and shipping sectors still hard to switch over from fossil fuels

When Will CO2 Emissions Peak?

Before 2030, in all scenarios (STEPS, APS, NZE)

Geopolitical Vulnerabilities in Energy Supply Chain

E.g. Russia/Ukraine energy price spike

Strait of Malacca where 55% of global oil trade passes through

Strait of Hormuz where 20% of oil and LNG pass through

Areas critical to fossil fuel delivery

Issues with Declining Fossil Fuel Prices

Creates a competitive market, policies needed to not increase LNG demand and subsequent use

Supply Chain Domination

China possesses more than 80% of global manufacturing capacity for battery cathode and anode materials, solar PV, and cobalt, graphite, and rare earth metals

Other countries are trying to catch up but it will mostly remain in China

Concerns with Minerals

Increasing demands, mines which take a long time to make, ideally battery science developments can reduce demand

Clean Energy Stability

Should be more stable in operating price, fluctuations in production of material won't affect already-made batteries unlike traditional fuels

The Future of EVs

Need to ensure charging infrastructure to reduce travel anxiety in customers

China dominates growth in this sector

Canada to regulate EV availability so that 100% of vehicles sold in 2035 are electric

Battery prices continue to fall, making purchases cheaper, currently 60% less than traditional cars in China

Reduce demand for oil naturally

Multiplying Effect of Global Warming on Energy

Rising temperatures lead to increased use of cooling infrastructure, which adds more demand for electricity

Heat pumps essential to cutting fossil fuels in the buildings sector, market share to double by 2035 in STEPS, highly efficient so do not increase electricity demand

Use of electricity to produce hydrogen could greatly increase demand

Sustainably Meeting Demand

Comes with needing to manage fluctuations in supply and demand of renewable energy

Batteries essential to store and redistribute surplus

Sources on the Market

More than 30 countries have plans to increase nuclear capacity

Solar PV and wind are the cheapest, have had the biggest rise in clean energy in recent years accounting for 75% of added energy from 2010-2023

Fossil fuel usage also increased in this time, however, with CO2 emissions rising 20%

Countries that have Reduced Emissions

Australia, Korea, Japan, Argentina, South Africa, Brazil, and Mexico, all have clean energy production outpacing rise in energy demand

Despite China leading clean energy uptake, it is also increasing its use of fossil fuels with coal up more than 20% and natural gas up 40% in the last 5 years

Pathway to NZE

Has double the speed of clean power generation uptake than STEPS, shows governments need to be doing more

Solar and wind need to continue to lead in expansion to close the gap between STEPS and NZE

Also need a wide set of other clean sources to keep things affordable and smooth as the transition takes place

New Research

Emerging evidence for new alternatives, such as small modular reactors (SMRs), carbon capture technologies, and low emission hydrogen and ammonia which can reduce emissions from existing coal power plants

Competition in Domestic Markets

Fossil fuels will be challenged by clean alternatives as they get cheaper

Despite this, markets typically find ways to get their products out

Energy Access

Reaching universal access to electricity and clean cooking is central to a just, people-centred energy transition

UN members agreed to affordable, reliable, and modern energy to all by 2030, which is achieved in the NZE

Progress is so far uneven, public interventions and targeted incentives required to get 120 million people new access per year

International spending on electricity availability is going down as developed countries make rapid progress

Mission 300

A programme which will plans to get electricity to 300 people, has initial pledges of USD 30 billion, aims to triple that

An initial 2.2 billion was pledged to improve access to clean cooking

Difficult do to high costs compared to project size and how spread out it is, focus is therefore often on urban development which is more profitable

Necessary Rise in Investments for NZE

Especially deep in developing countries

Sixfold increase needed in developing countries, twofold in developed nations

Additional Benefits of Energy Transition

Clean energy facilities are cheaper to operate, not dependent on fuel market, improves air quality, creating a new job market

Scaling-Up

Depends on strong governance and policy certainty, alongside more financial support to in-need areas

G20 in Brazil, 2024

Three groups proposed

1. Investments in mature clean energy technology (low risk and underlying economics), usually privately led

2. These investments need risk mitigation based on collaboration between public and private sectors (facilitated interventions cover technologies used in one place but needed to be introduced elsewhere)

3. Publicly driven, including high project capital and risks (projects in less developed countries, places with conflict, places where public support is needed to lower costs)

Production Expectations

Governments expecting twice as much coal, oil, and gas in 2030 as would be consistent with the goals of the Paris Agreement

Production gap :(

US Congress

Since January, it has enacted billions of dollars in new subsidies to oil and gas companies while the Trump administration has forced retiring coal plants to continue operating, expanded mining and drilling access on public lands, delayed deadlines for drillers to comply with limits on methane pollution, and fast-tracked fossil fuel permitting while setting roadblocks for building wind and solar energy products

20 Nations Accounting for 80% of Fossil Fuel Output

All but 3 of these nations are planning or projecting increased production in 2030 of at least one fossil fuel. Eleven now project higher production of at least one fuel in 2030 than they did two years ago

China, US, and Russia

Alone were responsible for more than half of "extraction-based" emissions in 2022

Just Energy Transition Partnerships

Provide financing from wealthy countries to support phasing out coal in developing or emerging economies

Trump took the US out of these

Fossil Fuel Use...

Either will remain high for years in line with US production plans, or declines more quickly and governments are unprepared for the sudden drop in sales

If not done right, we face climate or economic uncertainty

Geopolitics and Energy Security

Conflicts, tariffs, etc.

Issues can be direct between conflicting countries or because of where energy passes through

China and Rare Minerals

Has full control over exports and won't sell to opposing militaries

Everything is done "in house" so it is not dependent on others

Other countries (Australia) trying to set up similar infrastructure but it is slow-moving