Renewable energy is expected to make up nearly half of the global electricity mix by 2030 under current policies, but “stronger” measures would be required to meet the goals of the Paris Agreement, the International Energy Agency said on Tuesday.
By the end of the decade, there will be 10 times as many electric cars on the road worldwide, with the share of renewable energy in power generation rising to 50 per cent from 20 per cent now, the Paris-based agency said in its World Energy Outlook.
Heat pumps and alternative electric heating systems are forecast to surpass the sales of fossil fuel boilers globally by 2030, the IEA said.
Meanwhile, investments in new offshore wind projects are projected to be three times higher than those in new plants powered by coal and natural gas.
“The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us,” said Fatih Birol, IEA’s executive director.
“Governments, companies and investors need to get behind clean energy transitions rather than hindering them.”
Based on current policy settings, peaks in global demand for coal, oil, and natural gas are expected this decade, the IEA said.
The share of fossil fuels in global energy supply will decline to 73 per cent by 2030, from 80 per cent currently, with energy-related carbon dioxide emissions peaking by 2025.
Even as renewable energy adoption grows, the demand for fossil fuels is expected to remain “far too high” to achieve the Paris Agreement goal of limiting the rise in average global temperatures to 1.5°C above pre-industrial levels, the IEA said.
“This risks not only worsening climate impacts after a year of record-breaking heat, but also undermining the security of the energy system, which was built for a cooler world with less extreme weather events,” the agency said.
Despite significant clean energy growth under current policies, global emissions would drive up average temperatures by about 2.4°C this century.
“Every country needs to find its own pathway, but international co-operation is crucial for accelerating clean energy transitions,” said Mr Birol.
“In particular, the speed at which emissions decline will hinge in large part on our ability to finance sustainable solutions to meet rising energy demand from the world’s fast growing economies,” he added.
The Israel-Gaza war, which has spiralled into a major humanitarian crisis, has created further uncertainty for a global economy that is feeling the effects of stubborn inflation and high borrowing costs, the IEA said.
Oil prices have recorded two straight weeks of gains amid concerns of the war escalating into a broader regional conflict, potentially affecting crude supplies.
The report outlined a few pillars for getting the world “on track” by 2030, including tripling global renewable energy capacity, doubling the rate of energy efficiency, and slashing methane emissions from fossil fuels by 77 per cent.
Under current policies, renewables are set to contribute 80 per cent of new power generation capacity to 2030, with solar alone accounting for more than half of the expansion.
Global solar panel manufacturing capacity is projected to rise to more 1,200 gigawatts per year by the end of the decade, but only 500 gigawatts will actually be installed, the agency said.
“If the world were to reach deployment of 800 gigawatts of new solar PV (photovoltaic) capacity by the end of the decade, it would lead to a further 20 per cent reduction in coal-fired power generation in China in 2030,” the IEA said.
Meanwhile, natural gas markets, which experienced a surge in volatility following Russia’s invasion of Ukraine last year, are set to ease in “a couple of years”, according to the IEA.
An “unprecedented” surge in new liquefied natural gas (LNG) projects coming online from 2025 is expected to add more than 250 billion cubic metres per year of new capacity by 2030, equivalent to about 45 per cent of current global LNG supply.
“The strong rise in capacity will ease prices and gas supply concerns, but also risks creating a supply glut,” the IEA said.
Russia, Europe’s biggest gas supplier before the war, will have very “limited” opportunity to expand its customer base, with its share of internationally traded gas, which stood at 30 per cent in 2021, estimated to drop to half of that by 2030.
The IEA expects China’s energy demand to peak around the middle of this decade amid continued growth in clean energy.
China, the world’s second-largest economy and leading crude importer, is undergoing a “major” shift as its economy slows and undergoes structural changes, the agency said.