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04/25/2012 12:48 PM     print story email story  

IEA Urges Governments to Speed Up Green Technology Deployment

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Governments are falling badly behind on low-carbon energy, putting carbon reduction targets out of reach and pushing the world to the brink of catastrophic climate change, says the International Energy Agency in its annual "Tracking Clean Energy Progress" report, issued yesterday.

"The world's energy system is being pushed to breaking point. Our addiction to fossil fuels grows stronger each year. Many clean energy technologies are available but they are not being deployed quickly enough to avert potentially disastrous consequences." writes Maria van der Hoeven, executive director of the International Energy Agency (IEA), in the Guardian.

Over the past year, the typically conservative International Energy Agency has urged governments to stop subsidizing fossil fuels and to instead subsidize renewable energy to stabilize the earth's climate.

Worldwide, direct fossil fuel subsidies added up to roughly $500 billion in 2010, in contrast to just $66 billion for renewable
energy.
In 2009, the G20 pledged to stop subsidizing fossil fuels, but that has yet to happen.

With a price on carbon, solar energy can provide a third of the world's energy by 2060, says IEA.

"We have a responsibility and a golden opportunity to act," says IEA Deputy Executive Director Ambassador Richard Jones. "Energy-related CO2 emissions are at historic highs; under current policies, we estimate that energy use and CO2 emissions would increase by a third by 2020, and almost double by 2050. This would be likely to send global temperatures at least 6C [11F] higher within this century. Such an outcome would confront future generations with significant economic, environmental and energy security hardships - a legacy that I know none of us wishes to leave behind."

IEA calculates the world must spend five trillion dollars by 2020 in energy efficiency, renewable energy and clean transportation to prevent global temperatures from exceeding a 2 degrees Celsius (3.6 Fahrenheit) rise.

The fuel savings from this investment would add up to $4 trillion, bringing the net amount down to one trillion.

IEA presented the report to the 3rd Clean Energy Ministerial conference where energy ministers representing 23 countries (accounting for most of the world's emissions) met in London to discuss climate change policies.

"The ministers meeting this week in London have an incredible opportunity before them," says Jones. "It is my hope that they heed our warning of insufficient progress, and act to seize the security, economic and environmental benefits that a clean-energy transition can bring."

Green Technology Not Growing Fast Enough

Onshore wind has grown 27% a year and solar PV, 42% a year (from a tiny base) over the past decade - a good start, but nowhere near enough.

The world needs to generate 28% of its electricity from renewable energy by 2020 and 47% by 2035 to reduce levels of carbon in the atmosphere to livable levels. Renewables make up 16% of the global electricity supply today.

"Even more impressive is the 75% reduction in system costs for solar PV in as little as three years in some countries. This serves as evidence that rapid technology change is possible," IEA says.

Other technologies are making only "halting progress" at best, such as vehicle fuel-efficiency gains, energy efficiency upgrades in buildings and industry, biofuels, geothermal and carbon capture. Nearly half of new coal-fired power plants are still being built without effective pollution prevention technology.

While government targets for electric vehicles (20 million by 2020) are ambitious, as are continued nuclear expansion plans in many countries, translating plans into reality is easier said than done.

Manufacturers' production targets for electric vehicles after 2014 are highly uncertain; and increasing public opposition to nuclear power is proving challenging to address.

The world needs 40 coal plants to be fitted with carbon capture within eight years - so far none have been built.

IEA makes three over-arching policy recommendations to move mainstream green technologies:

1. Level the playing field for clean energy technologies. Energy prices must reflect the "true cost" of energy - accounting for the positive and negative impacts of energy production and consumption;

2. Unlock the potential of energy efficiency, the "hidden fuel." The first priority of energy policy must be elimination of wasted energy.

US Dept of Energy Sec't Chu said that raising efficiency standards for household appliances and for building construction should be a "no brainer."

"It will save your citizens money and your country energy. There's a tremendous opportunity to build an infrastructure that literally could be twice as efficient as the ones that were built in the previous century," he said.

3. Accelerate energy innovation and public support for research, development and demonstration. This will lay the groundwork for private sector innovation, and speed technologies to market.

UK Energy Secretary Ed Davey noted that making these investments in a"sluggish" economy is challenging, but "the risk is that recession delays low-carbon investment, leaving us a high-carbon legacy even when the global economy recovers and making meaningful action on climate change more expensive. "We don't start from a good place. 80% of our emissions from energy are already locked in, and the emissions gap is growing."

In the first quarter of 2012, clean energy investment dropped to its lowest level since the depths of the recession in 2009. Solar, wind and other technologies are having a hard time finding financing because of constrained bank rules.

For every Euro not spent on carbon reductions before 2020, 4.3 euros will be required after that to bring the world back to 2 degrees of warming rather than the 6 degrees the world is headed for now, said Jones.



Reader Comments (1)

Author:
Henrique

Date Posted:
09/19/13 10:19 AM

The world is awash in natural gas, and will be for decdaes, that is why some drillers are losing money. It is called a glut. It is only a glut if they keep drilling the uneconomic marginal plays, which is the shale formations. You assume that companies will keep wasting investor capital by producing natural gas at a loss. I do not believe that can go on for very long in a world where gas depletion for new wells is running at 50% per year and the ultimate recovery rates are much lower than assumed. This is why the gas players have gotten killed and are now trying to raise capital to drill for shale liquids.Huge strikes are being made everywhere (thnk Indonesia) and then add to that shale. Eni just announced a shale deal with China. China has a large land mass, crickey-almighty who knows what they have? I am very interested in the conventional gas strikes but do not believe that the shale gas is economic. That means that I would rather be looking for gas in Mexico rather than ND or New York. The idea is to make money by getting a decent return, not to keep producing for a loss and letting management siphon off your capital through high salaries. The problem with many remote locations is transport. You need to be close to your market or to have huge amounts of capital for GTL or LNG conversion. Both tend to reduce returns significantly, which means that around one third of the energy will be wasted during the conversion process. Right now, Methanex sells methanol at $1.25 a gallon (roughly $2.50 a gallon BTU equivalent).Methanol is used as feedstock in chemical production. It would not surprise me to see Methanex take advantage of some of these discoveries and build a plant near the fields as it has done in the past. But the gains to the producers and consumers will not be as great as they are for Methanex or similar players that take advantage and move their plants to where the gas is.That's before the enormous economies of scale that would occur if methanol ever went mainstream. Unless you are a drag racer or Monster Truck driver chances are that you will not be using methanol as a fuel due to its volatility and corrosive properties. Peak Oil is a non-story. Peak Demand for fossil crude may the story of the next 20 years.But it isn't even a story yet. And that is even though we know that the production of light sweet peaked in 2005 and have seen prices near $100 in the past week. That's the old, old story on all commodities--they go bust sooner or later.I think that the fiat currencies and the sovereign bond markets are more likely to go bust sooner or later. If you are not ready and refuse to take steps to protect yourself you have nothing to blame but your own ignorance.

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