IEA PROMOTES GREEN ENERGY

The International Energy Agency or IEA was created in 1974 in response to the 1973 oil crisis with a mission to promote oil security and coordinate a collective response to any major disruptions in the supply of oil.

For years, IEA’s focus was primarily on oil and fossil fuels. But in more recent years, the IEA has broadened its vision to include sustainable sources of energy. Now, the IEA recommends policies that enhance the reliability, affordability, and sustainability of energy. This year, the organization has doubled down on that approach, releasing reports that lay out a path to zero carbon energy grid, and propose pathways to finance those energy sources.

The fact that an organization like the IEA has now pivoted toward renewables and is devoting its effort to their promotion reflects a seismic shift in global thinking and sends a strong signal that clean energy and a zero carbon future are not pipe dreams of well-intentioned, but largely irrelevant “fringe.” Rather, these are achievable objectives and potentially highly profitable ones to those that recognize the opportunity.

IEA Net Zero Report

The pathway set out in the IEA report calls for a smaller total energy supply serving a greater number of world inhabitants. Nearly 90% of electricity would come from renewable sources, mostly solar. Solar PV and wind together would account for 70%. Near-term reductions would come from existing technology. Out-year reductions would come from developing and new technology, advanced batteries, electrolysers for hydrogen, and direct air capture and storage, for example. Other highlights of the Net Zero Report include:

• No investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants.
• Major worldwide energy efficiency effort to reduce overall demand.
• No sales of new internal combustion engine passenger cars beyond 2035.
• Net-zero emissions from the global electricity sector by 2040.

The IEA Report projects a surge in total annual energy investment to $5 trillion by 2030. Based on work by the International Monetary Fund, the Report anticipates that global GDP would increase almost half a percent per year with millions of new jobs. By 2030, global GDP would be 4% higher than the current growth line.

IEA Financing Clean Energy Transitions Report

Last month, IEA published Financing Clean Energy Transitions in Emerging and Developing Economies in collaboration with the World Bank and the World Economic Forum. The Report seeks to address a key challenge to meeting climate goals: How can the world community effectively direct capital resources to build the clean energy infrastructure we need to limit global warming?

The Report highlights investment opportunities and showcases real-world case studies. It offers policy recommendations to help guide private enterprise and leverage public-private partnerships. A key finding is that more investment is needed in developing countries. Historically, global investment has been lacking in these regions, which are also the most populous, and if current trends do not change, will soon become the largest sources of emissions. But there is tremendous economic and environmental opportunity: Yet, the cost to avoid adding atmospheric carbon is about half what it is more developed nations.

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