The speed of the shift towards cleaner energy despite the Covid-19 pandemic and ongoing global economic crisis is reason for “optimism”, according to International Energy Agency (IEA) executive director Fatih Birol.
In a LinkedIn post, Birol hailed the advances in renewable energy technologies, government policies and oil and gas companies’ business strategies that can help drive sustained declines in carbon emissions in the years ahead — even as economies start growing again.
'Significant challenges ahead'
However, ahead of the release of the Energy Technology Perspectives 2020 report on Thursday, the IEA boss warned of the “significant challenges ahead” for the energy sector, which could impact the world’s net-zero emissions ambitions.
“The ambitious clean energy commitments and actions taken so far are a major step forward – but they are far from enough. Greater efforts need to be devoted to supporting fair, inclusive clean energy futures for all parts of the world,” Birol said.
“Huge parts of global industry have yet to make clean energy transitions a top priority. For example, the oil companies that have pledged to reduce their own emissions to net zero produce less than 10% of global oil output."
While oil and gas companies have been stepping up to become much more proactive in seeking to reduce emissions, more work is required to ensure net-zero ambitions are met.
'Huge amount of work to do'
“They (oil and gas companies) have a huge amount of work to do, but with their deep pockets, project management skills and engineering expertise, they could greatly advance offshore wind, hydrogen and carbon capture,” Birol said.
In a report released on Tuesday, Norwegian consultancy DNV GL said commitments made by oil and gas companies indicate that emissions reductions in the short term will come largely from efforts to decarbonise oil and gas production.
“Solutions include electrifying oil and gas assets, reducing flaring and venting of gas during production, increased efforts to detect and stem methane leaks, and efficiency gains through digitalisation,” DNV GL said in its Energy Transition Outlook.
“However, oil and gas production and distribution accounts for only a quarter of the industry’s carbon emissions; the majority occurs during the combustion of oil and gas,” it added.
DNV GL also noted that while there are limited options to reduce emissions from oil consumption, other than shifting to another energy source, natural gas consumption can be decarbonised through deploying CCS technology.
Meanwhile, in addition to the challenge of getting more countries and companies on board with efforts to continue to reduce emissions, IEA's Birol said, efforts should also ensure no one is left behind.
“The pandemic risks widening the divide between rich and poor. Hundreds of millions of people, mainly in Africa, still lack basic access to electricity,” he said.
“Solar power offers a tremendous opportunity to improve this situation. But many African economies are now struggling financially, with some facing full-blown debt crises, as a result of the global recession,” Birol said.
Birol hailed solar technology as the technology “leading renewables to new heights” thanks to its “dramatically” declining cost, which helped solar become “ the cheapest option in many economies”.
Another challenge is the need to tackle emissions from existing infrastructure, Birol added.
“Attention is overwhelmingly focused on building new power plants, factories and transport networks with clean energy technologies,” he said.
“But if we don’t also address emissions from the world’s vast fleets of inefficient coal plants, steel foundries and cement factories – many of them recently built in emerging economies – we will have no chance of meeting our climate and energy goals,” Birol said.
On Thursday, the IEA is due to release a report taking a closer look at the technologies needed and opportunities for reaching international climate and sustainable energy goals.
The report – the first released in three years – is expected to highlight the need for a “dramatic increase in clean energy technologies, driven by a sharp acceleration in innovation”.