International Energy Agency (IEA) Director Nobuo Tanaka has said that Australia sits at a clean energy crossroads.
“Current global trends in energy supply and consumption are patently unsustainable. Preventing irreversible damage to the global climate ultimately requires a major decarbonisation of world energy sources,” he told delegates at the Clean Energy Council Conference in late November 2008.
“The energy sector will have to play the central role in curbing emissions through major improvements in efficiency and rapid switching to renewables and other low carbon technologies.”
The World Energy Outlook 2008 (WEO 2008) found that energy efficiency and renewable energy will need to deliver more than three quarters of the world’s greenhouse emission reductions by 2030 if the world is to see only a 2°C increase in global average temperatures.
WEO 2008 – a year of change, a future faced with urgency
Mr Tanaka said that the release of the IEA’s annual flagship publication WEO 2008 is more important than previous years because it covers the issue of supply-side limitation as well as “this very important issue of climate change.”
While the world looks very different to six months ago, Mr Tanaka reiterated the long term vision and commitment required to abate the climate change challenge.
“The global financial conditions facing us at present are nothing short of critical and yet it is vital that we keep our eyes on the medium and long term target of a more secure, sustainable energy future for all,” he said.
The WEO 2008 presents three climate policy scenarios based on greenhouse gas stabilisation levels – a reference scenario, a 550 parts per million (ppm) and a 450 ppm scenario. The report provides analysis to help policy makers around the world assess and address global energy supply and demand as well as the challenge posed by climate change in 2030.
In the WEO 2008 reference scenario, which assumes no new government policies, world primary energy demand will grow by 1.6 per cent per year on average between now and 2030 – an increase of 45 per cent or a total of 41 gigatonnes of CO2 in the atmosphere.
In this scenario, fossil fuels account for approximately 80 per cent of the overall increase in energy demand to 2030, with non-OECD countries accounting for 97 per cent of global energy demand growth.
Projected global energy use to 2030 is unsustainable, said Mr Tanaka.
“On current trends, energy related emissions of CO2 and other greenhouse gases could push average global temperatures up by as much as 6°C in the long term based on IPCC projections,” he said.
Reducing emissions, rising renewables and a smarter grid
Under the reference scenario, the share of renewables in total electricity generation is predicted to rise from 18 per cent in 2006 to almost 23 per cent in 2030.
However under a 550 ppm greenhouse gas stabilisation scenario and a 450 ppm stabilisation scenario, the contribution of renewables is predicted to be 30 and 40 per cent respectively.
“Renewable or clean technologies are key and technology must be key,” said Mr Tanaka. “All options must be open. Everything must be fully explored.”
The WEO 2008 report found that improving energy efficiency will make the biggest contribution to reducing greenhouse gas emissions, however Mr Tanaka highlighted the enormous challenge to realise emissions reductions through energy efficiency.
“It depends on the purchase of efficiency technologies such as clean vehicles, efficient appliances or energy efficiency buildings by the hundreds of millions of households worldwide. But these are highly cost effective measures and can even lead to savings on energy infrastructure.”
To secure energy supply, Mr Tanaka called for the development of a smart grid – a project the IEA is currently working on.
“Expanding the grid, managing it smartly and regulating it smartly; that is the direction current governments [need to] take,” he said.
Speaking with EcoGeneration, Mr Tanaka made the point that it is not technology policy that is needed now but energy policy, including grid design and size, the size of the grid’s market and access to that grid. A smart grid, he said, is key to the deployment of renewable technologies.
Energy and economic security
Mr Tanaka told EcoGeneration that a carbon market must be introduced globally to ensure that competitiveness is maintained across all markets. The IEA is currently analysing what kind of impact such a market will have.
However, he said that competitiveness consists of many elements and carbon cost is only one of them. Global discussions are another and, as a major energy exporter, Australia must play a lead role in contributing to the global discussion.
Asked what we can expect from the Copenhagen climate change meeting next year, Mr Tanaka said that a combination of policy mechanisms, including cap and trade schemes, international sectorial approaches and national policies and measures reflecting nations’ varied circumstances and current negotiating positions, is a realistic outcome.
Encouraging investment in new technologies is key. While most people understand the serious threat that climate change poses economically, socially and environmentally, Mr Tanaka said convincing the private sector to invest is another difficult game.
“Very stable predictable, transparent policy framework is necessary otherwise the private sector will not invest,” he said.
Clean energy businesses and organisations are at the front line of important work needed to secure a sustainable energy future.
“Investment now can play a very important role in stimulating the global economy by boosting energy investment, including by investment in green and lower emission energy activities,” he said.
“Without meeting the energy challenge we cannot meet our climate challenge.”
