Ukraine’s war has made the security and price stability of domestically produced renewable energy so attractive to governments that it will become the world’s main source of electricity in the next three years, according to the International Energy Agency. Energy.
The world will build 2,400 gigawatts (GW) of new generating capacity mainly from solar and wind power in the next five years, equal to all of China’s current generating capacity, the IEA said in a new forecast released Tuesday. .
That’s a 30 percent higher level of investment than forecast a year ago.
That rate of increase will make renewables the world’s largest source of electricity by 2025, surpassing coal, the IEA said.
By 2027, they will account for 38 percent of the electricity mix, up from 28 percent today.
The war has caused huge increases in hydrocarbon prices as the West banned Russian hydrocarbons and rushed to replace them.
The United States banned imports of Russian crude on March 8, two weeks after the Russian invasion.
The European Union banned Russian coal a month later and Russian crude oil in June.
Brent crude, a benchmark oil, rose from just over $70 a barrel in January to $122 in July. Natural gas rose from less than $4 per million BTU in January to nearly $10 in August.
Fossil fuel producers, including Russia, made windfall profits of $2 trillion during the war, according to the IEA.
“Higher prices for fossil fuels around the world have improved the competitiveness of solar PV and wind generation against other fuels,” the IEA said.
Four-fifths of the new renewable capacity will come from solar photovoltaics and wind turbines, which will more than double all current installed capacity in the next five years, the IEA said in its report.
And with renewables absorbing 90 percent of new investment, all other energy sources in electricity production, including coal, oil and natural gas, are expected to decline.
“The Ukrainian war has accelerated all energy developments, in renewable energy and liquefied natural gas, because we have to replace Russian energy,” said Kostis Sifnaios, director of Gastrade, a multinational company that is building a new high-altitude gas terminal. sea in the aegean port of Alexandroupolis.
“I think European politicians have understood that this reliance on Russian gas was not a good idea and that its replacement is not reversible,” he told Al Jazeera.
Key progress towards renewable energy has come from three key legislative initiatives.
The first is China’s 14th Five-Year Plan, which called for a reduction in carbon intensity per unit of gross domestic product.
Last May, the EU approved the RePowerEU plan, which obliges members to generate 45 percent of their total final energy consumption from renewables by 2030. To achieve this, they must generate at least two-thirds of their electricity from from renewable energy.
The third is the US Inflation Reduction Act, which invests $370 billion in renewable energy over 10 years, the largest US public investment in clean energy.
But is the world on track?
The IEA forecast reinforces the view that the Ukraine war is accelerating Europe’s green energy transition rather than stifling it, even as the conflict forces Germany and Eastern Europe to turn to more domestic use of coal. short term.
A recent report from energy think tanks E3G and Ember showed that electricity generation from renewables in the EU had risen by a record 13 percent between January and September, as countries accelerated projects already in the pipeline. and raised their emissions reduction targets by 2030.
Consumers, industry and governments appear to be doing more to counter climate change, even though this year’s UN climate summit in Egypt failed to make progress on mandatory cuts in greenhouse gas emissions. .
Even if the IEA’s renewable energy forecast comes true, that doesn’t mean the world is doing enough to keep global warming to 1.5°C.
The IEA World Energy Outlook, published in October, said that even under established policies and announced commitment scenarios, the world is on track for 12 billion tonnes of carbon emissions per year by 2050, rather than the target of net zero, followed by a temperature increase of 1.7 degrees Celsius by 2100.
However, Tuesday’s report includes a scenario in which “global renewable capacity can expand by an additional 25 percent compared to the main forecast, if countries address policy, regulatory, permitting and financing challenges.”
But renewable energy experts caution that the IEA’s predictions are based on assumptions that Europe has yet to meet.
“The IEA forecast assumes that all the regulatory progress presented by the European Commission comes to fruition,” said Ivan Pineda, director of innovation at Wind Europe, a wind energy industry research and advocacy group in Brussels. “That mainly means permission from EU governments. There are ongoing negotiations between the European Council and the European Parliament regarding the granting of permits. If there is an agreement, yes you can.”
The advantage of this is that many mature investment-backed projects could be unlocked relatively quickly.
“About 80 GW of wind projects are stuck somewhere in Europe right now, compared to 200 GW in operation,” said Christoph Zipf of Wind Europe. “We need to make it much faster and simpler. For example, developers are required to deliver materials on paper, not digitally. We had a case in Italy where a developer told us that the paper and printing costs alone amounted to 20,000 euros.”
Wind Europe says it is optimistic that the current negotiations will approve a two-year fixed term to allow new projects by the second quarter of 2023.
Europe ultimately plans to have 760 GW of wind generation capacity installed onshore and 450 GW offshore.
The IEA report also highlighted potential bottlenecks in the supply of raw materials.
“[Europe] it imports a number of materials for wind turbines, especially rare earth materials, minerals that are included in the magnets used inside the generators,” Pineda said. “If those materials are supplied, Europe has the production capacity to meet those targets,” she said, referring to the IEA forecast.
What happened before the war?
The Ukraine war is the latest, and arguably the strongest, in a series of catalysts towards climate action.
For five years after the landmark 2015 Paris Agreement, which set emission reduction targets to keep global warming to 1.5°C or less, global investment in renewable energy held steady at $1 trillion a year, according to the IEA. But as the cost of renewables continued to fall, the total installed capacity for that money increased each year to outpace the growing demand for power.
Three years after the Paris Agreement, the EU set itself the target of generating 32% of total final energy consumption from renewable energy by 2030. This led to the publication of binding National Energy and Climate Plans in 2019.
In 2020, during the pandemic recession, Europe launched the Recovery and Resilience Fund, allocating 37 percent to renewable energy to help meet the 2030 targets.
In 2021, amid reports of accelerating climate change, the EU launched Fit for 55, a target to reduce emissions by 55% relative to 1990 levels by 2030. This would be achieved by accelerating the energy transition and generating 40% of the total final energy consumption. of renewable energy by 2030.
All of this helped lead to a global increase in renewable energy investments already seen in 2020-21, after years of flat investment.
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