World Energy Outlook: the future is electric

Published on Thursday, 6 December 2018

The cost of renewables continues to fall, electrification is on the increase and coal looks set for a structural decline. Despite all this, however, the planet’s future remains at risk and continues to depend on the energy choices made by governments. Those, in a nutshell, were the findings to emerge from the 2018 World Energy Outlook analysis carried out by the International Energy Agency (IEA) and presented at the Enel auditorium in Rome on 6 December by IEA Executive Director Fatih Birol. Also speaking at the event were Enel’s Chairman Patrizia Grieco and CEO Francesco Starace.

Having remained steady for three years, CO2 emissions from the energy sector actually increased by 1.6% in 2017 and estimates appear to confirm the trend for further rises in 2018, in a significant departure from the trajectory required to achieve the climate goals set by the Paris Agreement in 2015. According to the WEO “a transition that is as rapid and as inexpensive as possible requires acceleration in investment in cleaner, smarter and more efficient energy technologies.”

This year, the IEA analysis placed special focus on electricity. Demand for electric energy is set to grow at twice the pace of demand for energy as a whole. In 2017, the number of people worldwide without access to electricity fell below one billion for the very first time. That said, achieving the UN’s Sustainable Development Goal #7 (ensuring access to affordable, reliable, sustainable and modern energy for all) remains well out of reach with 600 million people in Sub-Saharan Africa and 350 million in Asia still living without electricity. “Electrification brings benefits, mainly by reducing pollution on a local level,” the report explained. Nonetheless, to take full advantage of its potential “additional measures are required to decarbonise the generation phase: otherwise the risk is that CO2 emissions will merely be shifted upstream, i.e. from end sectors to electricity generation.”
The electricity sector is also undergoing the most radical transformation in its 100-year-plus history, however. In economies centred around light industry, digital services and technologies, electricity has become the main energy source. Growth in demand for electricity depends on the speed at which its use increases for purposes such as heating homes, offices and factories, as well as how rapidly it will be able to penetrate the transport sector.
Policies matter,” writes Birol in the introduction to the report: government choices aimed at ensuring a safer, more economical and sustainable future will be pivotal.
As ever, the World Energy Outlook’s goal is not so much to make forecasts and predictions but to explore the various potential scenarios between now and 2040. It sets forth three: the Current Policies Scenario (CPS), with no change to current policies, highlights growing tensions concerning almost all aspects of energy security; the New Policies Scenario (NPS), which sees the overall picture improving thanks to government policies; and the Sustainable Development Scenario (SDS), in which an accelerated transition to clean energy sources will help the planet to achieve internationally-agreed objectives on CO2 emissions reduction, air quality and universal access to modern energy.

None of the above scenarios is set in stone, however: all are possible. Where we go from here is up to us. 

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