IEA: renewables to pass coal by 2025

The IEA is notorious for the conservatism of its renewables forecasts, having consistently underestimated the roll-out of renewables over more than a decade, while consistently underestimated the fall in costs. So, to make a forecast like this ...... well!!!!

Unfortunately, it's not enough to avert a ruinous 2 degree rise in global temperatures since before industrialisation began.


(Source)

Global electricity demand growth is expected to ease in 2023 before accelerating in 2024. Demand is expected to grow by slightly less than 2% in 2023, down from a rate of 2.3% in 2022 and the average annual growth rate of 2.4% observed over the 2015-2019 period. This moderation is strongly driven by declining electricity demand in advanced economies, which are dealing with the ongoing effects of the global energy crisis and slower economic growth. In 2024, as expectations for the economic outlook improve, global electricity demand growth is forecast to rebound to 3.3%.

Electricity demand in the European Union is set to decline in 2023 for the second year in a row, falling to its lowest level in two decades. EU electricity demand is expected to record a 3% drop in 2023, after already falling 3% in 2022. This is despite strong growth in electrification with a record number of electric vehicles and heat pumps sold. Following these two consecutive declines, which together amount to the region’s largest slump in demand on record, EU electricity demand is set to drop to levels last seen in 2002.

Europe's energy-intensive industries have not yet recovered from last year’s production slump, as evidenced by the staggering 6% year-on-year decline in total EU electricity demand during the first half of 2023. Almost two-thirds of the net reduction in EU electricity demand in 2022 is estimated to be from energy-intensive industries grappling with elevated energy prices. This trend has continued well into 2023, despite the prices for energy commodities and electricity falling from their previous record highs. As policy developments abroad courting industrial investment put pressure on Europe’s industrial competitiveness, the European Union is at a crossroads. The outcome of policy discussions now underway could determine the future of its energy-intensive industrial sector.


The substantial demand declines in advanced economies contrast sharply with the growth observed in emerging economies such as China and India. Japan is similarly expected to record a significant 3% fall in electricity demand in 2023, while the United States is set to see a decrease of almost 2%. In contrast, China's electricity demand is expected to increase by 5.3% in 2023 and 5.1% in 2024, slightly below its 2015-2019 average of 5.4%. India is set to have an average annual growth rate of 6.5% over the outlook period, surpassing its 2015-2019 average of 5.2%.


The accelerated pace of new renewable capacity additions shows that renewable generation could surpass coal as early as 2024, if weather conditions are favourable. This is supported by the expectation that coal-fired generation will slightly decline in 2023 and 2024 after rising 1.5% in 2022, when high gas prices boosted demand for alternatives. Increases in coal-fired generation in Asia in 2023 and 2024 are poised to be offset by strong drops in the United States and Europe.

Renewables are set to meet all additional demand in 2023 and 2024. With global demand growth easing in 2023, incremental increases in renewables alone are expected to cover all additional demand not only this year, but also in 2024, when demand growth is expected to accelerate again. By 2024, the share of renewable generation in global electricity supply will exceed one-third for the first time.

 

By 2024, electricity generation from fossil fuels is expected to have fallen four times in six years. Declines in fossil-fired generation were rare in the past and occurred primarily after global energy and financial shocks, such as following the oil crises of the 1970s or during the Great Recession in 2009, when overall electricity demand was suppressed. But in recent years, fossil-fired supply has lagged or fallen even when electricity demand expanded. These trends – driven by the strong growth in renewable generation – suggest the declines in fossil electricity generation are becoming structural. The world is rapidly moving towards a tipping point where global electricity generation from fossil fuels begins to decline and is increasingly replaced by electricity from clean energy sources.

 

Increases in emissions from power generation in China and India are expected to be more than offset by declines in other regions. The European Union alone accounts for 40% of the total decline in emissions from power generation expected to occur in 2023 and 2024, excluding China and India. The EU is followed by the United States, where renewables deployment is growing strongly, and gas is increasingly replacing coal-fired supply. Extreme weather, unexpected economic shocks and changes to government policies can cause an uptick in emissions in specific years. However, the overall trend of global power sector emissions plateauing is expected to persist, with years in which emissions decline, not rise, becoming more frequent.


Rising demand for cooling is straining the world’s power systems. Summers with extreme temperatures are becoming more frequent in many regions, elevating electricity demand for cooling systems and stretching power supplies. As more households start purchasing air conditioners, the impact will increase in many countries – especially in emerging economies that currently have a much lower share of households with AC than advanced economies with comparable climates. Setting higher efficiency standards for air conditioning would greatly help limit the impact of additional cooling demand on power systems. To ensure system reliability, it will be crucial to have adequate backup generation capacities, encourage demand management and energy storage, accelerate grid investments, and enhance fuel supply security for power plants. Insufficient preparedness in these areas could lead to more frequent stress on grids, resulting in load-shedding and blackouts.

If China and India were to stop building new coal power stations, then emissions from electricity generation would start to fall really fast.  The IEA's forecast decline is good news, but not good enough.  We need to halve emissions from all sources over the next 10 years.  Thanks to increases in China and India, the decline in emissions from electricity generation is just 1.9% over 2 years.  If China and India just kept their emissions constant, then the fall would be more like 5%.  Depressing

Renewable additions vs Nuclear

 From  Twitter thread by David Mitchell, founder of FindMyEV.com.au

Some one wanted a “normalised” graph of renewable additions vs nuclear. Here it is. Normalised against global population (kWh/capita). It’s not in kW because it’s not capacity, it’s production. So it’s global electricity production additions per capita, hence in kWh, [added production per person per year]

Renewables are in a classic exponential curve.
Nuclear peaked in the 80s and has been falling ever since.

Here are the IEA's data and forecasts for annual contributions to electricity demand, in TWh

Global changes in electricity generation, 2015-2024
yellow = renewables; green = gas; dark blue = coal; light blue = nuclear
Observe how *all* incremental electricity demand in 2024 is met via wind, solar and nuclear
See original chart here
I don't know why IEA thinks the additional renewables supply will be falling from 2022 to 2024.
Given the shock to the system from Russia's attack on Ukraine, I would have expected rollout of renewables to accelerate, not slow.

Insanely cheap energy

 A fascinating history about the Australian Professor--"the father of PV solar"--and his Chinese assistant, who made solar cells happen,

[From The Guardian]

In the year 2000, the International Energy Agency made a prediction that would come back to haunt it: by 2020, the world would have installed a grand total of 18 gigawatts of photovoltaic solar capacity. Seven years later, the forecast would be proven spectacularly wrong when roughly 18 gigawatts of solar capacity were installed in a single year alone. [Nearly 127 GW was add in 2020]

Ever since the agency was founded in 1974 to measure the world’s energy systems and anticipate changes, the yearly World Energy Outlook has been a must-read document for policymakers the world over.

Over the last two decades, however, the IEA has consistently failed to see the massive growth in renewable energy coming. Not only has the organisation underestimated the take-up of solar and wind, but it has massively overstated the demand for coal and oil.

Jenny Chase, head of solar analysis at BloombergNEF, says that, in fairness to the IEA, it wasn’t alone.

“When I got this job in 2005, I thought maybe one day solar will supply 1% of the world’s electricity. Now it’s 3%. Our official forecast is that it will be 23% by 2050, but that’s completely underestimated,” Chase says.

“I see it as the limits of modelling. Most energy system models are, or were, set up to model minor changes to an energy system that is run on fossil fuel or nuclear. Every time you double producing capacity, you reduce the cost of PV solar by 28%.

“We’ve got to the point where solar is the cheapest source of energy in the world in most places. This means we’ve been trying to model a situation where the grid looks totally different today.”

This rapid radical reduction in the price of PV solar is a story about Chinese industrial might backed by American capital, fanned by European political sensibilities and made possible largely thanks to the pioneering work of an Australian research team.

The deep history begins with a succession of US presidents and the quest for energy independence. First was Richard Nixon, who in November 1973 announced Project Independence to wean the US off Middle Eastern oil. Then came Jimmy Carter, who declared the energy transition the “moral equivalent of war” in April 1977 and pumped billions of dollars into renewable energy research, which came to a screeching halt when Ronald Reagan came to power.

But by then, interest had been piqued in Australia.

The solar cell was invented when Russell Shoemaker Ohl, a researcher in Bell Labs, noticed in 1940 that a cracked silicon sample produced a current when exposed to light. However, little improvement had been made until the contribution of Martin Green, a young engineering professor working out of the University of New South Wales.

Born in Brisbane, Green had spent some time in Canada as a researcher before circling back home in 1974. A year later he had started a PV solar research group working out of a small university laboratory built with unwanted equipment scrounged from big American engineering firms.

His first experiments, alongside a single PhD student, involved looking for ways to increase the voltage on early solar cells.

“Pretty soon, we started beating all these groups in the US in terms of the voltage we could get,” Green says. “Nasa had a project that had six contractors working on it. We beat them all.”

Not long after, Green and his team began to raise their ambitions. Having boosted the voltage, the next step was building better quality cells. Their early efforts broke the world efficiency record in 1983 – a habit the team would continue for 30 of the next 38 years.

In the very early years of the industry, the received wisdom had been that a 20% conversion rate marked the hard limit of what was possible from PV solar cells. Green, however, disagreed in a paper published in 1984.A year later, his team built the first cell that pushed past that limit, and in 1989 built the first full solar panel capable of running at 20% efficiency.

It was a moment that opened up what was possible from the industry, and the new upper limit was “set” at 25% – another barrier Green and his team would smash in 2008. In 2015, they built the world’s most efficient solar cell, achieving a 40.6% conversion rate using focused light reflected off a mirror.

Out of this whirlwind of activity, the Chinese solar industry would be born largely thanks to an ambitious physicist named Zhengrong Shi.

Born in 1963 on Yangzhong Island, Shi had earned his master’s degree and come to Australia a year before the Tiananmen Square protests. He had spotted a flyer advertising a research fellowship and talked Green into bringing him on as a PhD student in 1989.

Shi would finish his PhD in just two and a half years – a record that still stands today. By the time he became Dr Shi, he had so impressed Green that he stayed on as a researcher.

With time, the university was increasingly looking to commercialise its world-leading solar cell technology and struck up a partnership with Pacific Power in 1995. The government utility sank $47m into a new company called Pacific Solar. A factory was set up in the Sydney suburb of Botany and Shi was made the deputy director of research and development where he quickly earned a reputation for resourcefulness and precision.

“Zhengrong basically ran the company,” Green says.

Shi stuck it out for a few years but in November 2000, he was made an offer. At a dinner held at his home, four officials from the Chinese province of Jiangsu suggested the 37-year-old researcher and Australian citizen return to China and build his own factory there. After some consideration, Shi agreed and ended up settling in the small city of Wuxi where he founded SunTech with $6m in startup funding from the municipal government.

Shi’s arrival caused a stir. The ability to cheaply build conventional PV solar panels with 17% efficiency was far beyond what his competitors were capable of.

“That was a shock to them,” Shi says. “When they saw we were making solar cells of large area and high efficiencies they said, ‘Wow.’

“The first reaction was: that’s the future. Everybody said that’s the future. But they also said it was one step too early. What they meant was that there was no market for it yet. In China at the time, if you mentioned solar, people thought of solar hot water.”

All that would change when Germany passed new laws encouraging the uptake of solar power. Quickly it became clear there was a massive global demand and the world’s manufacturers were struggling to keep up with supply.

Spying an opportunity for investment, a consortium that included Actis Capital and Goldman Sachs came knocking to pitch Shi on taking the company public. When the company listed on the New York Stock Exchange in 2005, it raised $420m and made Shi an instant billionaire. A year later he would be worth an estimated $3bn and crowned the richest man in China, earning him the moniker “the Sun King”.

Having shown the way, the Chinese PV solar industry began a massive expansion. SunTech alone boosted its production capacity from 60 megawatts to 500MW, and then to 1 gigawatt in 2009. The company grew so fast, its supplies of glass, polysilicon and electronic systems needed to build its panels came under strain, forcing it to invest heavily in local supply chains.

As with the rest of China, the rate of technological development in the PV solar business makes for an industry that builds itself up one day, tears itself down the next, and then remakes itself again the day after. With razor-thin margins and cut-throat competition, everyone is always one step away from falling.

Around 2012 the world market was flooded with solar panels, sending the price plummeting through the floor, leaving SunTech vulnerable. Already under intense financial pressure, disaster struck when an internal investigation found a takeover bid it had launched had been guaranteed by €560m in fake German government bonds.

Upon discovering the bonds didn’t exist, Shi was removed as CEO of his company and a year later SunTech would file for bankruptcy protection when it couldn’t repay a $541m loan that fell due in March 2013.

Whatever befell SunTech later, the Macquarie University emeritus professor John Mathews says the company played a pivotal role in changing both China and the world forever.

In a quirk of history, what had begun as an American drive to wean itself off oil was eventually taken up by China, which made solar power dirt cheap in the process.

“The Chinese approach to renewables is all about energy security,” Mathews says. “At the scale from which they’re building new industries, they would need colossal imports of conventional fossil fuels, which would cripple them economically.

“They can get around that problem, which is a geopolitical obstacle, by manufacturing their own energy equipment.”

Today Green and Shi keep in touch. Both are working on new projects. Shi is overseeing a new company while 72-year-old Green is looking for new innovations to explore.

One such innovation is the stackable solar cell. Though still a niche technology very much in the early stages, the basic idea is to lay a material over a solar cell in order to boost its power output.

“We think a 40% module, rather than the 22% you can do nowadays with PERC, is what the industry will be doing once we perfect this stacking approach,” Green says. “We’re just trying to find a new cell that will have all the qualities of silicon that we can stack on top of silicon.

“The International Energy Agency now says solar is providing the cheapest energy the world has ever seen. But we’re headed towards a future of insanely cheap energy.

“It’s a fundamentally different world we’re moving into.”

After WWII, the Texas Interstate Trade Commission kept the price of oil low.  Together with Keynesianism and pent-up demand from the war years, this led to an unprecedented surge of stable, low-inflation growth, ending only with the first oil crisi in 1973.

The "insanely cheap" energy that solar panels and cheap batteries are going to bring us will usher in a new period of stable, high growth--if we don't blow it.   Cheap energy will allow cost-effective water desalination and purification; cheap factory-grown food; cheap industrial processes, and so on.  Combined with Starlink (and one day, its competitors) this will lead to insanely cheap and fast internet, everywhere in the world.  Add to that the technological forcing function of cheap space flight, and we could see a period of rapid technological, economic and social advance.  

As an aside, many think that the 21st century will be China's.  I think it will be Africa's because of that continent huge advantage in solar.  Already the data show a steady improvement in Africa's growth rate.  Insanely cheap energy will accentuate that.

If we avoid the disaster of global heating--and cheap solar will be instrumental in that--and we don't go to war, the 2020s and 2030s could be a time of unprecedented advance.

Source: Ramez Naam

No new investment in fossil fuels

 From The Guardian

Exploitation and development of new oil and gas fields must stop this year and no new coal-fired power stations can be built if the world is to stay within safe limits of global heating and meet the goal of net zero emissions by 2050, the world’s leading energy organisation has said.

In its strongest warning yet on the need to drastically scale back fossil fuels, the International Energy Agency (IEA) also called for no new fossil-fuel cars to be sold beyond 2035, and for global investment in energy to more than double from $2tn (£1.42tn) a year to $5tn (£3.54tn) The result would not be an economic burden, as some have claimed, but a net benefit to the economy.

Fatih Birol, the IEA’s executive director and one of the world’s foremost energy economists, told the Guardian: “If governments are serious about the climate crisis, there can be no new investments in oil, gas and coal, from now – from this year.”

He said strong new policies were needed from governments around the world: “More and more countries are coming up with net zero commitments, which is very good, but I see a huge and growing gap between the rhetoric [from governments] and the reality.”

To halve the decade-by-decade increase in global temperatures from its current 0.2 degrees, we need to halve emissions.  Renewables are cheaper than the operating cost of coal power, and battery pack costs continue to decline.  So we can do it.  

These are the key steps on that road:

1. No new coal power stations, anywhere, ever again. Starting now.
2. No new gas hot water heaters, starting as soon as possible
3. No new petrol/diesel car sales from 2030.  I believe that EV prices will fall far enough that this will be achievable
4. An end to fossil fuel subsidies
5. A price on carbon

Emissions flat in 2019

From the IEA:

Global energy-related CO2 emissions flattened in 2019 at around 33 gigatonnes (Gt), following two years of increases. This resulted mainly from a sharp decline in CO2 emissions from the power sector in advanced economies, thanks to the expanding role of renewable sources (mainly wind and solar PV), fuel switching from coal to natural gas, and higher nuclear power output.

Global CO2 emissions from coal use declined by almost 200 million tonnes (Mt), or 1.3%, from 2018 levels, offsetting increases in emissions from oil and natural gas. Advanced economies saw their emissions decline by over 370 Mt (or 3.2%), with the power sector responsible for 85% of the drop. Milder weather in many large economies compared with 2018 had an important effect on the trends, reducing emissions by around 150 Mt. Weaker global economic growth also played a role, moderating the increase in emissions in major emerging economies such as India.

Emissions trends for 2019 suggest clean energy transitions are underway, led by the power sector. Global power sector emissions declined by some 170 Mt, or 1.2%, with the biggest falls taking place in advanced economies where CO2 emissions are now at levels not seen since the late 1980s (when electricity demand was one-third lower).

Economic growth in advanced economies averaged 1.7% in 2019, but total energy-related CO2 emissions fell by 3.2%. The power sector led the decline and now accounts for 36% of energy-related emissions across advanced economies, down from a high of 42% in 2012. The average CO2 emissions intensity of electricity generation declined by nearly 6.5% in 2019, a rate three times faster than the average over the past decade. In absolute terms, an average emissions intensity of 340 grams of CO2 per kilowatt hour in 2019 is lower than all but the most efficient gas-fired power plants.

Generation from coal-fired plants in advanced economies declined by nearly 15% as a result of continued growth of renewables, coal-to-gas fuel switching, a rise in nuclear power and weaker electricity demand. The growth of renewables in electricity generation in advanced economies delivered 130 Mt of CO2 emissions savings in 2019. Wind accounted for the biggest share of the increase, with output expanding 12% from 2018 levels. Solar PV saw the fastest growth amongst renewable sources, helping to push renewables’ share of total electricity generation close to 28%. Coal-to-gas fuel switching for power generation avoided 100 Mt of CO2 in advanced economies and was particularly strong in the United States due to record low natural gas prices. Higher nuclear power generation in advanced economies, particularly in Japan and Korea, avoided over 50 Mt of CO2.

The United States saw the largest decline in energy-related CO2 emissions in 2019 on a country basis – a fall of 140 Mt, or 2.9%, to 4.8 Gt. US emissions are now down almost 1 Gt from their peak in the year 2000, the largest absolute decline by any country over that period. A 15% reduction in the use of coal for power generation underpinned the decline in overall US emissions in 2019. Coal-fired power plants faced even stronger competition from natural gas-fired generation, with benchmark gas prices an average of 45% lower than 2018 levels. As a result, gas increased its share in electricity generation to a record high of 37%. Overall electricity demand declined because demand for air-conditioning and heating was lower as a result of milder summer and winter weather.

Energy-related CO2 emissions in the European Union, including the United Kingdom, dropped by 160 Mt, or 5%, to reach 2.9 Gt. The power sector drove the trend, with a decline of 120 Mt of CO2, or 12%, resulting from increasing renewables and switching from coal to gas. Output from the European Union’s coal-fired power plants dropped by more than 25% in 2019, while gas-fired generation increased by close to 15% to overtake coal for the first time.

Germany spearheaded the decline in emissions in the European Union. Its emissions fell by 8% to 620 Mt of CO2, a level not seen since the 1950s, when the German economy was around 10 times smaller. The country’s coal-fired power fleet saw a drop in output of more than 25% year on year as electricity demand declined and generation from renewables, especially wind (+11%), increased. With a share of over 40%, renewables for the very first time generated more electricity in 2019 than Germany’s coal-fired power stations.

The United Kingdom continued its strong progress with decarbonisation as output from coal-fired power plants fell to only 2% of total electricity generation. Rapid expansion of output from offshore wind, as additional projects came online in the North Sea, was a driving factor behind this decline. Renewables provided about 40% of electricity supply in the United Kingdom, with gas supplying a similar amount. The share of renewables became even higher in the later part of the year, with wind, solar PV and other sources generating more electricity than all fossil fuels combined during the third quarter.

Emissions outside advanced economies grew by close to 400 Mt in 2019, with almost 80% of the increase coming from Asia. In this region, coal demand continued to expand, accounting for over 50% of energy use, and is responsible for around 10 Gt of emissions. In China, emissions rose but were tempered by slower economic growth and higher output from low-carbon sources of electricity. Renewables continued to expand in China, and 2019 was also the first full year of operation for seven large-scale nuclear reactors in the country.

Emissions growth in India was moderate in 2019, with CO2 emissions from the power sector declining slightly as electricity demand was broadly stable and strong renewables growth prompted coal-fired electricity generation to fall for the first time since 1973. Continued growth in fossil-fuel demand in other sectors of the Indian economy, notably transport, offset the decline in the power sector. Emissions grew strongly in Southeast Asia, lifted by robust coal demand.

It's clear that the energy transition in developed countries has started.   The growth in renewable generation is now enough to cut emissions from electricity.  If, for example, renewables make up 40% of generation, a 10% rise in renewables output will more than offset the rise in electricity demand.  And this is where most developed countries now sit.  Over the next few years, the rise in sales of cars with an electric engine will start eating into emissions from transport.  So emissions in developed countries should start to fall by respectable amounts, though still not fast enough.

The problem is China and SE Asia.  And here, the issue is diplomatic as much as economic.  Yes, the costs of renewables are falling, to the extent that renewables are as cheap as or cheaper than coal.  But costs are also affected by things like getting permits, policy uncertainty (which raises loan costs and required rates of return) and government support for fossil fuels, especially via subsidies.  It is critical that no more coal power stations be built, yet in SE Asia and China they still are.  This has to stop.  Somehow these countries must be persuaded to stop building coal power stations.  Because it's not enough for emissions to stabilise to stop global temperatures from rising.  They must fall to zero, as soon as possible.

Europe 85% renewables by 2040

IEEFA reports on two different forecasts for the penetration of wind and solar in the European grid by 2040.   One is by the IEA (International Energy Agency).  The Other is by BNEF (Bloomberg New Energy Finance).  The IEA has consistently underestimated the growth in wind and solar.  Whether this is because the IEA was set up to analyse and advocate for fossil fuels or whether it's because of sheer ineptitude I don't know.  BNEF has a much better forecast record, and even they haven't been optimistic enough.  I concede that it is hard to forecast exponential growth, because you don't know at what point growth will slow down to a more normal pace. And small differences in growth rates can make big differences in absolute levels over time.  However, the IEA seems to have no awareness at all that renewables growth is exponential.   I'm not even going to show the IEA's forecasts.  I don't think they're useful at all. 

Here's the chart of BNEF's forecasts.  Wind and solar will reach 66%, hydro about 15% and other renewables 4%-ish (reading off the chart), making a total of 85%.  Surprisingly, they're forecasting that nuclear will still make up around 10% of the mix which will take non-fossil fuels to 95%.  IEEFA doesn't mention it, but the likelihood is that by then even the gas will be made by power-to-gas, i.e., using surplus electricity from renewables to create hydrogen by electrolysis, and then either the hydrogen is used directly, or methane is made via the Sabatier reaction to be used when renewables supply or total demand is too low or too high for batteries/pumped hydro to cope.

If you add the likelihood that the vehicle fleet will be close to 100% electric, Europe will have cut its emissions by at least 60% from today's levels.  In all likelihood the decline will be bigger, because there are other initiatives to reduce emissions--for example, energy saving.