If IEA Says We'll Miss Climate Goals, Why Not Refocus On The Technologies That Work?
- June 20, 2017
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The International Energy Agency (IEA) reports that clean energy technologies are not decarbonizing global energy systems fast enough to stay on track to meet Paris Agreement goals (limiting warming to a 2°C-compatible trajectory in 2025), but the world can still decarbonize in time – if governments maintain strong policy signals.
IEA’s annual Tracking Clean Energy Progress report highlights technologies that are on track for meeting the 2° goals, those that are improving but need more effort, and those that are wholly off-track. Their assessment covers both technology development with policy for deployment: In practice, it is more useful to separate these two, as expensive or unproven technologies cannot be deployed, and thus require serious R&D, while many technologies that are already cost-effective are instead hitting institutional obstacles. Still, the gist is clear.
Because time is of the essence in abating climate change, and starting as soon as possible makes subsequent action cheaper and easier, it is important to take technologies that are ready for, or in, prime time, and really accelerate them. So IEA’s technological roadmap can help show where governments should double down on the technologies that can help secure a safe climate future at the least cost.
Many Core Clean Energy Technologies Are On Track
IEA’s report finds only 3 of 26 technologies are on track to reach a sustainable energy transition: onshore wind and solar photovoltaics (PV), electric vehicles (EVs), and energy storage. These technologies are all rapidly scaling up as their costs decline, and are fast becoming mainstream low-carbon solutions. According to IEA:
- Renewable energy represented more than half of new global capacity additions in 2016, and solar PV and onshore wind are forecast to grow by 2.6 times and 1.7 times, respectively, between 2016-2020.
- More than 760,000 EVs were sold in 2016, pushing the global total to 2 million EVs on the road.
- Installed energy storage capacity reached 930 megawatts (MW) in 2016, with year-on-year growth of more than 60% for non-pumped hydro storage.
As renewables and energy storage technologies advance, they become favored regardless of political preference . Today, building new wind farms or solar arrays from scratch are cheaper in some regions than simply paying the operating costs of an existing coal-fired plant—no subsidy or standard required. And America’s red states are installing wind energy at a far greater pace than blue states.
These trends are evident across the world as well, as most of the world’s nations are prioritizing clean energy in their economic futures. India aims to raise $1 trillion for solar investments, China has already committed $360 billion to renewable energy, and the European Investment Bank has pledged €20 billion annually to clean energy. It’s small wonder, then, that China and the European Union just issued a 10-page manifesto reiterating clean energy as “a main pillar of their bilateral partnership.” And where national governments fail to lead, local government and corporations can pick up the slack: After President Trump withdrew the U.S. from the Paris Agreement last Thursday, more than 1,400 U.S. cities, states, and businesses vowed to still meet the Agreement’s decarbonization targets.
Still, important technologies are not getting the price reductions required, or the scale of installations needed.
Stop Subsidizing Coal To Speed Up Decarbonization
The IEA reports 8 of 26 technologies—starting with the retirement coal-fired power—are significantly off-track and require renewed policy focus to meet 2° targets. IEA cites coal’s 40% share of global power generation, and the need to reduce coal-based emissions by around 3% annually until 2025 for a sustainable energy future.
When coal goes up against renewables on cost, it loses. U.S. utilities keep announcing coal retirements due to economics, and U. S. coal demand is at a 30-year low. India won’t need new coal generation for at least a decade, and China canceled 103 coal plants earlier this year. “Coal is over,” a longtime Chinese government official recently remarked in the New York Times.
Even carbon capture and storage (CCS), long hailed as a coal savior, has stalled. IEA attributes this to a “lack of new investment decisions,” but more likely economic realities are driving decisions. Research by Energy Innovation finds CCS is already two to three times more expensive than wind or solar PV, and will always need significant subsidies.
Coal has entered an irreversible decline, and it will only accelerate as grids become more flexible through the spread of energy storage and demand-management technologies. Governments let fiber optics displace copper, and the internet displace travel agents without histrionics: They need to likewise let coal expire, and avoid subsidies that delay the day of reckoning.
Keep Energy Efficiency At Top Of Mind
Conversely, policymakers should double down on energy efficiency, another of the IEA’s significantly off-track technologies. The report argues that nearly two-thirds of all countries still do not have building energy codes in place, and nearly two-thirds of all energy-consuming equipment is not yet covered by efficiency standards. And since buildings’ energy share—currently one-third of all global energy use—will only increase as incomes rise and cities grow, policymakers must renew their energy efficiency focus.
Well-designed and properly enforced building codes and appliance standards are the only policy proved to deliver large-scale, cost-effective and sustained efficiency gains in the building sector. The key here is continuous improvement of standards over time—start with a strong target, then ratchet the requirements up every few years to inspire new technology and new practices.
53 countries mention energy efficiency in their Nationally Determined Contributions (NDCs) to the Paris Agreement, and 38 specifically target building energy codes—from China and Japan to Afghanistan and Saudi Arabia. As nations begin implementing their NDCs, policymakers will need serious efficiency to reach emissions reduction goals.
Speed and Scale
One of the frustrating elements of climate solutions debates is the favoritism afforded different technologies (or policies). You may hear screeds like, “we need CCS to hit any reasonable carbon goal,” “negative carbon technologies are required,” “only nuclear will solve the problem” or “solar fixes everything.”
But this absolute approach fails the basic economics tests of cost-effectiveness, and the environmental requirement for speed and scale. IEA’s report is useful, but it does not attempt to sieve out speed and scale potential, nor economic limits or accelerants, so it creates a false equivalency between technologies.
The way around this is to deploy what works, hard and fast. Use this deployment to drive down costs, create institutional learning, and build a new political status quo. And at the same time, work hard to usher in a further list of competitive options—low-carbon cement, biofuels, demand response, and so forth—by investing in technology development.
Landing on a not-yet-competitive technology as a sole or primary savior is, however, a recipe for losing. And we cannot afford that.
By Hal Harvey, CEO, Energy Innovation
Photo Credit: Bruce Guenter via Flickr