It’s not everyday that the Washington Post features India in headlines, so when on Diwali day, that happened in the context of publication of International Energy Agency’s World Energy Outlook 2015, it was noteworthy. The IEA report has worrying conclusion that the world won’t be able to limit warming to 2 °C even if all the pledges (INDCs) submitted in advance of Paris Summit get implemented, “The (global) emissions trajectory implies a long-term temperature increase of 2.7 °C by 2100. A major course correction is still required to achieve the world’s agreed climate goal. As the largest source of global greenhouse-gas emissions, the energy sector must be at the heart of global action to tackle climate change.”
The IEA report has special focus on India as the largest additional emission contributor to 2040, though it does not have a word about the developed countries’ huge current and historical contribution to the problem, nor does it recommend the need to reduce consumption levels of the developed countries from current unsustainable levels.
Global Outlook highlights The new report provides various scenarios of global energy outlook to 2040. Some important global outlook highlights of the report:
- Renewables contributed 130 GW, almost half of the world’s new power generation capacity in 2014 and have already become the second-largest source of electricity (after coal). Renewables will overtake coal as the largest source of electricity by the early 2030s.
- The growth in energy-related emissions slows dramatically as per the central scenario of the outlook. There was also a tantalising hint in the 2014 data of a de-coupling in the relationship between CO2 emissions and economic activity, until now a very predictable link.
- CO2 emissions from power generation are set to grow at only one-fifth of the rate at which power output rises to 2040 from 1:1 relationship in last 25 years.
- Energy use worldwide is set to grow by one-third to 2040 in our central scenario, driven primarily by India, China, Africa, the Middle East and Southeast Asia.
- China is World’s largest emitter today. China’s emissions will continue to grow, though at flatter rates, and peak by 2030 and then decline.
- Collective consumption of OECD countries continue to decline since 2007. Declines are led by the European Union (-15% over the period to 2040), Japan (-12%) and the United States (-3%).
- Coal has increased its share of the global energy mix from 23% in 2000 to 29% today but the momentum behind coal’s surge is ebbing away. The fuel that met 45% of the increase in global energy demand over the last decade meets only around 10% of further growth to 2040, largely due to a tripling in coal demand in India and in Southeast Asia. Consumption in the OECD, where coal use faces strong policy headwinds, is projected to drop by 40% over the same period.
- The share of coal in the global electricity mix drops from 41% to 30%, with non-hydro renewables gaining a similar amount, while gas, nuclear and hydro broadly maintain their existing shares.
- Renewable sources of energy With 60 cents of every dollar invested in new power plants to 2040 spent on renewable energy technologies, global renewables-based electricity generation (this includes large hydro and possibly nuclear) increases by some 8300 TWh.
- The IEA report advocates subsidies for non hydro renewables: “A 50% rise in subsidies, to an estimated $170 billion in 2040, secures a five-fold increase in generation from non-hydro renewables. The share of non-hydro-renewables that is competitive without any subsidy support doubles to one-third.”
- “The net result is that energy policies, as formulated today, lead to a slower increase in energy-related CO2 emissions, but not the full de-coupling from economic growth and the absolute decline in emissions necessary to meet the 2 °C target… More can be done, at no net economic cost, to bring about a peak in energy-related emissions by 2020 – an essential step if the door to a 2 °C outcome is to remain open”.
India: Centre of the World Energy Stage The latest IEA report has major focus on India, it says: “India seizes the centre of the world energy stage”. This section highlights:
- India contributes the single largest share of growth, around one-quarter, in global energy demand from now to 2040.
- Coal The increasing demand for coal will make “India by a distance the largest source of growth in global coal use. Oil demand increases by more than in any other country, approaching 10 mb/d by the end of the period… The expansion of coal supply makes India the second-largest coal producer in the world, but also, already by 2020, the world’s largest coal importer”.
- Third largest economy of India today uses 6% of world’s energy use and 240 million people lack access to electricity.
- Additional 315 million to live in cities in India by 2040.
- It rightly acknowledges that in India there is “uncertainty over the pace at which new large dams or nuclear plants can be built”.
- India needs “estimated $2.8 trillion of investment in energy supply to 2040. Three-quarters of this investment goes to the power sector, which needs to almost quadruple in size to keep up with projected electricity demand.”
- An interesting observation of IEA report is: “A rapidly expanding energy sector could exacerbate already serious challenges with water stress”.
This projection (that India needs to quadruple electricity installed capacity), though seems uncritical acceptance of Government of India’s figures and is unlikely to be true, the need is much lower, considering the current power scenario in India, huge potential in decreasing losses, increasing efficiency of use and promise of reduced GDP intensity of growth. The report also does not seem to advocate rooftop solar, which has a huge untapped potential, with much lower social, environmental and economic investment need.
IEA biases IEA has a very pro western countries/ developed countries bias. So it keeps saying throughout the report how major increase in future energy use and future growth of emissions is going to come from developing countries led by India, without mentioning that currently and historically, it is the developed countries that are the biggest consumers of energy and biggest emitters of GHG gases and biggest reason for the current climate change.
IEA also seems blind to the environmental or equity or social justice issues, so it includes large hydro & possibly nuclear among the renewable sources of energy and assumes that significant part of the future non carbon based electricity generation will come from large hydro.
In Conclusion: N Sreekumar of Prayas Energy Group sums up well: “I think IEA’s warning that there is no place for complacency is right. The fact remains that India and China (to limited extent) will witness high energy consumption growth. Just because oil prices have gone down for the moment, one should not make long term decisions based on that. As WEO says, it is important to focus on renewable and efficiency. If their renewable includes large hydro (or nuclear), it needs closer examination. Also, growth in energy consumption is essential to reduce poverty in developing countries. One needs to check if the detailed WEO report supports this, especially considering the historical role of Western countries in creating today’s climate challenge.”
IEA’s pro-OECD bias may be natural since it is part of OECD, but if it wants greater credibility for its reports and recommendations, may be IEA should also prominently mention that OECD has been the biggest contributor of the current and historical emissions and for any credible solution to the problem, the OECD countries need to make much greater contribution in reducing emissions. Also since climate change is essentially environmental crisis, to ignore huge environmental impacts of large hydro is clearly not going to be credible. Large hydro is false solution to climate change and it would be good if IEA were to highlight this upfront in their future outlooks.
 IEA is an autonomous agency, was established in November 1974. Its primary mandate was – and is – to promote energy security amongst its 29 member countries, as per its website. The 29 members include US, Canada, Japan, Korea, New Zealand and Australia, rest are European countries.
 This blog is based on reading of following material, full WEO report is not available free in public domain: http://www.iea.org/newsroomandevents/pressreleases/2015/november/low-prices-should-give-no-cause-for-complacency-on-energy-security-iea-says.html, http://www.iea.org/Textbase/npsum/WEO2015SUM.pdf, http://www.worldenergyoutlook.org/media/weowebsite/2015/151110_WEO2015_presentation.pdf,