The top 5 energy trends you need to know about
The International Energy Agency (IEA) has just released its much anticipated World Energy Outlook 2018.
The data acts as a barometer for the world’s progress on carbon. What are the trending metrics within?
1. On carbon…
The IEA reveals that after three flat years, global energy-related carbon dioxide emissions rose by 1.6% in 2017 and the early data suggest continued growth in 2018, far from a trajectory consistent with climate goals.
This is concerning information given the key to a sustainable global economy is decoupling economics from carbon intensity.
The damning evidence means there is no opportunity for corporates to relax on carbon. If anything, further emphasis on energy efficiency and the continued lobbying of administrations are more urgently needed.
2. Energy risks remain
The IEA assessment is also sobering on energy security. It argues that risks to oil and gas supply remain, as Venezuela’s downward spiral shows.
It adds that one-in-eight of the world’s population has no access to electricity and new challenges are coming into focus in the power sector, from system flexibility to cyber security.
The UK remains one of the countries at risk from energy security, given the tardiness of our new nuclear fleet rollout and the reliance of our shores on imported gas.
The watchword for business; build in your own resilience with smart energy systems and efficiency measures at pace.
3. Government is key
According to the IEA, government policies will shape the long term energy agenda. They will play a crucial role in shaping the pace of energy efficiency improvement and technology innovation.
The UK is playing its part – mandatory energy reporting schemes such as ESOS and SECR are putting low carbon on the Board agenda of many firms across the UK.
Rapid, least-cost energy transitions require an acceleration of investment in cleaner, smarter and more efficient energy technologies. But policy makers also need to ensure that all key elements of energy supply, including electricity networks, remain reliable and robust.
None of this will be new to those familiar with our sector; we call this the energy trilemma. What is interesting is the IEA analysis says more than 70% of the $2 trillion required in the world’s energy supply investment each year, across all domains, either comes from state-directed entities or responds to a full or partial revenue guarantee established by regulation.
4. Can we handle our juice?
A much stronger push for electric mobility, electric heating and electricity access could lead to a 90% rise in power demand from today to 2040, compared with 60% in the IEA New Policies Scenario, an additional amount that is nearly twice today’s US demand.
This is a concern because the UK energy grid remains ill prepared for such trends, and there is the further impact of electric vehicles policy to consider, which may hasten changes here given forthcoming bans on fossil fuel vehicles.
From a business perspective, early adoption may be key to enabling preparedness and flexibility in terms of how tomorrow’s juice flows, and building the risks into sustainable business planning seems key.
5. Coal is old news
Coal use rebounded in 2017 after two years of decline, but final investment decisions in new coal-fired power plants were well below the level seen in recent years. Once the current wave of coal plant projects under construction is over, the flow of new coal projects starting operation slows sharply post-2020.
For anyone interested in sustainable business, this must be good news.