The International Energy Agency has always built its authority on policy. Its World Energy Outlook models are maps of intent: what governments say they will do, not necessarily what markets or industries are already doing. That worked when energy transitions moved at a bureaucrat’s pace. But today, the engine of change is industrial, not political. China — through sheer manufacturing scale and global electrification reach — is driving a transformation that the IEA’s scenarios struggle to capture.

The agency dropped APS from the World Energy Outlook 2025, saying that national commitments are too uneven to model reliably. Instead, it focused on the Current Policies and Stated Policies Scenarios. In effect, the IEA narrowed its gaze to a future far more friendly to oil and gas. A world that changes, but only as fast as formal policy permits. Yet the real world is moving faster, driven not by pledges but by production lines and industrial policy.

China: The Electrifier-in-Chief

Over the past decade, China has fused state planning, industrial finance, and scale to build the world’s most powerful clean-energy ecosystem. In 2024 alone, it sold 12.8 million New Energy Vehicles and exported 1.3 million more. It now accounts for roughly 60 percent of all new renewable capacity installed globally each year. Its solar panel manufacturing capacity will soon exceed the United States’ total electricity demand.

This is not just an energy story; it is an industrial one. Chinese automakers — BYD, SAIC, Geely, Changan — are flooding the Global South with affordable sub-$20,000 EVs, the ubiquitous two- and three-wheelers, bundled with charging networks, battery-recycling plants, and joint-venture factories. Beijing’s “industrial diplomacy” is electrifying emerging markets in the way Western aid once sought to wire them for fossil fuels.

The IEA sees policy diffusion as the main driver of energy transitions. China shows us something else: industrial diffusion. What the IEA calls “infrastructure limitation” in Africa, Southeast Asia, and Latin America is being dismantled by Chinese capital, logistics, and engineering. Electrification is becoming an export commodity.

The Physics of Scale

The story that the IEA’s model misses is not ideological; it’s arithmetic. Every doubling of cumulative solar production cuts costs by about twenty percent; every doubling of battery output by roughly eighteen percent. Those learning curves compound faster than politics can keep up. In 2010, a battery pack cost over $1,000 USD per kilowatt-hour; by 2023, $130. By 2030, it may hit $60. Solar module prices have fallen by over ninety percent since 2010.

Once parity arrives, substitution accelerates. Each ten million EVs on the road displaces around half a million barrels of oil demand daily. At projected adoption rates, that’s the equivalent of erasing an entire Saudi Arabia of oil demand within a decade.

This is the industrial feedback loop that OPEC, ExxonMobil, and the U.S. Energy Information Administration have consistently failed to model. Their scenarios assume hydrocarbons’ dominance and treat innovation as exogenous, a polite way of saying “someone else’s problem.” The IEA broke from that orthodoxy with the APS, which embedded learning curves and cost feedback. Yet by retreating from APS in 2025, the agency risks losing sight of the very dynamics that once made it the gold standard.

The Global South’s Leapfrog

Look beyond Beijing. Across the Global South, Chinese-financed solar farms, grid-stabilization projects, and electric-mobility programs are rewriting development logic. In Kenya, rooftop solar is offsetting diesel generation. In Brazil and Indonesia, low-cost Chinese EVs are scaling faster than policy incentives can track. In the Middle East, Chinese firms are co-building battery-storage complexes once thought decades away.

This diffusion matters because it shifts the geometry of the transition. For decades, energy modernization flowed North to South. Today, it runs in reverse. China’s overcapacity — derided in Western policy circles — is accelerating global deployment by forcing prices down. The IEA’s models, calibrated to declared policies rather than industrial momentum, under-represent this structural feedback.

Capital Flows Tell the Truth

Follow the money. Global clean-energy investment surpassed $2 trillion USD in 2024 and continues rising about 6–7 percent annually. Fossil-fuel investment, meanwhile, has plateaued or declined. Capital allocation now looks more like APS than like the new CPS (Current Policies Scenario), or even the still conservative Stated Policies Scenarios (STEPS). Markets are already betting that electrification, not hydrocarbons, defines the mid-century energy mix.

If the IEA’s CPS and STEPS project fossil demand growth into the 2040s, they describe a world that capital markets have already abandoned. APS aligns more closely with where investors are placing real money — grids, storage, batteries, renewables, and electrified transport.

The Model and the Machine

What’s unfolding is a divergence between two kinds of forecasting: the model built on policy, and the machine built on production. The model counts regulations; the machine multiplies learning. The IEA’s WEO 2025 treats electrification as an outcome of government intent. But China’s industrial ecosystem shows it is increasingly a self-propelling system — feedback, not fiat.

This is not to diminish policy. Without it, China’s ecosystem would not exist. But policy there functions as scaffolding for industry, not a ceiling. The IEA’s omission of APS makes sense within its institutional DNA; it reflects what can be officially promised. Yet it leaves unmodelled the real-world force now shaping the transition: manufacturing momentum.

The Consequences for Analysts and Policymakers

For analysts, the lesson is simple: the energy transition is being built, not legislated. The baseline for understanding it is no longer the pace of policy but the speed of industrial learning. For policymakers, particularly in countries like Canada still investing billions in hydrocarbon expansion, the implication is brutal. The world is electrifying faster than you can permit a pipeline.

The APS still fits the facts because it embeds the physics of feedback. The IEA may have stopped publishing it, but China is still proving it — one gigafactory, one grid, one EV fleet at a time.

The post WEO 2025: China’s Electrification Outruns the IEA’s Imagination appeared first on Thoughtful Journalism About Energy's Future.

Summary: Markham interviews Heymi Bahar, the International Energy Agency’s senior analyst for renewable energy markets and policy and lead author for “Renewables 2020 Analysis and forecast to 2025.” Correction: the study was released on Nov. 10, not Nov. 17 as Markham says at the start of the conversation.

Related links:

1. Renewables 2020 Analysis and forecast to 2025
2. Move over Alberta gas, wind and solar now the cheapest form of energy – video interview with Dr. Blake Shaffer, University of Calgary
3. EV batteries, wind and solar, and the Netherlands power grid – video interview with Baerte de Brey, with ElaadNL, the Netherlands knowledge and innovation centre in the field of Smart Charging
4. Canadian energy experts prefer wind, solar – study – video interview with Dr. Tom Green, David Suzuki Foundation
5. Texas power outages due to frozen natural gas infrastructure, not wind turbines – video interview with Dr. Joshua Rhodes, University of Texas at Austin

This interview has been lightly edited.

Markham Hislop: Welcome to another episode of Energi Talks, the podcast where we discuss global energy issues and trends with experts from around the world. I’m going to be discussing the International Energy Agency’s 2020 renewable energy study (released Tuesday, November 10, 2020) with lead author Heymi Bahran, who is based in Paris. He’s the IEA senior analyst for renewable energy markets and policies.

Let’s start with an overview of your study.

Heymi Bahran: The study looks at the forecast for renewables in three sectors – electricity, heat, and transport – all of them equally important. And the main result of the forecast shows us a very positive development for renewable electricity and how it deals with the [climate] crisis.

We basically found that renewables in electricity are resilient, almost immune to the crisis [COVID-19 pandemic] compared to other fuels. This is the opposite trend because while renewables in electricity generation is expecting to be reduced by 7%, overall other fuels are expected to decline in 2020.

The second point is that not only that renewable generation will grow, we also look at new edict capacity to the system. So new plants, we also found out that that also is going to increase, which means that the expansion rate of renewables will continue to increase. We expect about 200 gigawatts to be installed, this year of renewable plants, including all renewables. And this is an incredible development because it accounts for about 90% of the increase in global electricity capacity, which is making up a lot of the share, which is quite important and proves the resilience.

Markham Hislop: Now a couple of weeks ago, I had American economist, Tony Seba on the podcast, and he had put out a study in which he forecast that by 2030, the combination of wind solar and battery storage would drive the price of electricity so low that renewables would be adopted much faster than we expect. Is your study consistent with that conclusion?

Heymi Bahran: A very good point.

We expect solar PV capacity continue to increase over time in the coming five years. We also do two cases, main case and accelerated case. And it looks at the challenges that renewables face today, country by country in the main case, and then looks at how those challenges are met, if they are met, or what does the world may look like?

In our accelerated case, we see both wind and solar capacity to increase for solar view, we expect in both cases to grow as you indicate, however, we need to differentiate wind and solar here.

I think it’s an important point and why solar is much more in advantage than wind because globally wind plants, especially onshore wind plants. I’m sure it’s a problem in Canada as well. They are facing social acceptance issues because of their height because of how they are located. This is true everywhere in the world, and that’s why this affects delays in the construction problems in the permitting and so on and so forth.

Solar is the opposite side where there is no height. There is no basically size problem because you can install an off-grid in a mining facility in Canada, which is completely out of the grid, very small scale, but you can also include a 300, 400 megawatt scale projects.

So between those you attract incredible amount of investors, an incredible amount of sources of investment. That’s why solar PV is usually the more advantages and our numbers show that solar PV will almost grow double the size of wind, because of these facility.

Despite the fact that it’s not maybe cheapest option in many countries, investors can build solar PV plants much faster than wind plants today.

Markham Hislop: I was reading a Wood Mackenzie study on solar PV costs between now and 2030, and they were forecasting still a fairly significant drop in costs over the next decade. Is that consistent with what you found?

Heymi Bahran: Yes, very consistent. We see that solar PV costs in the next five years to decline by a quarter again and wind cost by about 10% to 15%. Obviously, continuous cost declines will make wind and solar more and more competitive. And already today, if you want to build a new electricity plant in the world in significant majority of the countries, you will see that wind and solar are cheaper. So that’s the first statement.

The second statement is that in more and more countries, it is becoming comparable to existing cost of fossil fuel generation. So which means that if you have costs about $30 per US dollars for solar PV generation wind generation, which we see these numbers around in the new contracts, this is equal to operating cost of coal plants in some countries. So we are entering into a new era I will say, where not only for new generation renewables are cheaper, but it’s slowly, it will be comparable and lower than existing generation.

Then you see a completely a different world.

Markham Hislop: Now Seba’s argument is that the cost of renewables, particularly solar combined with battery storage, which then makes it competitive with coal in terms of dispatchable power, potentially anyway, are we seeing that combination of wind and solar with batteries being competitive with existing generation now? Or is that something we’ll see in five years or 10 years

Heymi Bahran: Combined with batteries? Now that’s difficult to argue because with today’s costs but definitely if you take into account the historic development of battery cost reduction and solar PV cost reduction, obviously in the next 10 years. I don’t know exactly when and how you will very well see in some countries, this combination is cheaper than fossil fuel alternatives.

Markham Hislop: Does your analysis take into account the recent announcements by Tesla? For instance, Elon Musk had a battery day a month or two ago, talked about some of the engineering advances, such as dry coating of nodes that would drive down the cost and drive up the energy density of batteries, lithium ion batteries. And I think he was talking, you know, 2024, we’d see $57 a kilowatt hour, which is a tremendous decline.

Have you taken those kinds of calculations into account in your analysis?

Heymi Bahran: We do not forecast batteries in this report. So that’s the first point to make however batteries will play more and more role. And we do basic projections for batteries in the longterm.

But that’s why we are the forecast in this case looks at just renewables. And in some cases increasingly they will be combined with not only due to the scale, but also at a residential scale behind the meter in multiple countries. So we follow this trend, but overall, if you look at the overall renewables growth in wind and solar growth in the next five years batteries will be a small share of this because most of the plants in the world will be driven without battery storage facilities, including in the United States and Canada because currently battery costs does not allow today.

And the next two to three years, this kind of a big competitive advantage, batteries are growing mostly in places where there are subsidies such as Korea, such as Japan, such as some parts of the United States. So where you have also Australia, you have investment subsidies given to batteries. They grow there very fast currently though without the subsidies, the growth of the batteries is currently quite limited, I will say.

It will come definitely in the next five years,

Markham Hislop: We know that countries around the world are adopting a stricter climate policies, including carbon pricing. What role does that play in the adoption of wind and solar?

Heymi Bahran: So currently we looked at every single policy that drives the wind and solar project in the next five years in our forecast. We categorize the forecast by policy and obviously with the existing carbon pricing schemes the impact is very limited, either the price is too low or there are other policies that stimulate renewables much faster, such as auction schemes. For instance those that were implemented in Quebec at the time and in Ontario similar ones that those auctions that you open a competitive bid and you accept bids.

We expect that about 40% of the wind and solar growth will come from these auction schemes, which are not relevant to the carbon prices because it’s a separate policy. And we expect an increasing number of wind and solar plants growing outside of carbon pricing schemes, such as feeding tariffs auction.

We call them corporate PBAs, which means which means that companies are willing to buy renewable power and sign bilateral contracts. So this is an increasing trend that we will see, but also on top of that, we will see merchant plants, which are going to basically in the face of, in the face of the merchant plants, running on the wholesale electricity markets.

And also on top of that, we will see a combination of those sources where companies are bidding into an auction, some part of their output going to the spot market to raise other output and signed bilateral contracts. So this is very important to highlight in our analysis, shows that in the next five years, 15 to 20% of wind and solar will be outside of common policies, either these bilateral contracts, which shows the maturity of the industry, where the developers who like to take more risks, not to rely on policies. And this is obviously a game changer in the renewable world because it used to be on the line policies, but we expect more and more companies to be invest in renewables outside of this Commonwealth schemes, which is a good deal.

Markham Hislop: One of the areas I’ve been reporting upon and researching recently is electricity market reform. And that would seem to be consistent with the point that you’re making here. We’re seeing jurisdictions like Alberta in Canada, for instance, that has done pretty good work around that. And that will aid the adoption of wind and solar. And we’re seeing the same thing in the U S, what’s the electricity market situation outside of North America and are electricity markets being reformed and changed in response to the rapid adoption of renewables.

Heymi Bahran: This is a very, very good question. And you’re pointing to a very important issue. The second largest or third largest challenge that renewables will face in the next five years is good integration.

This is not a technical issue only. It’s also about how the market designs enable wind and solar to operate in a better way in an optimized way to the system. And you cited very good examples around in North America. Alberta did a very good job or last year by reducing the time in the spot market, which helps a lot for renewables.

The same thing happened in our Arcot. It’s 15-minute intervals that the market is running in Europe. We are seeing these kinds of developments very fast, but Europe is a bit lucky because all the countries are interconnected and the markets are single. So the products are completely aligned in, especially the balancing markets products.

So, which is very quick where this is happening in a slower extent, which we will see in the next five years, big reforms are happening in Japan. Very important in Korea, very important in China started some provinces which will be done at a national scale, hopefully in the coming five years also in India.

There are very small spot markets in the examples that I give, but we are going towards this direction to reflect in the markets value of the wind and solar.

We are not talking about any more levelized cost of energy – the comparison that I gave to you in your first question, if they are cheaper or not. Actually, this will become irrelevant in the coming years because we need to look at the value that brings into the system, which is a different calculation. And in order to extract this value, just to give you a very good example, if you have in the middle of the day, a huge solar energy coming in the value of that energy declines, because if there’s too much of it so we need to find products in the spot market in the wholesale market that reflects this new value.

This is a million dollar question in the world. So there are very good examples as you described to enable them to operate better.

But the examples of the reflecting, the real value, also the value of the storage is a million dollar question right now that everybody’s trying to find out because electricity markets are not designed that way. They’re designed on a marginal cost basis, rather than this kind of a renewable zero margin cost basis. I think we will see a lot of innovations on the regulation on market design in the coming years.

Markham Hislop: One of the questions I’m very curious about – I confess that is not showing up in my reporting so I don’t have even an informed opinion – and that is how countries whose economies are still developing and maybe Africa would be an example: whether they will do with electricity, what they did with telecommunications. Instead of building this complex infrastructure from the ground up or expanding what they have, and they’ll simply go into micro grids and virtual power plants and all sorts of other options that are lower costs because the technology enables it. What’s your take on that?

Heymi Bahran: This is a very good question. And we call this a question for years ago, whether Africa will leapfrog on this, on this. And it is, we see an incredible innovation in Africa in terms of first to replace or combine diesel generation with solar PV and batteries. So this is no brainer. There is no question about cost here.

The day that you will install solar PV and combine it with diesel generation, you start saving money from diesel. No question. And the return rate of this is two to three years in Africa. It’s quite simple.

Whether you will be able to find the money to invest in new solar PV plan, that’s the biggest question. So that’s a separate discussion. That’s the first thing that that is happening. So when there is availability of funds in Africa, we see diesel combined with solar PV in hospitals, in public buildings and so on and so forth in order to do that, that’s the first part.

Second part, there’s a huge business innovation on the off-grid sector, where there is no grid available, and the grid will probably not come to those areas. In those areas there is an incredible innovation of pay-as-you-go systems where you basically don’t pay anything for the investment and you pay while you use it. So this is a pure business innovation that is happening. So, which is very, very good.

The third one is industries where the mining sector in Africa, for instance, they already are using solar PV and combined with diesel which is an important development. The leapfrogging is happening on the off-grid side, but not only that, it’s also happening on the normal utility scale side. So Africa is building more wind than solar than anything that you can imagine.

Compare relative terms, obviously still, we are talking about very small numbers, but if you look at what they built, they mostly built, which is good, but we need to talk about the challenges. Obviously financing remains an important challenge and the planning of the grid is basically an extremely important factor because sometimes the investors will like to build a renewable microgrids, but they do not know whether the grid will come there in two, three years, then their investment will go sunk, obviously, right?

So we need to obviously take that into account these other regulatory problems.

Markham Hislop: Well, I’d like to expand on that issue, just a little bit, Heymi. When new technologies are adopted, we use the S-curve to explain how they get adopted over time. And one of the things we know is that as technologies drop in price and as they get a bigger and bigger market share, there are always obstacles to adoption that are non-cost related. And you mentioned some of the policies or you know, existing infrastructure sunk costs. There are all sorts of these of barriers to adoption that have to be overcome.

In your opinion, sort of looking at the global perspective, what might be the top three barriers to the adoption of more and more renewables?

Heymi Bahran: So if you look at the non-cost barriers, I will say the first and foremost, the most important challenge is policy uncertainty. We still see a lot of countries not providing a clear policy guideline, a clear regulatory guideline for renewables, for most wind and solar. So that is the first problem.

The second one is permitting and social acceptance. So how these permitting structures are established, and this is especially a big challenge for wind projects, especially onshore wind projects. And obviously the cost is not an issue anymore, but how we manage as a society the acceptance of these plants. And we cannot simply think about wind plants, as you can just not simply build them, whatever you want. You need a structure for that, and you need to inform the society and involve them in the decision making process. This is a big challenge that we see that is everywhere now, including in emerging countries, by the way.

So you see wind plants being delayed for years and years because of this because developers and government did not take that into account that it’s important to involve the community in advance of this. Canada actually has very good examples of is involving the communities in the beginning of the project level. This is the second largest one.

The third one is available finance. This is not cost related. It may sound cost related, but how the financing, especially emerging markets switch from investing in something else to renewables is a big question, a big challenge. And the question that we are working at the IAA, how we can promote and show that finance community, that this is actually an area that investment should go for the climate change and further reasons.

Markham Hislop: I think most of us will remember that in January BlackRock Inc.’s Larry Fink, CEO of the largest asset management company in the world, sent out a letter to CEOs and said that from here on out, climate risk is driving the allocation of capital. And it would seem like that that trend would favor wind and solar and renewables.

Do you think then that the larger trends that Fink was talking about will help to overcome some of these issues that you mentioned on the finance side?

Heymi Bahran: I think we are at the crossroads and the world is going as of this year more towards the renewable side. The example you gave is very important about the corporates wanting to invest more on renewables, but over the last, I will say three to four months, we saw a very large number of countries very large energy consumer countries, and announcing net zero targets. So these include China, Japan, Korea. We are talking and European union.

If you add those four together we are talking about a very important chunk of energy demand globally. This gives the policy movement. So we know where these countries would like to go. And on top of this, you have obviously a new US administration propose bills are also going towards that direction. We do not know obviously how they will implement it, those are uncertainties, but still, if you look at the direction of policy proposal of the new US administration, you see that they will go towards that direction too.

So if you had United States on top of this, you have basically the largest consumers in the pot of net-zero, which means the crossroads that I described is going slowly towards renewables.

And I think this will affect the financing community. And also over the last six months, we saw several banks announcing that they will stop financing coal in their portfolio, new coal, I will say. And this is also an important decision. I’m already world bank two years ago said that unless it is a critical for energy access or on a basis that they will assess they will not invest in finance coal plants in the world, which is a very important decision as well.

Markham Hislop: I’d like to get your response to some of the work that I’ve done. I’ve written a document called the energy declaration, I call it the optimistic and moderate vision for Canada’s energy future, but it applies outside of Canada. And my basic hypothesis is that the future is electric that somewhere down the road, mid 21st century or later, depending if you’re like Vaclav Smeal or not, the primary energy of the global economy will be electricity. What isn’t electric will be hydrogen or biofuels, something like that. The electricity provided by renewables will gradually supplant oil, gas, and coal. And the question now really is not, if it will happen, the question is when it will happen.

What’s your general response to my argument?

Heymi Bahran: So last year we had a slide that we put together and the title of that slide was, “The Future is Electric.” So it was totally in line with your previous reporting.

In 2019, only 20% of global energy consumption was from electricity. The rest was heat processes from industry and buildings or heat use, and the rest is transport. So when you look at the energy system, obviously there are easy to electrify sectors, and there are difficult electrify sectors.

But the timeframe that you gave, I will agree with you that there’ll be a lot of electrification happening.  First of all, industrial processes, those that can be electrified will be electrified soon, especially with assets direct use of fossil fuel assets is getting aged in many countries, so they need to replace anyways.

The investors will ask the question, whether they should replace it with electric or direct use. So I think the efficiency that electricity provides is quite important to those processes in several cases. So I think those will be done, raw transport, definitely. I mean, this is a no-brainer already today that we see that will happen.

The question is that what are those difficult to electrify sectors like transport aviation, especially long haul aviation, where obviously hydrogen is being tested and can be used, but there are still many questions.

Where you cannot electrify some of the very energy-intensive sectors,  we think that renewable waste can be used extensively in some of these sectors, especially the cement sector. We propose that the potential is amazing to use waste in cement and, but there will be a lot of different choices, but I will agree with your argument in the longer term that most of the things will be electrified. Those are not, hydrogen can be the vehicle. That will be done. Obviously, hydrogen produced from renewables.

Markham Hislop: Just final question now and again this is responding to something that is a part of my hypothesis: that the energy transition is driven now primarily by technology change.

Some people still argue that it’s all subsidized and driven by policy. It is not. That might’ve been true for the first two or three decades of the energy transition because when you have a pump that you want to get going, you have to prime it. And so the priming, it took place over two or three decades, but the priming is mostly done.

Now, the new energy technologies are lower costs. They have all sorts of value in other ways like less pollution and fewer GHG emissions, all of that. And that really it’s the accelerating pace of technology change that will be driving this forward.

And the metaphor that I use is that the energy transition is the bus and the climate policy is the accelerator pedal. If you want the bus to go faster, you press harder on the accelerator pedal.

What’s your take on that general view of technology driving the energy transition?

Heymi Bahran: So obviously the technology will be the main driver. But also the perception change, I think is very important.

So we did a little bit of research, this year’s report and show that oil majors are also entering into electricity field quite fast. Their installed renewable capacity, mostly wind and solar will increase by eightfold in just five years. So this is an important number that they are becoming, not an oil company, but an energy company per se. So that’s the first point.

The second point is that technological disruption is changing the way that many companies see the world. For instance, you see that many oil retailers are entering into the electric charging business in their portfolio, which is quite important.

I think and also many utilities are becoming energy service companies. So we see oil majors becoming energy companies, utilities becoming electricity service companies, which means combining two very important pieces of the transition. One is energy efficiency. The other one is renewables. So they combine these two and try to exploit the technology options and making a business case out of it. This is happening today at a slower pace.

I think I agree with you that this will basically increase very fast in order to make the transition happen. Faster and technology will be at the heart of this.

Markham Hislop: One final question, because I can’t, I can’t let you go without asking you. I’ve had experts over and over again. And I think this is absolutely right. The 2020s is the decade When many of these technologies hit their inflection point on the S curve. We are set for the 2020s to be the disruptive decade of the energy transition. And we will see rapid disruptive change between now and 2030. In fact, we’ll look back from 2030 on 2020 and marvel at how much has changed in just 10 years.

Would you agree with that?

Heymi Bahran: Agreed a hundred percent. No question. I agree. Definitely. This is 2020 to 2030 is critical for the energy transition change a hundred percent.

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IEA Executive Director discussed United States’ role in global oil, gas markets

Dr Fatih Birol, the Executive Director of the International Energy Agency, met bilaterally with US Secretary of Energy Rick Perry today before testifying before the United States Senate on the IEA’s latest findings on global energy markets.

Dr Birol and Secretary Perry discussed how the United States is playing a growing role in oil and gas markets across the world, deploying solar and wind power domestically, and pushing clean technology deployment including CCUS.

Their meeting was followed by a joint press conference on US and international energy markets.

On Capitol Hill, Dr Birol testified before the Senate Committee on Energy and Natural Resources under the chairmanship of Senator Lisa Murkowski and with ranking member Senator Joe Manchin.

The hearing focused on prospects for global energy markets, and the role of the United States. This is the third year in a row that Dr Birol has testified in front of the committee. [His testimony can be found here.]

Dr Birol then gave a speech at the US Department of State on the IEA’s modernization and developments in global energy markets to members of the diplomatic community.

The event, which was attended by representatives from members of the IEA family, took place in the Loy Henderson Auditorium. The room was the historic site of the Washington Energy Conference, held in February 1974, which was a first key step in establishing the International Energy Agency later that year.

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Paris Agreement adopted as a “rulebook” at COP24

This article was published by the International Energy Agency on Jan. 25, 2019.

In the late evening of December 15 2018, the gavel came down on the 24^th Conference of Parties (COP) in Katowice, Poland, with the President of the conference leaping over the dais in celebration.

The outcome of COP24 was heralded by many as a success in multilateralism and diplomacy, and the adoption of the Paris Agreement “rulebook,” a set of rules and guidelines designed to bring the Agreement to life, was no small achievement.

But how does this achievement translate to energy systems in the real world? What signals does it transmit to domestic policymakers and energy sector investors? We outline five key takeaways of COP24 for the energy system and energy transitions.

1. A positive step forward for multilateralism on a common path forward

Consensus agreement on the 133-page Paris Agreement rulebook by almost 197 Parties (196 countries and the EU) represents no small feat in multilateralism.

One particular success was the emergence of a single set of transparency guidelines for all countries to report and review information, such as their latest greenhouse gas emissions and progress towards meeting their Nationally Determined Contributions (NDCs, representing national pledges to address climate change under the Paris Agreement).

This approach represents a notable shift away from the existing “bifurcated” approach whereby industrialized and developing countries have different reporting and review obligations, though it still provides flexibility for developing countries who lack capacity.

The collection, reporting, and review of energy and emissions data are fundamental to tracking and driving progress of energy transitions and are also at the core of IEA’s work. The new, enhanced transparency framework negotiated in Katowice reflects a positive step in bringing all countries under a single, robust system, while allowing flexibility to those who need it.

One element of the Rulebook that has yet to be agreed upon regards market mechanisms, covered by Article 6 of the Paris Agreement. Negotiations on this topic will continue through 2019.

2. A call for ambition: energy transitions are underway but must be urgently accelerated

Inspiring stories of energy transitions from all corners of the globe were heard around COP24: Iceland now generates 100 per cent of its electricity from renewable sources, China forges ahead with the world’s largest emissions trading scheme, and Costa Rica is advancing on its plan to become the first carbon-neutral country in the world.

But despite such signs of progress, the pace of global energy transitions is woefully off-track from what is needed to meet global climate targets, and the Paris Agreement has yet to prove itself up to the task of bending the curve.

The IEA estimates that energy-related emissions rose in 2018, including in advanced economies for the first time in five years, signalling emissions are moving in the exact opposite direction in which they should.

This stark reality was underscored even further by the release of the IPCC’s Special Report on 1.5 Degrees last October, shifting the goal post on the challenge of meeting Paris targets.

With the rulebook in place, the next big challenge for the Paris Agreement is to show that it can result in greater ambition.

Countries are expected to submit revised, more ambitious NDCs by next year, returning the spotlight firmly to policymakers in national capitals and subnational jurisdictions, in particular those responsible for energy policy development. But a delicate process of diplomacy, both inside and outside of the negotiations, is important so that no country feels as if it is acting alone.

3. Rising fossil fuel consumption remains at odds with meeting climate and energy objectives

It was no coincidence that COP24 was held in the heart of Poland’s Silesia coal region. A priority of the COP Presidency was to highlight and spark discussion on the challenges of fossil fuel transition, including the just transition of workers in these sectors.

Coal contributes to 80 per cent of Poland’s electricity generation mix, one of the highest shares in the world and 5 million homes in Poland are heated with coal, a fact that could not escape COP24 participants as the smell of coal smoke lingered over the city centre each evening.

These challenges experienced in Poland, but also in many other countries, highlight opportunities for integrating the need to reduce greenhouse gas emissions with other priorities such as air pollution reduction, sustainable employment, and clean economic development.

Globally, fossil fuels continue to form the backbone of the economy, accounting for 81 per cent of global energy supply, a figure that has remained stubbornly unchanged in the last three decades.

IEA’s Coal 2018 report showed that despite the advance of renewables, coal remains the largest source of electricity globally and global coal demand is in fact forecast to rise.

Yet the IEA’s Sustainable Development Scenario, describing an energy sector aligned with the Paris Agreement, points to a need for global coal use to peak and enter a rapid decline. The tension between objectives and reality is troublingly, still rising.

4. Tracking the progress of energy transitions is fundamental to raising ambition, and IEA has a key role to play

COP24 also saw the culmination of the Talanoa Dialogue, an important process to assess global progress towards Paris goals. Tracking progress is a critical driver of raising ambition and enhancing energy transitions efforts. Not only does it highlight progress made, but it reveals areas of action moving forward as “that which is measured, improves.”

The Talanoa Dialogue drew political attention to the value of tracking progress to meet Paris goals. Looking ahead, collective progress will be assessed every five years starting in 2023 through a more comprehensive assessment process called the Global Stocktake, considering not only emissions reductions, but also adaptation to climate impacts and finance.

The IEA is at the heart of global efforts for tracking energy transitions through a range of analytical tools, including Tracking Clean Energy Progress, the Global Energy and CO2 Status Report, and tracking progress on Sustainable Development Goal 7.

5. Beyond solar and wind: all low-carbon options are vital

Another welcome development from COP24 was growing acknowledgment for the need to explore the full range of options in accelerating energy transitions.

While much attention in recent years has been justifiably paid to the impressive growth of variable renewable energy sources, low carbon energy as a whole still only comprises 19 per cent of total energy supplied.

To make real progress in decarbonizing the energy system, energy transitions must rely on more than just variable renewables but on all available options.

COP24 saw increasing recognition of the need for a range of technologies to be deployed at scale, including carbon capture, utilization and storage, nuclear energy, sustainable bioenergy, hydrogen, and of course energy efficiency.

All of these have a role to play in addition to, not in lieu of, the rapid scale-up of renewables.

Despite the lack of a final agreement on market mechanisms, the adoption of the Paris Agreement rulebook should be recognized as the multilateral success as it was. However, the pace of energy transitions is far from what is required to meet Paris Agreement goals, and translating intention to practice will require strong, well-coordinated policies that rely on the full array of low-carbon options.

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Chinese coal demand expected to fall by about 3 per cent to 2023

While global coal demand looks set to rise for the second year in a row in 2018, it is forecast to remain stable over the next five years, as declines in Europe and North America are offset by strong growth in India and Southeast Asia, according to the International Energy Agency’s latest coal market report, Coal 2018.

Air quality and climate policies, coal divestment campaigns, phase-out announcements, declining costs of renewables and abundant supplies of natural gas are all putting pressure on coal. As a result, coal’s contribution to the global energy mix is forecast to decline slightly from 27 per cent in 2017 to 25 per cent by 2023.

But coal demand grows across much of Asia due to its affordability and availability. India sees the largest increase of any country, although the rate of growth, at 3.9 per cent per year, is slowing, dampened by a large-scale expansion of renewables and the use of supercritical technology in new coal power plants.

Significant increases in coal use are also expected in Indonesia, Vietnam, Philippines, Malaysia and Pakistan.

Coal in China accounts for 14 per cent of global primary energy, the largest around in the world. Developments in the Chinese coal sector have the potential to affect coal, gas and electricity prices across the world, for instance through inter-fuel substitution or regional arbitrage.

This puts China’s coal sector at the centre of the global energy stage. While China accounts for nearly half of the world’s coal consumption, its clean-air measures are set to constrain Chinese coal demand going forward. We forecast Chinese coal demand to fall by around 3 per cent over the period.

Meanwhile, in a growing number of countries, the phase out of coal-fired generation is a key policy goal. But market trends are proving resistant to change.

“The story of coal is a tale of two worlds with climate action policies and economic forces leading to closing coal power plants in some countries, while coal continues to play a part in securing access to affordable energy in others,” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA.

“For many countries, particularly in South and Southeast Asia, it is looked upon to provide energy security and underpin economic development.”

This is why the IEA sees technologies like Carbon Capture, Utilization and Storage (CCUS) as essential tools to bridge current and future energy needs with global and national climate ambitions.

To help build a new momentum behind the technology, the IEA and the Government of the United Kingdom recently co-chaired an international summit where ministers, senior governmental officials across the world, CEOs from major energy companies and the financial community came together to identify practical steps to accelerate investment and deployment of CCUS.

“Tackling our long-term climate goals, addressing the urgent health impacts of air pollution and ensuring that more people around the world have access to energy will require an approach that marries strong policies with innovative technologies,” said Mr Sadamori.

“It must rely on all available options – including more renewables, of course – but also greater energy efficiency, nuclear, CCUS, hydrogen, and more.”

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China is moving to a carbon capture in a systematic fashion

By Laszlo Varro

This article was published by the International Energy Agency on Dec. 7, 2018.

The recent Green House Gas Technologies Summit (GHGT), the biggest global event on carbon capture, was a good place to reflect on a technology that perhaps has the biggest gap between the aspiration of energy models and the investment reality on the ground, between the disappointments of the past decade and a gathering new wave of optimism.

In some circles, it is fashionable to write down this technology, carbon capture, utilization and storage (CCUS). For some, CCUS is everything that needs to be left behind in the clean-energy transitions: big centralized facilities based on chemistry and mechanical engineering rather than big data, ongoing investments by large conventional energy companies that should be going the way of dinosaurs, and the continuous use of fossil fuels.

Some scepticism is understandable. The first IEA CCS roadmap, from 2009, makes for sobering reading. Consistent with the Group of 8 commitments adopted a year earlier, the report expected CCS projects totalling 22 GW in power generation and 170 million tons in industry by 2020 With a year to go, the current status for CCS falls well short of these goals: only 0.4 GW in power and around 32 million tons in industry.

But we should not dismiss this technology – in fact, CCUS is going to be critical to the global clean energy transitions, and why the IEA held a major CCUS Summit, with the UK Government, on 28 November in Edinburgh bringing governments and industry together to give the technology a new start.

Theoretically it is possible to achieve climate goals without CCUS. The recently published IPCC report has a pathway (P1) that arrives at climate stabilization without CCS by emphasizing restraints on energy demand. However, this pathway entails energy demand declining to an extent which as the IPCC righty emphasized would be unprecedented. For example, the average annual decline of oil demand from today till 2030 in this scenario would be twice as large as the decline triggered in 2008/2009 by a combination of USD $140 per barrel and the global financial crisis.

A robust energy efficiency effort is certainly the first pillar of any serious climate policy and it is very much incorporated into the IEA’s analysis. For example in our Energy Technology Perspectives a high speed train network replaces a third of domestic aviation in the United States by mid-century. Even with such assumptions, the decline in oil demand is much slower than what the IPCC scenario described above would demand.  It would be highly desirable to achieve this without a recession by global cooperation and bottom up, voluntary lifestyle changes. Nevertheless, ancient Greek dramas are so enjoyable today precisely because there has been much less change in human nature than in our technological capability. We better have technological solutions ready for the eventuality that human nature remains unchanged for another 20 years. The other IPCC pathways, which don’t have such demand restraint, have large scale application of carbon capture to deal with ongoing fossil fuel consumption, and eventually remove carbon from the air.

At this stage it is also useful to dispel some misunderstandings. Carbon capture is not an alternative to wind and solar deployment and should not stop reallocating investment from fossil fuels to clean energy. A credible climate stabilization pathway like the IEA’s Sustainable Development Scenario has an amazing scale up of wind and solar as the backbone of the transition, deployment way above the current investment activity that will stretch the limits for mobilizing investment and require major changes in electricity network.

Likewise, CCUS is not a pretext to stop investment reallocation. From a financial point of view the largest fossil fuel asset by far is oil upstream, which is intimately connected to transport, a sector where, due to dispersed and mobile emission sources, CCUS will not play any meaningful role. The largest application of CCUS is likely to be on coal whose upstream has an order of magnitude smaller financial valuation.

And even for coal, as one compares a “business as usual” trajectory with the Sustainable Development Scenario, around 85 per cent of the reduction in coal plant emissions came from efficiency and renewables, leading to fewer coal plants running less hours and only a minority from capturing the emissions from continuous operation.

The role of CCUS is something different and focuses on overcoming three often neglected asymmetries. The first is the age profile of coal. There are countries that implement coal phase out policies, but they tend to be ones like the UK where coal mining peaked a century ago, and where the last coal plants were built in the 1970s. However, due to the massive investment wave of developing Asia, one third of coal plants in the world are less than 10 years old. They each represent a USD $2 billion capital investment and run on a cheap, well distributed and geopolitically secure energy source. Shutting them all down would be unrealistic given their role energy security. Retrofitting them with CCUS could be a feasible alternative.

The second asymmetry is between the truly amazing success of wind and solar and the slow progress in low carbon options for the heavy industry that represent a third of global emissions. To produce steel without carbon emissions would require the equivalent of all the solar panels in California to produce hydrogen and use it instead of coal in steelmaking – all for a single steel plant. This is possible and certainly worth researching and innovating, but should not be framed as an obvious cheap and easy alternative.

Last but not least, the third asymmetry is between the current momentum of the energy system and the uncomfortable facts of climate science. In the absence of a sudden transformation of social and political attitudes, the CO2 concentration will overshoot and carbon will need to be removed from the air.

The GHGT summit displayed an exciting mixture of a sense of urgency, an appreciation of the scale of the challenge but also a “this time for real” feeling due to positive developments in policy and technology. The most important policy development is in the United States, which introduced new investment incentives for both carbon storage and utilization.

Importantly, whereas previous approaches tended to support specific projects, handpicking technology and location with a mixed tracked record to put it mildly, the new policy is a broad-based tax incentive putting a value on avoided emissions and unleashing the creativity and innovativeness of the private sector. It was refreshing to meet people who were hired as Head of CCS Business Development by major corporations, a job title inconceivable not long ago. A lot of the new US capture investment seems to go to gas rather than coal, which is understandable in the light of the unfolding gas revolution in the US economy.

GHGT also had a strong participation and commitment from China, the country representing half of global coal demand and perhaps the most advanced coal technologies. China took the first step towards CCUS with the first large scale integrated coal conversion/carbon capture project now under development. It has a very smart approach focusing on capturing an almost pure CO2 stream from a coal to chemicals process, enabling the high value added and clean utilization of the country’s abundant coal resources. Game changer is an overused term, but China moving to CCUS in a systematic fashion would certainly qualify for it.

It was also very visible how innovation into both technology and business models are reshaping the prospects of CCUS, especially the interactions between carbon capture and hydrogen. The resurgence of strategic interest to hydrogen is strongly connected with carbon capture in multiple ways. The most basic is the source of hydrogen: today it is fossil fuels with over 10 tons of CO2 emitted for a ton of H2.

Capturing it is one of the possible pathways for clean H2. There are already operating projects in Canada, the United States and the United Arab Emirates. Those use the hydrogen locally in an industrial process, but there is a serious initiative to produce H2 from Australian coal with CCUS and export it to Japan.

The other pathway, wind and solar based electrolysis, is gathering momentum and likely to become robustly competitive. And even that has a carbon capture connection: in regions that have a large heavy industry but less attractive storage geology, attention and investment are shifting towards carbon utilization. In many cases the basic concept is to combine the captured CO2 with renewable based H2 and then let imagination fly around various chemical pathways. All of these still require innovation and investment to scale up, but the commitment and optimism was already visible.

After the decade of disappointments, there may be some legitimate scepticism. Still, CCUS’s moment has arrived. And we should hope so, for the stake of the global energy transition.

Laszlo Varro is the chief economist at the International Energy Agency.  As Chief Economist, Mr. Varro supports all Directors and teams at the IEA in ensuring consistent energy economics and analytical rigour for the Agency’s work. Prior to assuming the position of Chief Economist, Mr Varro served as IEA Head of Gas, Coal and Power Markets.

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World Energy Outlook 2018 examines future patterns of a changing global energy system at a time of increasing uncertainties and finds that major transformations are underway for the global energy sector. Across all regions and fuels, policy choices made by governments will determine the shape of the energy system of the future.  Vestas photo.

World Energy Outlook explores different possible futures

This article was published by the International Energy Agency. 

The World Energy Outlook (WEO) does not aim to forecast the future, but provides a way of exploring different possible futures, the levers that could bring them about, and the interactions that arise across a complex energy system.

If there is no change in policies from today, as in the Current Policies Scenario, this leads to increasing strains on almost all aspects of energy security and a major additional rise in energy-related CO2 emissions.

All the growth comes from developing economies, led by India. As recently as the year 2000, Europe and North America accounted for more than 40 per cent of global energy demand and developing economies in Asia for around 20 per cent.

By 2040, this situation is completely reversed. Low-carbon technologies, led by renewables, and natural gas meet more than 80 per cent of the increase in global demand. Electricity consumption grows twice as fast as overall energy demand.

The shale revolution continues to shake up oil and gas supply, enabling the United States to pull away from the rest of the field as the world’s largest oil and gas producer.

By 2025, nearly one in five barrels of oil and one in four cubic metre of gas in the world come from the United States. This adds to the pressure on traditional oil and gas exporters that rely heavily on export revenues to support their national development.

The Sustainable Development Scenario

Our Sustainable Development Scenario provides an integrated strategy to achieve the key energy-related elements of the United Nations Sustainable Development agenda, including energy access, air quality and climate objectives. The emissions trajectory of the Sustainable Development Scenario is fully in line with achieving the long-term objectives of the Paris Agreement.

To deliver the outcomes of this scenario, the power sector proceeds further and faster with the deployment of low-emissions generation. Renewable energy technologies provide the main pathway to the provision of universal energy access.

All economically viable avenues to improve efficiency are pursued, keeping overall demand in 2040 at today’s level.

Electrification of end-uses grows strongly, but so too does the direct use of renewables – bioenergy, solar and geothermal heat – to provide heat and mobility.

The share of renewables in the power mix rises from one-quarter today to two-thirds in 2040; in the provision of heat it rises from 10 per cent today to 25 per cent and in transport it rises from 3.5 per cent today to 19 per cent (including both direct use and indirect use, e.g. renewables-based electricity).

The World Energy Model

Since 1993, the IEA has provided medium to long-term energy projections using the World Energy Model (WEM) – a large-scale simulation model designed to replicate how energy markets function.

The WEM is the principal tool used to generate detailed sector-by-sector and region-by-region projections for the WEO scenarios.

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Oil consumption growing for decades due to petrochemicals, trucking, and aviation but approvals of conventional production must double to meet growth

Major transformations are underway for the global energy sector, from growing electrification to the expansion of renewables, upheavals in oil production and the globalization of natural gas markets, according to the International Energy Agency.

Across all regions and fuels, policy choices made by governments will determine the shape of the energy system of the future.

At a time when geopolitical factors are exerting new and complex influences on energy markets, underscoring the critical importance of energy security, World Energy Outlook 2018, the International Energy Agency’s flagship publication, details global energy trends and what possible impact they will have on supply and demand, carbon emissions, air pollution, and energy access.

The WEO’s scenario-based analysis outlines different possible futures for the energy system across all fuels and technologies. It offers a contrast with different pathways, based on current and planned policies, and those that can meet long-term climate goals under the Paris Agreement, reduce air pollution, and ensure universal energy access.

While the geography of energy consumption continues its historic shift to Asia, WEO 2018 finds mixed signals on the pace and direction of change.

Oil markets, for instance, are entering a period of renewed uncertainty and volatility, including a possible supply gap in the early 2020s. Demand for natural gas is on the rise, erasing talk of a glut as China emerges as a giant consumer. Solar PV is charging ahead, but other low-carbon technologies and especially efficiency policies still require a big push.

In all cases, governments will have a critical influence in the direction of the future energy system. Under current and planned policies, modelled in the New Policies Scenario, energy demand is set to grow by more than 25 per cent to 2040, requiring more than $2 trillion a year of investment in new energy supply.

“Our analysis shows that over 70% of global energy investments will be government-driven and as such the message is clear – the world’s energy destiny lies with government decisions,” said Dr Fatih Birol, the IEA’s executive director.

“Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centers, and expanding basic access to energy in Africa and elsewhere.”

The analysis shows oil consumption growing in coming decades, due to rising petrochemicals, trucking and aviation demand.

But meeting this growth in the near term means that approvals of conventional oil projects need to double from their current low levels. Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million barrels a day from today to 2025, the equivalent of adding another Russia to global supply in seven years – which would be an historically unprecedented feat.

In power markets, renewables have become the technology of choice, making up almost two-thirds of global capacity additions to 2040, thanks to falling costs and supportive government policies.

This is transforming the global power mix, with the share of renewables in generation rising to over 40 per cent by 2040, from 25 per cent today, even though coal remains the largest source and gas remains the second-largest.

This expansion brings major environmental benefits but also a new set of challenges that policy makers need to address quickly. With higher variability in supplies, power systems will need to make flexibility the cornerstone of future electricity markets in order to keep the lights on.

The issue is of growing urgency as countries around the world are quickly ramping up their share of solar PV and wind, and will require market reforms, grid investments, as well as improving demand-response technologies, such as smart meters and battery storage technologies.

Electricity markets are also undergoing a unique transformation with higher demand brought by the digital economy, electric vehicles and other technological change.

As part of its deep-dive into the electricity sector this year, WEO 2018 also examines what impact of higher electrification in transportation, buildings and industry. The analysis finds that higher electrification would lead to a peak in oil demand by 2030, and reduce harmful local air pollutant. But it would have a negligible impact on carbon emissions without stronger efforts to increase the share of renewables and low-carbon sources of power.

The IEA’s Sustainable Development Scenario offers a pathway to meeting various climate, air quality and universal access goals in an integrated way.

In this scenario, global energy-related CO₂ emissions peak around 2020 and then enter a steep and sustained decline, fully in line with the trajectory required to achieve the objectives of the Paris Agreement on climate change.

But most emissions linked to energy infrastructure are already essentially locked-in. In particular, coal-fired power plants, which account for one-third of energy-related CO₂ emissions today, represent more than a third of cumulative locked-in emissions to 2040.

The vast majority of these are related to projects in Asia, where average coal plants are just 11-years-old on average with decades left to operate, compared with 40 years on average age in the United States and Europe.

“We have reviewed all current and under-construction energy infrastructure around the world – such as power plants, refineries, cars and trucks, industrial boilers, and home heaters – and find they will account for some 95 per cent of all emissions permitted under international climate targets in coming decades,” said Dr Birol.

“This means that if the world is serious about meeting its climate targets then, as of today, there needs to be a systematic preference for investment in sustainable energy technologies. But we also need to be much smarter about the way that we use our existing energy system. We can create some room for maneuver by expanding the use of Carbon Capture Utilization and Storage, hydrogen, improving energy efficiency, and in some cases, retiring capital stock early. To be successful, this will need an unprecedented global political and economic effort.”

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South Africa first sub-Saharan African nation to join IEA

This article was published by the International Energy Agency on Nov. 6, 2018.

CAPE TOWN – HE Minister Jeff Radebe, Minister of Energy of the Republic of South Africa, and Dr Fatih Birol, Executive Director of the International Energy Agency, jointly announced on Tuesday South Africa’s decision to join the IEA as an Association country.

South Africa is the first sub-Saharan African country to institutionalize its engagement with the IEA, a development that marks an important milestone for energy governance in Africa and globally.

South Africa is a major player in African energy markets representing the largest energy consumer on the continent, accounting for about half of Africa’s electricity capacity and possessing one of the highest electrification rates.

The IEA is prioritizing work in Africa in the years ahead, and South Africa will be a critical partner for launching and delivering an ambitious array of energy access, security and clean energy transitions initiatives across the continent.

“I approved of South Africa joining the IEA as an Association country because this decision places us at the centre of the global energy forum with positive economic benefits for our country as we learn from IEA family members,” said Minister Radebe.

While commending Minister Radebe for spearheading South Africa’s energy sector reform and making outstanding progress in improving the country’s electrification rate, Dr Birol stated that “today, Mr Minister, you again demonstrate South Africa’s leadership both in Africa and beyond. I am fully confident that this new chapter in our relationship will be mutually beneficial.”

Among the agreements signed by the two leaders was a three-year joint programme of work identifying opportunities for collaboration on energy statistics, energy efficiency, electrification and power system transition, renewables integration, energy innovation, and domestic gas market design.

South Africa’s decision to join the IEA family is a welcome development, and critical to the advancement of the IEA’s modernization mandate, which was defined during the 2015 Ministerial meeting and is built on three pillars: opening the agency’s doors to emerging countries; broadening energy security beyond oil to natural gas and electricity; and developing a global clean energy hub, including for energy efficiency.

The result has been a marked growth in the IEA family to include 30 members and 8 Association countries, and to represent almost 75 per cent of global energy consumption.

In speaking of joining the IEA family, Minister Radebe extended his “appreciation to the IEA and Dr Birol’s leadership in achieving such a result in working with South Africa to become an Association country” and highlighted that he looks forward to “working together on affordable, accessible, and clean energy”.

Dr Birol praised Minister Radebe for his vision and action and emphasized that the IEA looks forward to working with South Africa “to make the energy world more sustainable, more secure and more equitable.”

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Energy efficiency could boost households’ incomes, cut pollution and associated deaths

The International Energy Agency held its third annual global conference on energy efficiency in Paris last week, bringing together more than 200 energy professionals from over 60 countries, to focus on the critical role that energy efficiency plays in the global energy transition, as well as opportunities that can be addressed.

The event brought together energy ministers, high-level officials from the public and private sector, as well as a wide range of organizations.

Dr Fatih Birol, the IEA’s executive director, also launched an online platform for energy efficiency data and information, which showcases the depth of the IEA’s expertise on the topic.

According to Birol, energy efficiency’s role as the “first fuel,” highlighting that by implementing the cost-effective energy efficiency actions available today, the global economy could double while greenhouse gas emissions would be 12 per cent lower between now and 2040.

The finding, which was published in the IEA’s Energy Efficiency 2018 report recently is significant in light of the recent IPCC report noting the short timeframe for achieving global climate change mitigation goals.

Dr Birol noted that other benefits of the efficient world modelled in the report included households being better off by half a trillion dollars per year, while local air pollutants and associated deaths would be reduced by a third.

The IEA says it is doing three key things to support countries take actions to realize these benefits.

First, through its new online platform, the IEA is providing data, analysis and information for policy makers to learn about efficiency policies being used around the world, their impacts and lessons learned.

Second, the IEA is building global skills and capacity, through its training programme for emerging economies, which has trained more than 1000 policy makers from over 70 countries over the last four years.

And third, in partnership with the European Investment Bank, the IEA will launch a new initiative in early 2019, bringing together global leaders from international financial institutions (IFIs) to explore ways to scale up energy efficiency finance.

Dr Birol described the new initiative on finance as “a great opportunity to strengthen the global dialogue on financing the investments required to deliver energy efficiency at scale”.

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