Share of renewables in global electricity mix to near 50% by 2030: IEA report

IEA said share of renewables in the global electricity mix would be nearing 50 percent by 2030 from the current 30 percent.

The International Energy Agency (IEA) has said that the share of renewables in the global electricity mix would be nearing 50 percent by 2030 from the current 30 percent. It also said that electric cars would increase by almost 10 times worldwide by 2030, with the emergence of a new clean energy economy.

The IEA said this in the latest World Energy Outlook (WEO) 2023, published on October 24. The report highlighted that investment in new offshore wind projects would go up by three times, by 2030, than in new coal- and gas-fired power plants.

Renewables are set to contribute 80 percent to new power-generation capacity by 2030 under current policy settings, with solar power alone accounting for more than half of this expansion, according to the IEA report.

The report, however, pointed out that the increase is based only on the current policy settings of governments around the world. The IEA said stronger measures would still be needed to keep alive the goal of limiting global warming to 1.5 °C.

"Governments, companies and investors need to get behind clean energy transitions, rather than hindering them. There are immense benefits on offer, like new industrial opportunities and jobs, greater energy security, cleaner air, universal energy access and a safer climate for everyone. Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world's energy and climate future look weaker than ever, said IEA Executive Director Fatih Birol.

lEA said rising geopolitical tensions in the Middle East have refocused attention on energy security concerns. This situation in the Middle East creates further uncertainty for an unsettled global economy that is feeling the effects of stubborn inflation and high borrowing costs, it added.

Fossil fuel peak

The report shows that the peaks in global demand for coal, oil and natural gas would be witnessed this decade due to the combination of growing momentum behind clean energy technologies and structural economic shifts around the world.

"In this scenario, the share of fossil fuels in global energy supply, which has been stuck for decades, at around 80 percent, declines to 73 percent by 2030, with global energy-related carbon dioxide (CO2) emissions peaking by 2025," the report said.

The rate at which new assets that use fossil fuels are being added to the energy system has slowed, the IEA said. Sales of cars and two or three-wheelers with internal combustion engines (ICEs) are well below where they were before COVID-19. In the electricity sector, worldwide additions of coal- and natural gas-fired power plants have halved, at least from earlier peaks. Sales of residential gas boilers have been trending downwards and are now outnumbered by sales of heat pumps in many countries in Europe and in the United States.

Additionally, the report said that China, which has an outsized influence on global energy trends, is undergoing a major shift as its economy slows and undergoes structural changes. China's total energy demand is set to peak around the middle of this decade, the report projects, with continued dynamic growth in clean energy putting the country's fossil fuel demand and emissions into decline.

However, the IEA said that if demand for fossil fuels remains at a high level, as has been the case for coal in recent years, and as is the case in the STEPS projections for oil and gas, the shift to clean energy is far from enough to reach global climate goals.

The Stated Policies Scenario (STEPS) provides an outlook based on the latest policy settings, including energy, climate and related industrial policies.

New LNG projects

An unprecedented surge in new liquefied natural gas (LNG) projects coming online from 2025 is set to add more than 250 billion cubic metres per year of new capacity by 2030, equivalent to around 45 percent of today's total global LNG supply, said the report.

"In recent years, gas markets have been dominated by fears about security and price spikes after Russia cut supplies to Europe. Market balances remain precarious in the immediate future but that would change from the middle of the decade," the report said.

The strong rise in capacity would ease prices and gas supply concerns, but also risks creating a supply glut, given that global gas demand growth has slowed considerably since "golden age" of expansion of gas markets during the 2010s, the report pointed out.

Russia, as a result, will have very limited opportunity to expand its customer base, said IEA. The country's share of internationally traded gas, which stood at 30 percent in 2021, is set to drop to half of that by 2030, it added.