Update | IEA World Energy Outlook 2022
Above: A new energy security paradigm is needed for secure transitions. For the duration of energy transitions, the clean energy and fossil fuel systems are both required to deliver energy services; assessing & managing the evolving co-existence of both systems is crucial. NZE = Net Zero Emissions by 2050 Scenario (source IEA)
“It is essential to bring everyone on board, especially at a time when geopolitical fractures on energy and climate are all the more visible,” he said. “This means redoubling efforts to ensure that a broad coalition of countries has a stake in the new energy economy. The journey to a more secure and sustainable energy system may not be a smooth one. But today’s crisis makes it crystal clear why we need to press ahead.”
Russia has been by far the world’s largest exporter of fossil fuels, but its invasion of Ukraine is prompting a wholesale reorientation of global energy trade, leaving it with a much-diminished position. All Russia’s trade ties with Europe based on fossil fuels had ultimately been undercut in previous WEO scenarios by Europe’s net zero ambitions, but Russia’s ability to deliver at relatively low cost meant that it lost ground only gradually
Now the rupture has come with a speed that few imagined possible. Russian fossil fuel exports never return – in any of the scenarios in this year’s WEO – to the levels seen in 2021, with Russia’s reorientation to Asian markets particularly challenging in the case of natural gas. Russia’s share of internationally traded energy, which stood at close to 20% in 2021, falls to 13% in 2030 the Stated Policies Scenario, while the shares of both the United States and the Middle East rise. For gas consumers, the upcoming Northern Hemisphere winter promises to be a perilous moment and a testing time for EU solidarity – and the winter of 2023- 24 could be even tougher. But in the longer term, one of the effects of Russia’s recent actions is that the era of rapid growth in gas demand draws to a close. In the Stated Policies Scenario, the scenario that sees the highest gas use, global demand rises by less than 5% between 2021 and 2030
and then remains flat through to 2050. Momentum behind gas in developing economies has slowed, notably in South and Southeast Asia, putting a dent in the credentials of gas as a transition fuel. “Amid the major changes taking place, a new energy security paradigm is needed to ensure reliability and affordability while reducing emissions,” Dr Birol said. “That is why this year’s WEO provides ten principles that can help guide policymakers through the period when declining fossil fuel and expanding clean energy systems co-exist, since both systems are required to function well during energy transitions in order to deliver the energy services needed by consumers. And as the world moves on from today’s energy crisis, it needs to avoid new vulnerabilities arising from high and volatile critical mineral prices or highly concentrated clean energy supply chains.” Maintaining electricity security in tomorrow’s power systems calls for new tools, more flexible approaches and mechanisms to ensure adequate capacities. Power generators will need to be more responsive, consumers will need to be more connected and adaptable, and grid infrastructure will need to be strengthened and digitalised. Inclusive, people-centred approaches are essential to allow vulnerable communities to manage the upfront costs of cleaner technologies and ensure that the benefits of transitions are felt widely across societies.
Above: Keeping the door to 1.5 °C open. Policy and technology progress since 2015 has shaved 1°C off projected warming, a step in the right direction; but much more needs to be done in order to avoid severe climate disruptions (source IEA)
14 | November/December 2022|
www.modernpowersystems.com
Even as transitions reduce fossil fuel use, there are parts of the fossil fuel system that remain critical to energy security, such as gas-fired power for peak electricity needs, or refineries to supply residual users of transport fuels. Unplanned or premature retirement of this infrastructure could have negative consequences for energy security.
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