Renewables will not supply future power in industrialized countries, says IEA

BRUSSELS, Belgium, 2004-04-21 (Refocus Weekly) Increased demand for generation capacity will be met by new fossil fuel-based power plants in many IEA countries, not by renewables, says the International Energy Agency.

“There is an urgent need to consider ways to accelerate the decoupling of energy and CO₂ emissions from economic growth,” says the group’s executive director Claude Mandil. Energy efficiency and factors such as economic structure, income, lifestyle, climate, prices and fuel mix have shaped developments in energy use and emissions since the IEA was formed 30 years ago in response to the OPEC oil shocks.

“Oil continues to dominate the IEA fuel mix,” although consumption has declined in all sectors except transportation, where demand offset the decline for oil in other industries. The result is that IEA oil demand in 2001 was comparable to 1973, he quotes from the IEA publication: ‘Oil Crises & Climate Challenges: 30 Years of Energy Use in IEA Countries.’

“The report contains an alarming message: energy savings rates across all sectors and in almost all countries have slowed since the late 1980s, as has the decline in CO₂ emissions relative to GDP,” says Mandil. “This shows that the oil price shocks in the 1970s and the resulting energy policies did considerably more to control growth in energy demand and CO₂ emissions than energy efficiency and climate policies implemented in the 1990s.”

Before 1973, oil prices were generally low, with room to improve energy efficiency when prices rose, but the levelling of prices in the mid-1980s reduced the incentive to sustain savings. “The recent low rate of energy savings poses a concern from both an environment and an energy security perspective,” the document warns. “Oil and electricity demand is rapidly growing.”

The increased demand for electricity will “greatly add to the burden of controlling CO₂ emissions” in IEA countries, it warns. “Although nuclear remains at 11% of the total energy supply and renewables have started to make inroads for electricity generation, new generation capacity over the next few years will, in many IEA Member countries, be met by new fossil fuel-based power plants.”

“We are concerned that, despite the major improvements in energy efficiency, recent trends indicate that stronger efforts are needed to avoid an increasing dependency on oil and to reduce the environmental impacts from growing energy demand,” adds Mandil. “It is still possible to obtain at low cost, a dramatic increase in energy efficiency in our economies.”

The report concludes that IEA countries have significantly reduced the need for energy to fuel economic growth. Compared to 1973, it takes one-third less energy to produce one unit of GDP due to the considerable energy savings. Without the savings achieved since 1973, the analysis estimates that energy use in IEA countries at the end of the 1990s would have been 50% higher than what it actually was.