World Energy Investment Report: IEA

In News

Recently, the International Energy Agency released the World Energy Investment 2021 report. 

Major highlights of the report 

• Investment
  • Global energy investment is expected to rebound this year and increase 10 per cent year-on-year to around $1.9 trillion.
    • Most of this investment will flow towards power and end-use sectors, shifting out of traditional fossil fuel production. 
  • The scenario is perfectly aligned with the projection that global energy demand will rise 4.6 per cent year-on-year in 2021, offsetting its contraction in 2020.
• Renewable sector
  • Renewable power  will have the largest share around 70 per cent of the total $530 million which will be spent on new power generation capacity.
  • There will be substantial gain of renewable energy as the future energy outlook has been dependent on technological development, well-established supply chain and demand from consumers for carbon-neutral electricity.

                                    Image Courtesy:DTH

• Fuels:
  • Upstream investment in oil is expected to grow 10 per cent. 
    • This expansion in fossil fuels was planned with novel technologies like carbon capture and storage (CCS) and bioenergy CCS, which are yet to attain commercial success. 
    • The increment of coal-fired power in 2020, mostly driven by China, is indicating that ‘coal is down but not yet out’.
    • Energy efficiency sector will also see a substantial rise (10 per cent) in investment, though the low fossil fuel price may act as a deterrent.

• Emissions 
  •  The above positive scenarios will still not deter the increase in carbon dioxide emission, after contraction in 2020 mainly due to economic slowdown induced by the novel coronavirus disease (COVID-19) pandemic. 
  • Global emission is set to grow by 1.5 billion tonnes this year.
  • The pandemic recovery strategies in many countries lack the required stimulant towards emission biennial technologies and pathways.
  •  The rhetoric around ‘Net Zero’ is gaining momentum but its transition to actual action is not visible.

• Causes for increased emissions
  • The emerging market is almost 70 per cent responsible for demand growth and India plays an important part in this block.
  •  China is showing a tremendous expansion in coal-based power production — their coal consumption in December 2020 was a historic high — though the country has a commendable renewable growth.

• The responsibility-share of developed nations should not be undermined: Their in-country growth of emission is moderate but their exported emission is of concern.
•  Australia’s exported emission through coal is double its domestic emission, 
• The United States has shown renewed commitment to the multilateral United Nations system for tackling climate change by re-joining the Paris agreement. 
  • The country’s fascination with cheap shell gas is creating an investment distortion and adversely affecting the sustainability of developmental pathways of countries like India.

Conclusion 

• The scenario varies from country to country but favourable policies and regulations play a very important role in providing long-term confidence among the investors towards renewables.
•  The urgency visible in communication is still not satisfactorily reflected in action and the world is far away from the scientific target of limiting climate change within two degrees Celsius.
• Maybe a more democratic decision-making process and de-corporatisation of the energy sector is the need of the future for the survival of civilization on this planet.

Source: DTE