- This round-up brings you the latest developments in the global energy sector.
- Top energy news: Energy efficiency needs to double, says IEA; Tripling renewable capacity is key in run-up to COP28; China’s energy demand could peak by 2025.
- For more on the World Economic Forum’s work in the energy space, visit the Centre for Energy and Materials.
1. Energy efficiency needs to double, says report
Global energy intensity improved by just over 2% in 2022, but it needs to double to 4% annually by 2030 to meet global efficiency targets, according to International Energy Agency (IEA) data. If achieved, this would result in a 40% increase in economic output per unit of energy used.
More than half of the 150 countries analyzed by the IEA have achieved a 4% improvement at least three times in the past decade, and five G20 countries – China, France, Indonesia, Japan, and the UK – have sustained an average of 4% or more over a five-year period.
The global energy crisis after Russia invaded Ukraine led to a new focus on energy efficiency, Energy Post explains. This was seen as a way to tackle energy security, affordability, and the climate crisis all at once and governments responded by implementing measures to promote energy efficiency while offering incentives for efficient technology.
According to the IEA, over 70% of the global economy introduced new or strengthened efficiency measures. As a result, there has been a surge in investment in energy efficiency and consumers are more interested in reducing their energy use than ever before.
The agency says its Energy Efficiency Policy Toolkit can help guide governments towards taking the necessary steps to achieve these targets. Energy Post argues that the right technologies exist in key areas like air conditioners, lighting, building codes, car fuel economy, electric motors and heavy industry; so now is the time for the right policies, support and incentives to be implemented.
The IEA lays out policy recommendations for governments to improve their energy efficiency.
Image: IEA
2. Tripling renewable capacity – a key focus ahead of COP28
The global target to triple renewable capacity by 2030 is set to be a major focus of a meeting of ministers in the United Arab Emirates this week ahead of COP28, but achieving the goal requires significant financial support and reform.
The good news is that renewable energy is becoming economically competitive with fossil fuels. But to reduce fossil fuel consumption quickly enough to combat global warming, a plan for managed decline is necessary, says Climate Home News.
COP28, IRENA and the Global Renewables Alliance have launched a report that outlines a roadmap to fast-track the energy transition by tripling renewable energy power and at the same time doubling energy efficiency by 2030 – a key pillar of the COP28 Presidency’s Action Agenda.
By 2030, global total installed renewables-generation capacity would need to expand more than threefold.
Image: IRENA, COP28, Global Renewables Alliance
3. News in brief: More energy stories from around the world
China’s total energy demand could peak in the middle of this decade due to slowing economic growth, according to the IEA in its latest World Energy Outlook. The country has been a major contributor to global energy demand and CO2 emissions over the past decade, but as its working population decreases, there will be less need for investment and energy consumption, writes Quartz.
Which countries have the most expensive gas and electricity in Europe? Costs have steadied since peaking earlier this year, following Russia’s invasion of Ukraine, and the region is largely prepared for winter energy demand. But large price disparities remain between certain countries, both inside and outside of the EU, reports Euronews.
US energy sector mergers and acquisitions activity was down this quarter, but it included two historic oil exploration and production deals collectively worth hundreds of billions of dollars. Chevron agreed to buy Hess for $53 billion, following Exxon’s $59.5 million acquisition of rival Pioneer Natural Resources earlier in October, making it the biggest producer in the largest US oil field.
Meanwhile, Standard Bank of South Africa plans to launch a $1 billion fund to support the country’s shift to renewable energy. The aim is to decrease its reliance on coal for electricity production, which currently makes up over three-quarters of South Africa’s total installed capacity, according to Global Construction Review.
Southeast Asia is ramping up production of, and hopefully demand for, electric vehicles (EV). Road vehicles are responsible for 89% of transport-related emissions in the region, so EVs represent a decarbonization solution and also a way to drive new investment. Indonesia, Malaysia, Thailand and Vietnam are leading the way, but regional EV sales remain low at just over 2% of all vehicle sales in 2022.
The World Bank has warned that oil prices could rise to over $150 per barrel if the Israel-Hamas conflict is prolonged in a “dual shock” for commodity markets still feeling the effects of Russia’s invasion of Ukraine, reports the Financial Times.
Indonesia is finalizing a regulation to expand carbon capture and storage (CCS) schemes across various industries, and allow the storage of greenhouse gases from other countries. Currently, the country’s regulations for CCS only apply to the oil and gas sector but it aims to become a hub for carbon storage, utilizing its depleted hydrocarbon reservoirs and saline aquifers, Reuters reports.
Global rivalries and declining political will may hinder efforts to reduce global emissions and increase their cost, according to Norway’s state-owned energy producer Statkraft, which released its annual report on global emissions reduction. The report sees a 70% drop in emissions by 2050, but this is short of the net-zero emissions target set by many countries, Reuters reports.
Engie Brasil Energia is expanding its operating assets with the purchase of five photovoltaic power stations in Brazil. Seller Atlas Renewable Energy plans to reinvest the proceeds from the deal into developing new renewable projects in Brazil while still retaining installed capacity in the country.
And stocks in clean energy companies continue to fall – the iShares Global Clean Energy ETF recently reached three-year lows, pressured by rising interest rates and higher borrowing costs, according to the Wall Street Journal.
4. More on energy from Agenda
Soaring costs are forcing some wind power developers to delay or halt new projects at a time when wind power capacity needs to rise swiftly to help clean up the energy system.
The number of renewable energy jobs has almost doubled over the past decade as investments in wind, solar, hydropower, biofuels and other renewable energy technologies continue to climb, a new report finds. Find out which country is leading the world in renewable job creation.
Microsoft has signed a deal with private US nuclear fusion company Helion to provide the tech firm with electricity in five years. Here’s what you need to know about the latest developments in nuclear fusion.
To learn more about the work of the Centre for Energy and Materials, contact Ella Yutong Lin: ellayutong.lin@weforum.org
