Jan. 06, 2025
Chemicals
The worlds best solar power schemes now offer the cheapestelectricity in history with the technology cheaper than coal and gas in most major countries.
That is according to the International Energy Agencys World Energy Outlook . The 464-page outlook, published today by the IEA, also outlines the extraordinarily turbulent impact of coronavirus and the highly uncertain future of global energy use over the next two decades.
Reflecting this uncertainty, this years version of the highly influential annual outlook offers four pathways to , all of which see a major rise in renewables. The IEAs main scenario has 43% more solar output by than it expected in , partly due to detailed new analysis showing that solar power is 20-50% cheaper than thought.
Despite a more rapid rise for renewables and a structural decline for coal, the IEA says it is too soon to declare a peak in global oil use, unless there is stronger climate action. Similarly, it says demand for gas could rise 30% by , unless the policy response to global warming steps up.
This means that, while global CO2 emissions have effectively peaked, they are far from the immediate peak and decline needed to stabilise the climate. The IEA says achieving net-zero emissions will require unprecedented efforts from every part of the global economy, not just the power sector.
For the first time, the IEA includes detailed modeling of a 1.5C pathway that reaches global net-zero CO2 emissions by . It says individual behaviour change, such as working from home three days a week, would play an essential role in reaching this new net-zero emissions by case (NZE).
The IEAs annual World Energy Outlook (WEO) arrives every autumn and contains some of the most detailed and heavily scrutinised analysis of the global energy system. Over hundreds of densely packed pages, it draws on thousands of datapoints and the IEAs World Energy Model.
The outlook includes several different scenarios, to reflect uncertainty over the many decisions that will affect the future path of the global economy, as well as the route taken out of the coronavirus crisis during the critical next decade. The WEO also aims to inform policymakers by showing how their plans would need to change if they want to shift onto a more sustainable path.
This year it omits the current policies scenario (CPS), which usually provides a baselineby outlining a future in which no new policies are added to those already in place. This is because [i]t is difficult to imagine this business as-usual approach prevailing in todays circumstances.
Those circumstances are the unprecedented fallout from the coronavirus pandemic, which remains highly uncertain as to its depth and duration. The crisis is expected to cause a dramatic decline in global energy demand in , with fossil fuels taking the biggest hit.
The main WEO pathway is again the stated policies scenario (STEPS, formerly NPS). This shows the impact of government pledges to go beyond the current policy baseline. Crucially, however, the IEA makes its own assessment of whether governments are credibly following through on their targets.
The report explains:
The STEPS is designed to take a detailed and dispassionate look at the policies that are either in place or announced in different parts of the energy sector. It takes into account long-term energy and climate targets only to the extent that they are backed up by specific policies and measures. In doing so, it holds up a mirror to the plans of todays policy makers and illustrates their consequences, without second-guessing how these plans might change in future.
The outlook then shows how plans would need to change to plot a more sustainable path. It says its sustainable development scenario (SDS) is fully aligned with the Paris target of holding warming well-below 2Cand pursuing efforts to limit [it] to 1.5C. (This interpretation is disputed.)
The SDS sees CO2 emissions reach net-zero by and gives a 50% chance of holding warming to 1.65C, with the potential to stay below 1.5C if negative emissions are used at scale.
The IEA has not previously set out a detailed pathway to staying below 1.5C with 50% probability, with last years outlook only offering background analysis and some broad paragraphs of narrative.
For the first time this year, the WEO has detailed modelling of a net-zero emissions by case (NZE). This shows what would need to happen for CO2 emissions to fall to 45% below levels by on the way to net-zero by , with a 50% chance of meeting the 1.5C limit.
The final pathway in this years outlook is a delayed recovery scenario (DRS), which shows what might happen if the coronavirus pandemic lingers and the global economy takes longer to recover, with knock-on reductions in the growth of GDP and energy demand.
The chart below shows how the use of different energy sources changes under each of these pathways over the decade to (right-hand columns), relative to demand today (left).
Notably, renewables (light green) account for the majority of demand growth in all scenarios. In contrast, fossil fuels see progressively weaker growth turn to increasing declines, as the ambition of global climate policy increases, from left to right in the chart above.
Intriguingly, there are signs that the IEA has been giving greater prominence to the SDS, a pathway aligned with the well-below 2C Paris goal. In the WEO , it features more frequently, earlier in the report, and more consistently through the pages, compared with earlier editions.
This is shown in the chart below, which shows the location, by relative page position, of each mention of sustainable development scenario or SDS in the WEOs published over the past four years.
One of the most significant shifts in this years WEO is tucked away in Annex B of the report, which shows the IEAs estimates of the cost of different electricity generation technologies.
The table shows that solar electricity is some 20-50% cheaper today than the IEA had estimated in last years outlook, with the range depending on the region. There are similarly large reductions in the estimated costs of onshore and offshore wind.
This shift is the result of new analysis carried out by the WEO team, looking at the average cost of capital for developers looking to build new generating capacity. Previously the IEA assumed a range of 7-8% for all technologies, varying according to each countrys stage of development.
Now, the IEA has reviewed the evidence internationally and finds that for solar, the cost of capital is much lower, at 2.6-5.0% in Europe and the US, 4.4-5.5% in China and 8.8-10.0% in India, largely as a result of policies designed to reduce the risk of renewable investments.
In the best locations and with access to the most favourable policy support and finance, the IEA says the solar can now generate electricity at or below $20 per megawatt hour (MWh). It says:
For projects with low-cost financing that tap high-quality resources, solar PV is now the cheapest source of electricity in history.
The IEA says that new utility-scale solar projects now cost $30-60/MWh in Europe and the US and just $20-40/MWh in China and India, where revenue support mechanisms such as guaranteed prices are in place.
These costs are entirely below the range of LCOE [levelised costs] for new coal-fired power plants and in the same range as the operating cost of existing coal plants in China and India, the IEA says. This is shown in the chart below.
Onshore and offshore wind are also now assumed to have access to lower-cost finance. This accounts for the much lower cost estimates for these technologies in the latest WEO, because the cost of capital contributes up to half of the cost of new renewable developments.
When combined with changes in government policy over the past year, these lower costs mean that the IEA has again raised its outlook for renewables over the next 20 years.
This is shown in the chart below, where electricity generation from non-hydro renewables in is now seen reaching 12,872 terawatt hours (TWh) in the STEPS, up from 2,873TWh today. This is some 8% higher than expected last year and 22% above the level expected in s outlook.
Global electricity generation, by fuel, terawatt hours. Historical data and the STEPS from WEO are shown with solid lines while the WEO is shown with dashed lines and WEO as dotted lines. Source: Carbon Brief analysis of IEA
Global electricity generation, by fuel, terawatt hours. Historical data and the STEPS from WEO are shown with solid lines while the WEO is shown with dashed lines and WEO as dotted lines. Source: Carbon Brief analysis of IEA World Energy Outlook and previous editions. Chart by Carbon Brief using Highcharts
Solar is the largest reason for this, with output in up 43% compared with the WEO. In contrast, the chart shows how electricity generation from coal is now structurally lower than previously expected, with output in some 14% lower than thought last year. The fuel never recovers from an estimated 8% drop in due to the coronavirus pandemic, the IEA says.
Notably, the level of gas generation in is also 6% lower in this years STEPS, again partly as a result of the pandemic and its long-lasting impact on economic and energy demand growth.
Overall, renewables led by the new king solar meet the vast majority of new electricity demand in the STEPS, accounting for 80% of the increase by .
This means they overtake coal as the worlds largest source of power by , outpacing the accelerated case set out by the agency just a year ago.
The rise of variable renewable sources means that there is an increasing need for electricity grid flexibility, the IEA notes. Robust electricity networks, dispatchable power plants, storage technologies and demand response measures all play vital roles in meeting this, it says.
The lower costs and more rapid growth for solar seen in this years outlook means there will be record-breaking additions of new solar capacity in every year from , the IEA says.
This contrasts with its STEPS pathway for solar in previous years, where global capacity additions each year net of retirements have flatlined into the future.
Now, solar growth rises steadily in the STEPS, as shown in the chart below (solid black line). This is even clearer if accounting for new capacity being added to replace old solar sites as they retire (gross, dashed line). Under the SDS and NZE, growth would need to be even faster.
Annual net additions of solar capacity around the world, gigawatts. Historical data is shown in red while central outlooks from successive editions of the WEO are shown in shades of blue. The WEO STEPS is shown in black. The dashed line shows gross additions, taking into account the replacement of older capacity as it retires after an assumed lifetime of 25 years. Source: Carbon Brief analysis of the IEAAnnual net additions of solar capacity around the world, gigawatts. Historical data is shown in red while central outlooks from successive editions of the WEO are shown in shades of blue. The WEO STEPS is shown in black. The dashed line shows gross additions, taking into account the replacement of older capacity as it retires after an assumed lifetime of 25 years. Source: Carbon Brief analysis of the IEA World Energy Outlook and previous editions of the outlook. Chart by Carbon Brief using Highcharts
The story of raised outlooks for solar thanks to updated assumptions and an improving policy landscape is directly contrasting with the picture for coal.
Successive editions of the WEO have revised down the outlook for the dirtiest fossil fuel, with this year seeing particularly dramatic changes, thanks in part to a structural shift away from coal after coronavirus.
The IEA now sees coal use rising marginally over the next few years, but then going into decline, as shown in the chart below (red line). Nevertheless, this trajectory falls far short of the cuts needed to be in line with the SDS, a pathway aligned to the well-below 2C Paris target (yellow).
Historical global coal demand (black line, millions of tonnes of oil equivalent) and the IEAs previous central scenarios for future growth (shades of blue). This years STEPS is shown in red and the SDS is in yellow. Carbon Brief analysis of the IEAHistorical global coal demand (black line, millions of tonnes of oil equivalent) and the IEAs previous central scenarios for future growth (shades of blue). This years STEPS is shown in red and the SDS is in yellow. Carbon Brief analysis of the IEA World Energy Outlook and previous editions of the outlook. Chart by Carbon Brief using Highcharts
This years outlook makes particularly drastic changes for India, where the use of coal in electricity generation is seen growing far more slowly than expected last year.
In the STEPS, coal-fired power capacity would grow by just 25 gigawatts (GW) by , the IEA says, which is 86% less than expected in the WEO . Rather than nearly doubling in size from 235GW in , this means that Indias coal fleet would barely grow over the next two decades.
Similarly, growth in the amount of electricity generated from coal in India is now expected to be 80% slower than thought last year, according to the IEA figures.
Heres a remarkable detail buried in @IEA #WEO20
Simon Evans (@DrSimEvans) October 15,
India will build 86% less new coal power capacity than expected last yr
Long seen as driving global coal growth, IEA now says India will add just 25GW by
The result? Global coal capacity will fall.https://t.co/bt7QfouTAf pic.twitter.com/SUDlaMo8so
The IEA expects continued rapid retirements of old coal capacity in the US and Europe, which would by close 197GW (74% of the current fleet) and 129GW (88%) respectively.
Taken together, and despite a rapid expansion in southeast Asia, this means the outlook for the first time sees the global coal fleet shrinking by .
Taken together, the rapid rise of renewable energy and the structural decline for coal help keep a lid on global CO2 emissions, the outlook suggests. But steady demand for oil and rising gas use mean CO2 only flattens off, rather than declining rapidly as required to meet global climate goals.
These competing trends are shown in the chart, below, which tracks primary energy demand for each fuel under the IEA STEPS, with solid lines. Overall, renewables meet three-fifths of the increase in energy demand by , while accounting for another two-fifths of the total. Smaller increases for oil and nuclear are enough to offset the decline in coal energy use.
Global primary energy demand by fuel, millions of tonnes of oil equivalent, between and . Future demand is based on the STEPS (solid lines) and SDS (dashed). Other renewables includes solar, wind, geothermal and marine. Source: IEAGlobal primary energy demand by fuel, millions of tonnes of oil equivalent, between and . Future demand is based on the STEPS (solid lines) and SDS (dashed). Other renewables includes solar, wind, geothermal and marine. Source: IEA World Energy Outlook . Chart by Carbon Brief using Highcharts
The dashed lines in the chart above show the dramatically different paths that would need to be followed to be in line with the IEA SDS, which is roughly a well-below 2C scenario.
By , although oil and gas would remain the first and second-largest sources of primary energy, there would have been declines in the use of all fossil fuels. Coal would have dropped by two-thirds, oil by a third and gas by 12%, relative to levels.
Meanwhile, other renewables primarily wind and solar would have surged to third place, rising nearly seven-fold over the next two decades (+662%). The SDS sees smaller, but still sizeable increases for hydro (+55%), nuclear (+55%) and bioenergy (+24%).
Together, low-carbon sources would make up 44% of the global energy mix in , up from 19% in . Coal would fall to 10%, its lowest since the industrial revolution, according to the IEA.
Despite these rapid changes, however, the world would not see net-zero CO2 emissions until , some two decades after the deadline that would be needed to stay below 1.5C.
This is despite the SDS including full implementation of the net-zero targets set by the UK, EU and most recently China.
Global emissions are set to rebound much more slowly than after the -09 financial crisis.
Fatih Birol (@IEABirol) October 13,
But #WEO20 makes it clear that the is far from putting emissions into decisive decline. And low economic growth is not a low-emissions strategy.
More: https://t.co/Iu4KdrI6N9 pic.twitter.com/IfEjXQb4Er
(These targets would be only partially implemented under the STEPS, based on the IEAs assessment of the credibility of the policies in place to meet the goals. For example, table B.4 of the report says that under the STEPS, there is only some implementation of the UKs legally binding target to reach net-zero greenhouse gas emissions by .)
The NZE case, describing a route to 1.5C, has been published for the first time this year, because the WEO team agreed it was time to deepen and extend our analysis of net-zero emissions, according to IEA director Fatih Birol, writing in the reports foreword.
Over the past 18 months, major economies announcing or legislating net-zero emissions targets include the UK and EU. Most recently, China announced its intention to reach carbon neutrality by . [Forthcoming analysis for Carbon Brief will explore the implications of this goal.]
Carbon Brief analysis of the last four WEOs shows that these developments along with the publication of the Intergovernmental Panel on Climate Change (IPCC) special report on 1.5C in have been accompanied by a significant uptick in coverage of these topics in the WEO.
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Whereas the WEO used the phrase 1.5C less than once per 100 pages, this increased to five uses in and eight uses per 100 pages in . The usage of net zero is up from once per 100 pages in and , to six in and 38 per 100 pages in this years report.
However, the NZE case is not a full WEO scenario and so it does not come with the full set of data that accompanies the STEPS and SDS, making it difficult to fully explore the pathway.
This seems bizarre, says Dr Joeri Rogelj, a lecturer in climate change and the environment at the Grantham Institute at Imperial College London and a coordinating lead author of the IPCC 1.5C report.
The IEA already publishes lengthy annexes, with detailed information on the pathway for different energy sources and CO2 emissions from each sector, in a range of key economies around the world, under each of its main scenarios. (This year these are the STEPS and SDS.)
Rogelj, who last year joined scientists and NGOs calling for the IEA to publish a full 1.5C scenario, tells Carbon Brief that all underlying data of the NZE case should be made available with the same detail as the other WEO scenarios.
Carbon Brief has asked the IEA for such data and will update this article if more details emerge. Rogelj adds:
The main question, of course, is how the NZE intends to reach its objective of net-zero CO2 emissions in . Of particular interest here is how much and which type of CO2 removal [negative emissions] the scenario intends to use and how it intends to do so while ensuring sustainable development.
The WEO devotes a full chapter to the NZE, with a particular emphasis on the changes that would be needed over the next decade to .
(It also compares the pathway to those set out in the IPCC special report, saying that the NZE case has a comparable CO2 emissions trajectory to the P2 scenario, which stays below 1.5C with no or low overshoot and has relatively limited use of BECCS.)
THREAD: The @IEA now has an aggressive 1.5°C scenario, reaching net-zero by .
Glen Peters (@Peters_Glen) October 15,
It builds on the Sustainable Development Scenario, strengthening reductions in power & end-use, but with new behavioural measures.
The light blue scenarios are IPCC SR15.https://t.co/RB9jajDICn pic.twitter.com/HETn2c3Icn
The chart below shows how CO2 emissions effectively plateau to in the STEPS, remaining just below the level seen in , whereas the NZE case sees a decline of more than 40%, from 34bn tonnes (GtCO2) in to just 20GtCO2 in .
The power sector contributes the largest portion of the savings needed over the next decade (orange wedges in the chart, above). But there are also important contributions from energy end-use (yellow), such as transport and industry, as well as from individual behaviour change (blue), explored in more detail in the next section.
These three wedges would contribute roughly equal shares of the extra 6.4GtCO2 of savings needed to go from the SDS to the NZE in , the IEA says.
The NZE case would see low-carbon sources of electricity meeting 75% of demand in , up from 40% today. Solar capacity would have to rise at a rate of around 300 gigawatts (GW) per year by the mid-s and nearly 500GW by , against current growth of around 100GW.
CO2 emissions from coal-fired power stations would decline by 75% between and . This means the least efficient subcritical coal plants would be phased out entirely and the majority of supercritical plants would also close down. The WEO says the majority of this decline would come in southeast Asia, which accounts for two-thirds of current global coal capacity.
Although nuclear would contribute a small part of the increase in zero-carbon generation by in the NZE, the IEA notes that the long lead time of large-scale nuclear facilities limits the technologys potential to scale more quickly this decade.
For industry, CO2 emissions would fall by around a quarter, with electrification and energy efficiency making up the largest shares of the effort. More than 2m homes would get an energy efficiency retrofit during every month this decade, in advanced economies alone.
In the transport sector, CO2 would fall by a fifth, not including behavioural shifts counted below. By , more than half of new cars would be electric, up from around 2.5% in .
For the first time, this years outlook contains a detailed analysis of the potential for individual behaviour change to reduce CO2 emissions. (This is clear even at a simplistic level, with the word behaviour mentioned 122 times, against just 12 times in .)
Behavioural shifts, such as cutting down on flights and turning down air conditioning, will play a vital role in achieving net-zero emissions, according to the report.
While the SDS calls for modest changes to peoples lifestyles, such as increased use of public transport, these choices only make up 9% of the difference between that scenario and the STEPS.
By comparison, in the NZE these changes are responsible for nearly a third of the CO2 reductions relative to the SDS in .
The report includes a detailed analysis of estimated emissions savings from the global adoption of specific actions, including a global switch to line-drying laundry, slower driving speeds and working from home.
The authors estimate that 60% of these changes could be influenced by governments, citing widespread legislation to control car use in cities and Japans efforts to limit air conditioning in homes and offices.
As the chart below shows, changes to peoples transport choices account for the majority of the emissions savings. Road transport (blue bars) accounts for more than half the savings in and significantly reducing the number of flights accounts for another quarter (yellow).
Around 7% of CO2 emissions from cars come from trips of less than 3km, which would take less than about 10 minutes to cycle, according to the authors. In the NZE scenario, all of these trips are replaced with walking and cycling.
The report estimates that behaviour shifts could cut emissions from flying by around 60% in . These include substantial changes, such as eliminating flights of less than one hour long, as well as reducing numbers of both long-haul and business flights by three quarters.
Even so, due to the growth in aviation that is otherwise expected, total aviation activity in would still remain around levels in this scenario.
The remaining savings come from decisions to limit the use of energy in homes, such as turning both heating and air conditioning systems down.
Working from home has the potential to save emissions overall, as the reduction in emissions from commuting is more than three times larger than the increase in residential emissions.
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The report estimates that if the 20% of the global workforce who are able to work from home did so for just one day a week, in this would save around 18m tonnes of CO2 (MtCO2) globally, as the chart below shows.
In fact, the NZE scenario assumes that all those who are able to do so, work from home three days a week, amounting to a relatively modest 55MtCO2 savings.
Due to wider changes in the energy mix in NZE, the emissions impact of widespread home working is small when compared to the current situation, shown in the left-hand column, or STEPS in , shown in the middle column.
While the report focuses on CO2 emissions from the energy system, it also alludes to the high levels of methane and nitrous oxide resulting from global agriculture and livestock farming in particular.
It notes that without shifts towards vegetarian diets it will be very difficult to achieve rapid emissions reductions.
The authors acknowledge that universal adoption of the proposed behaviour changes is unlikely, but suggest there are alternative ways in which such changes could combine to yield similar results.
For example, though some regions may not introduce tougher speed limits, others might decide to cut driving speeds by more than the 7km/h suggested in the report.
Simon Evans was one of more than 250 external peer reviewers who read sections of the World Energy Outlook in draft form.
Sharelines from this story
Solar is now cheapest electricity in history, confirms IEA
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Analysis: Critical decade for climate says IEA World Energy Outlook
Traditional solar cells are produced from crystalline silicon, which costs a lot of energy to make.
There are efficient alternatives to silicon, but these materials are scarce. And if the world is going to increase its use of solar energy then we need to find more easily sourced alternatives.
As part of a consortium of eight universities working to improve the efficiency of next generation photovoltaic devices, researchers at the University of Bath are looking for such sustainable materials.
They are also looking at novel types of solar cells, particularly ones which can be made very light and flexible, unlike conventional silicon cells, 'which have to be protected by glass plates - making them fragile and heavy.
These new solar cells will work in diffuse light, so will be much more appropriate for use in the UK, and the rest of northern Europe.
Their work falls into three broad areas:
To overcome the limitations of the current generation of silicon-based solar cells, theyre looking at new materials which have similar energy conversion performance but are cheaper to produce on a large scale.
In order to identify potentially suitable materials, they perform computer simulations on the fundamental building blocks of matter atoms, ions and electrons. This involves combining high-performance computing resources with quantum chemistry, developed over the last century.
The ultimate aim is to predict the properties and performance of materials even before theyve been made in the lab.
One recent success is Kesterite, a new material formed from just copper, zinc, tin and sulphur. All are quite low-cost and abundant elements important factors when looking to scale up solar cell technologies to meet a significant fraction of our energy needs.
Once they have a robust theoretical understanding of how the material works how it interacts with light, and how we can optimise its performance they pass this information on to experimental collaborators who synthesise the materials.
Once the materials are synthesised, they are put into test cells typically one centimetre squared and their efficiency and behaviour are measured.
Then some whole device modelling is conducted, to better understand how all the different materials in the solar cells interact with each other.
Designing the cells to be as efficient as possible requires working out whether charges have been generated, their trajectories as they flow through the device, how they get out and where losses have occurred en route.
By comparing predictions of how charges are generated in the computer simulations with measurements from the initial prototypes, the researchers are able to update their knowledge of how these cell works. And more importantly, how they stop working - because the cells degrade quite quickly.
This process plays an important role in developing designs that give the solar cells a longer lifetime.
Designing the cells to be as efficient as possible requires working out whether charges have been generated, their trajectories as they flow through the device, how they get out and where losses have occurred en route.
By comparing predictions of how charges are generated in the computer simulations with measurements from the initial prototypes, the researchers are able to update their knowledge of how these cell works. And more importantly, how they stop working - because the cells degrade quite quickly.
This process plays an important role in developing designs that give the solar cells a longer lifetime.
There are several sustainable options for future solar cells.
Kesterite materials absorb light very strongly.
Using much less material than silicon-based solar cells, they could drive down the cost of the overall device, while maintaining similar performance.
Containing a translucent molecular dye that absorbs sunlight - like the chlorophyll in green leaves - they're much more portable and flexible than traditional solar cells.
Applications include painting the roofs of buildings, so they act as giant solar panels; coating windows; or incorporating them in clothing to power phones and similar devices.
Organic solar cells convert light to electricity using carbon-based molecules that are semi-transparent and tuneable to any colour. Their flexibility and ease of production mean that achieving greater efficiency in changing light to electricity could make these cells cheaper and easier to deploy than silicon-based cells.
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