Global energy investment may rebound to pre-pandemic levels this year, and most of the funds will be used for renewable energy-but in the end, the financing of new power generation capacity will not meet long-term climate goals. Reported by edie.net, the media partner of EURACTIV.
This is based on the 2021 edition of the International Energy Agency (IEA) “World Energy Investment” reportThe report was released today (June 2) and predicts that global energy investment will increase by 10% year-on-year, almost reaching the level before the pandemic.
In energy-related industries, after the level of investment stabilizes from 2019 to 2020, power generation will attract the largest capital, accounting for half of the investment growth.
Encouragingly, the IEA believes that 70% of the total power generation this year will be used for renewable energy. In most regions, solar and onshore wind power may be the most attractive options, with average installation costs falling by 10% and 5%, respectively.
The report states: “Renewable energy is leading the influx of capital into new power generation capacity, and given the damage caused by COVID-19, these investments will remain strong in 2020.
“In 2020, the share of renewable energy in the total power sector expenditure (including network infrastructure) will exceed 45%. As the economy recovers, it is expected that renewable energy investment will further increase in 2021.”
Nevertheless, the IEA urges readers to note that the global energy sector is still unable to achieve net zero emissions by 2050, and if the investment model from 2017 to 2021 continues, the target will not be achieved.
The report highlights how COVID-19 investment in renewable energy has been hit harder than in developed countries in many emerging markets and developing economies (EMDE)—and how many EMDEs prioritize coal and coal in their recovery plans. oil.
The report explained: “The expected recovery is not enough to restore expenditure to pre-pandemic levels. This is largely due to the longer duration of the double crisis of public health and the economy.”
In addition to power generation, many emerging markets and developing economies also lack investment in related infrastructure, especially in Southeast Asia and Africa, and these regions continue to plan “large” coal expansion. For example, by 2045, Vietnam’s coal power generation capacity may double. Overall, the application of coal-fired power plants is 80% lower than in 2016.
In addition, the IEA is concerned that the supporting policies and regulatory frameworks of many developing countries have not yet been aligned with the long-term net zero goal. The report outlines trade agencies’ concerns about “bottleneck” in Europe, where it takes a long time for developers to obtain licenses, and decisions are often challenged in court. The fact that some European oil and gas companies still only use 1-4% of their capital for clean energy, while leaders only allocate about 10% of their capital in this way is also worrying.
Clean energy investment triples and ends coal and oil
The International Energy Agency’s summary of the report stated: “It is estimated that US$750 billion will be spent on clean energy technology and efficiency in 2021. This is encouraging, but it is still far below the funds required to put the energy system on a sustainable development path. By the 2020s, clean energy investment needs to triple to put the world on track to achieve net zero emissions by 2050, thus opening the door to a steady 1.5 degrees Celsius rise in global temperature.”
Comments about the tripling of investment hint at IEA’s recent survey results “Roadmap to Net Zero by 2050” reportThe report is described as the world’s first, stating that the window for achieving net zero emissions by 2050 is “narrow”, but the transformation can be managed to bring “great benefits” in terms of job creation, economic growth and well-being.
It has set more than 400 milestones for the next few decades. Some of the recommended immediate actions include stopping investment in new coal-fired power plants without taking measures to reduce emissions, and plans to stop future fossil fuel supply projects—especially more aggressive projects such as tar sands and Arctic drilling. .
Citing the IEA report, a coalition of 50 campaign groups and non-governmental organizations wrote to British Prime Minister Boris Johnson this week, asking the government to immediately stop issuing new permits for oil and gas projects in British waters.
The authors of the letter, including Greenpeace UK, Oxfam, International Petroleum Change Organization, and the UK Student Climate Network, are also developing new net-zero emission regulations for the industry regulator, the Oil and Gas Administration (OGA).
“Pledged not to invest in oil and gas in the North Sea, and plan to phase out oil and gas in a managed manner in accordance with 1.5C. This will show that the UK can also keep its houses in order; and become a reliable leader in the global energy transition. It can inspire other countries to follow suit,” the letter said. “In addition, this will protect the UK from the risk of stranded assets and help workers in the fossil fuel industry transition to the future low-carbon industry as quickly as possible.”
The call to action was issued after the approval of the British government Controversial North Sea Transition Agreement It did not terminate new oil and gas permits, nor did it provide a timetable for expanding low-carbon solutions.The activity group that pays for pollution is Take the British government to the High Court The transition agreement and OGA’s renewal strategy stated that the sector has “the legal obligation to maximize the recovery of the oil and gas economy.”