Despite the worrying effects of climate change being exacerbated by the use of fossil fuels, it seems their demand is still rising. The global use of renewable energy is still lagging behind, however, that is bound to change this decade.
In an op-ed for the Financial Times, Fatih Birol, executive director of the International Energy Agency (IEA), has revealed several preliminary findings of the agency’s annual World Energy Outlook, before its publication in October. According to the report, demand for the three fossil fuels – oil, gas and coal – will peak this decade, being overtaken by renewables by 2030.
We are witnessing the beginning of the end of the fossil fuel era and we have to prepare ourselves for the next era.Fatih Birol, Executive Director IEA
“This year’s report, to be released next month, shows the world is on the cusp of a historic turning point”, Birol wrote. “Based only on today’s policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years. This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people anticipated.”
As governments around the world are increasingly investing in renewable energy sources, production of fossil fuels is bound to lag behind. Even China, the world’s largest is increasingly investing in renewables, mainly solar and wind, Birol pointed out. The spread of electric vehicles is the other major driving factor of this change, according to the IEA executive.
Financial forecasts by IEA’s latest World Energy Investment report estimates that about 2.8 trillion dollars are set to be invested globally in energy in 2023, of which more than 1.7 trillion dollars are expected to go to clean technologies – including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps. Annual clean energy investment is expected to rise by 24% between 2021 and 2023, IEA said, driven by renewables and electric vehicles, compared with a 15% rise in fossil fuel investment over the same period.
Birol however warned that the projections are not as straightforward as they might seem. “The declines in demand also won’t be linear. Although fossil fuels are set to hit their peaks this decade in structural terms, there can still be spikes, dips and plateaus on the way down. For example, heatwaves and droughts can cause temporary jumps in coal demand by pushing up electricity use while choking hydropower output”, he explained.
More worryingly, the foreseen decline in fossil fuels demand is not nearly enough to limit global warming to the 1.5˚C per year target. Birol calls on governments to take “significantly stronger and faster policy action” to ensure a swift and timely switch to renewables.