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IEA’s Birol ‘optimistic’ amid ‘huge challenges’

Governments need to take a leading role in supporting technological development and tackling the emissions of legacy power and industrial facilities, he says

There are still “huge challenges” to meeting Paris Agreement emissions targets that will require greater levels of technological development and government support to overcome, according to Fatih Birol, executive director of the Paris-based IEA.

“A key issue is for the governments and investors to make the right technology policies and make the right technology investments. This is extremely critical,” said Birol at the launch of the IEA’s Energy Technology Perspectives (ETP) report this morning.

Birol cautions that the climate debate is “overwhelmingly” concentrated on the electricity sector, but even if it achieved zero emissions that would not be enough, as it accounts for 38pc of total emissions.

38pc – Share of global emissions created by power sector

“The ETP tells us that transforming the power sector alone will only [get us] one-third of the way to net-zero emissions,” says Birol. “Focussing on the  power sector alone will not bring us even close”.

Moreover, he says “the most important blind-spot” in the debate is the focus on building new sustainable plants and factories—but the emissions from power, iron and steel, and cement factories will be with us for many years.

“There is a huge energy infrastructure and they would be, under normal conditions, unless there is government intervention or other good surprises… they will be with us for several decades to come emitting CO2.”

The ETP contains “extremely detailed analysis” of all power plants and factories around the world, covering performance, age, size and emissions trajectories.

“The result is that, without addressing the emission issue of the world's existing infrastructure, we have no chance whatsoever of meeting our energy and climate goals,” says Birol, adding the IEA will highlight this issue with policymakers.

Coal-fired power plants can have a useful lifetime of more than 50 years, and many industrial assets have lifespans of 30-40 years, according to the IEA.

Birol says that there are several “game changing” technologies—including carbon capture and storage, hydrogen and batteries—that “are ready for the big time”.

"Government must determine the fate of these technologies and therefore whether or not we reach our climate goals," he says. “There is a very important job for governments.”

Nonetheless, he adds that there are four broad reasons to be optimistic.

Firstly, solar PV has become the cheapest energy source in many countries and is spreading “everywhere” in the developing world, rather than just China. Secondly, the responses of central banks to the coronavirus pandemic “mean wind, solar and electric vehicles should benefit from ultra-low interest rates for an extended period”.

Thirdly, governments are “throwing their weight behind” clean energy initiatives. And finally, “most companies are stepping up their efforts in clean energy”.

Technological innovation

While there have been huge, sustained falls in the price of critical renewables technology, especially for solar PV, there “is no reason to be complacent”, according to IEA’s head of technology policy, Timur Gul.

“Transitioning the entire energy system to net-zero emissions requires much broader technology efforts than what we have achieved so far,” he says.

“Without addressing the emission issue of the world's existing infrastructure, we have no chance whatsoever of meeting our energy and climate goals” Birol, IEA

Beyond tackling legacy infrastructure, Gul says another main priority is “how to accelerate clean energy innovation” as “it is actually wrong to think that they [transition technologies] are all readily available and do not need further innovation”.

The third critical area he identifies is clean energy infrastructure. “The infrastructures that are required to enable rapid technology deployment that we will need to reach net-zero emissions,” he says.

“Today's infrastructure will continue to emit, if we do not change course, around 750Gt of CO2 over the next five decades. Way too much to reach our ambitious climate goals.”

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