The latest edition of the annual ‘World Energy Outlook 2019’ Report highlights again the widening gap between global energy policy trends and the target agreed upon under the Paris Agreement, namely to keep global warming in this century below 2°Celsius above pre-industrial levels and to pursue efforts to limit the increase even further to 1.5° Celsius.
The Report also highlights the fact that 850 million people are still without access to electricity. While global CO2-emissions stagnated in 2015 and 2016, they rose in 2017 and 2018 by 2%. In 2019, emissions peaked to a new historic record and are expected to rise further in the forthcoming years despite worldwide concerns about global warming trends and international climate-related discussions. Given the present global energy megatrends (i.e. rising energy demand), global warming may increase up to 3-3.5° Celsius instead of the agreed target of 2/1.5° Celsius.
Despite some positive trends such as the expansion of renewables (the global market for offshore wind turbines, for instance, grew by 30% between 2010 and 2018) and the falling costs for renewables or the rising share of natural gas as the cleanest fossil fuel, many other trends are still worrying:
Global coal demand: it rose for a second consecutive year in 2018 – with three quarters of the demand coming from the Asia-Pacific region. The amount of coal-fired power generation and consumption even in developing countries increased to a new record of 6,900 TWh. China’s newly built coal-fired power plants exceed the European Union’s capacity. China is also the largest foreign investor of coal-fired power plants.
New clean energy investment: decreased by more than a fifth in developing countries in 2018, while global power generation rose to a new high. China’s clean energy investment alone fell from US$122bn to US$86bn between 2017 and 2018.
Demand for natural gas: the worldwide demand for natural gas has been projected to increase four times faster than the demand for oil as a ‘bridge fuel’ for the energy transition to a decarbonised economy. Natural gas might even replace oil as the world’s most important energy source. But the longer-term climate target to reduce global CO2-emissions by 90% by 2050 cannot be achieved by using more natural gas. The EU already anticipates the replacement of conventional natural gas by ‘green gas’ (biomethane, hydrogen, etc.).
Global Green-House Gas (GHG) emissions: they may rise until 2040, even if governments agree to new climate targets (and nationally determined contributions). Even more worrying is the announcement of the Trump administration to withdraw from the Paris Agreement, and the weakening support of global climate policies by Russia, Brazil, China and African countries. These countries would not accept a reduced economic growth for the sake of more ambitious climate policies nor are they willing to restrict their oil and gas exports as main revenues for their state budgets. In their view, regime and political stability outweigh any ambitious climate protection efforts.
New technologies: while digitalisation and artificial intelligence technologies promise to increase energy conservation and efficiency, electrification and new disruptive technologies (such as block chain, internet of things and, in particular, cryptocurrencies) have been developed without regard to their energy demand. These technologies may dramatically increase the global electricity demand far beyond current predictions. Furthermore, while technology options such as carbon capture, storage and use (CCSU) or hydrogen are already technically available, they are not yet profitable and cost competitive.
Against this background, the Konrad Adenauer Foundation’s Regional Programme Australia and the Pacific in collaboration with the European Centre for Climate, Energy and Resource Security (EUCERS) of the King’s College in London – implemented the 2nd KAS-EUCERS Energy Policy Dialogue in New Zealand and Australia in the first week of October 2019. As in 2018, the German delegation discussed various topics with Australian (and for the first time also with New Zealand) energy experts, representatives of the government, parliament, industry and the academia. The topics ranged from the German Energiewende (energy transition) and its lessons for other countries to energy efficiency, digitalisation and cybersecurity as well as the future potential of hydrogen as a means for storing electricity and overcoming the volatility of renewable-based electricity generation for a country’s baseload capacity. Also this year, as the contributions to this edition of the Periscope show, the various seminars and discussions between the German delegates and their New Zealand and Australian counterparts have underscored our mutual interest in sharing experiences, ‘lessons learnt’ and best practices in our respective energy policies. Particular attention has been paid to future cooperation in regards to energy efficiency, global energy supply security, the potential of hydrogen, critical raw material supply security in the light of the worldwide expansion of electric vehicles and batteries, pathways for an expedited transition to decarbonised non-fossil fuel energy systems and impacts of climate change (such as migration and displacement or geopolitical conflicts including the Arctic as well as the Antarctic). The spirit of our discussions has also been spurred by the mutual recognition of various challenges to China’s energy, raw material and industrial-technology policies as well as an overall understanding that the G20 democracies need to foster their cooperation in regards to energy, climate and industrial policies for a sustainable future of the global order and worldwide stability.