Natural Gas

IEA: Rapid Growth in Natural Gas Demand Is Coming to an End |

The world invests hundreds of billions of US dollars each year in renewable energy and other clean energy solutions, but it needs more than a trillion US dollars of investment per year if it still has a chance of achieving net zero emissions by 2050.

These are some of the main conclusions of the World Energy Outlook 2022 published by the International Energy Agency (IEA) this week.

The deployment of renewable energy sources in electricity is expected to lead to a peak in demand for coal and natural gas by the end of this decade, as the current energy crisis pushes governments to adopt stronger policies to support clean energy and become less dependent on fossil fuels, especially after the Russian invasion of Ukraine, according to the agency.

For the first time ever, an IEA World Energy Outlook scenario based on current government policies and parameters has global demand for each fossil fuel showing a peak or plateau, the IEA said. Even natural gas, whose demand was previously expected to continue to rise, could now join coal and oil to peak around 2030, according to the latest IEA estimates.

In the Declared Policies scenario (NOT), coal consumption is expected to decline over the next few years, natural gas demand is expected to plateau by the end of the decade, and rising electric vehicle (EV) sales mean oil demand will level off. in the mid-2030s before declining slightly in the middle of the century.

“One of the effects of the current crisis is that the era of rapid growth in global gas demand is coming to an end,” said IEA executive director Fatih Birol. said.

“In Europe, climate policies are accelerating the move away from gas. The new supply drives prices down by the mid-2020s, and LNG becomes even more important for gas security,” Birol added.

The recent increase in coal is small and only temporary, according to the latest IEA analysis. At the same time, renewable energies are expected to continue to increase, eating into the share of coal and gas in the energy mix.

The current energy crisis could be the turning point for even greater adoption of renewables, as clean, locally produced energy will reduce dependence on imported fossil fuels.

“The responses from governments around the world promise to make this a historic and definitive shift towards a cleaner, more affordable and more secure energy system,” Birol said.

“The environmental case for clean energy did not need to be strengthened, but the economic case for affordable and competitive clean technology is now stronger, as is the case for energy security. The current alignment of economic, climate and security priorities has already begun to move the dial towards a better outcome for the people of the world and for the planet,” the agency chief said.

In the World Energy Outlook 2022, the IEA said electricity generation from renewables is set to see one of the largest increases in investment in the Net Zero Emissions (NZE) scenario, from 390 billion in recent years to $1.3 trillion by 2030.

This level of annual spending in 2030 is huge, but not unprecedented in the energy industry.

It would equal the highest level ever spent on fossil fuel supply, $1.3 trillion spent on fossil fuels in 2014, the IEA said.

Investment in clean energy is massive today, but it must go up a lot more whether the world has a chance of reaching net zero by 2050.

“A significant increase in energy investment is essential to reduce the risks of future price spikes and volatility, and to be on track to reach net zero emissions by 2050,” the IEA said.

“A smooth and secure energy transition will require a significant increase in clean energy investment flows. Getting on track for the NZE scenario will require tripling spending on clean energy and infrastructure by 2030, alongside a move towards much higher investment in emerging markets and developing economies. .

By Tsvetana Paraskova for

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