A limited world energy outlook

The International Energy Agency is once again being widely criticised for underestimating the potential of renewable energy. If the recommendations contained in its latest World Energy Outlook report are accepted as the basis for future energy policy, the growth of renewables will slow and greenhouse gas reduction goals will not be met, warn critics.

Last month, the head of the OECD's energy strategy advisory body, Nobuo Tanaka, spoke out on the pressing need to radically change the global electricity supply system for the sake of the economy, the climate and the future well being of society. Even so, the International Energy Agency is still choosing not to provide all the information that political leaders require to understand the full potential of renewables, wind in particular

The International Energy Agency (IEA) is once again being widely criticised for underestimating the potential of renewable energy. If the recommendations contained in its latest World Energy Outlook report are accepted as the basis for future energy policy, the growth of renewables will slow and greenhouse gas reduction goals will not be met, warn critics. The IEA's analysis in the 2008 report is flawed and should not be relied on as the roadmap for new energy and climate change policies, they stress. Better information on the role renewables can play, particularly wind energy, is available, they point out.

The backlash came last month, even as the report demonstrates that the IEA is more supportive of renewables than previously. The agency has revised its wind power development forecasts upwards, is warning that "the era of cheap oil is over" and is calling for a "global energy revolution" to replace a business as usual scenario that will only exacerbate climate change. "We cannot let the financial and economic crisis delay the policy action that is urgently needed to ensure secure energy supplies and to curtail rising emissions of greenhouse gases," declared the IEA's head, Nobuo Tanaka, at the London launch of the World Energy Outlook 2008 (WEO 2008) in mid November. "We must usher in a global energy revolution by improving energy efficiency and increasing the deployment of low carbon energy," Tanaka said. "Current trends in energy supply and consumption are patently unsustainable -- environmentally, economically and socially. They can and must be altered."

The grand words, however, are not matched in the details of the report. Even the IEA's most ambitious scenario limits wind power's growth to less than its current trajectory and far less than the wind industry's projections (figure right), which are already renown for being too conservative and historically undershooting actual growth by several years. The pessimism with which the IEA views wind's potential is not applied to its view of nuclear power. Although nuclear's future role is downplayed by the IEA compared to its previous WEO reports, the agency not only sees significant growth for the sector, but believes such growth is essential to achieve climate emission reduction goals. Heavy investment will also be needed in carbon capture and storage (CCS), says the IEA, an as yet unproven technology.

What not to do

Tanaka believes the analysis set out in WEO 2008 "will provide a solid basis for all countries seeking to negotiate a new global climate deal" in Copenhagen next year, when the UN Conference of the Parties meeting is held to secure a new post-2012 climate change agreement to replace the current Kyoto Protocol. Others disagree.

"The IEA has produced an example of what not to do," says Sven Teske of environmental campaign group Greenpeace. "It still underestimates the contribution that renewable energy can deliver," adds Stefan Gsänger of the World Wind Energy Association, saying the agency fails to fully realise the dynamics and economics of renewable energy. "The new World Energy Outlook may, as a kind of self-fulfilling prophecy, mislead policy makers to make poor decisions by not putting enough focus on renewable energy and thus slowing down the renewable energy deployment rates," he warns. "Governments around the world should understand that wind and other renewable energy technologies can be implemented immediately, providing practically infinite energy at low cost." While more moderate in tone, Arthouros Zervos of the Global Wind Energy Council (GWEC) agrees. "The IEA is still a bit too conservative," he says.

WEO 2008 sets out three policy scenarios to 2030: a "reference" scenario, based on "business as usual" trends with no new government policies introduced; a moderate scenario, based on stabilising greenhouse gas concentrations at 550 parts per million (ppm) of carbon dioxide (CO2) equivalent; and an ambitious scenario for stabilisation at 450 ppm. In each of these, the IEA recognises that wind power will play the leading role for renewables deployment in any future energy strategy.

Three IEA scenarios

Under the reference scenario, the contribution of renewable energy, including hydro, to global electricity supply will increase from 18% in 2006 to 23% in 2030. In the OECD bloc, the rise of renewables will be twice as fast to 2030, with the contribution increasing 10% to reach 26%. Most of the increase will come from wind and hydro. On a business as usual trajectory, non-hydro renewables will provide 9% of world electricity by 2030. Wind capacity will increase 11-fold, representing a 10.7% growth path that will make it "the second largest source of renewable electricity after hydro by 2010." The EU will lead the way, according to the IEA. Wind will supply 14% of the EU's electricity by 2030, accounting for 60% of the increase in total EU electricity generation between 2006 and 2030, given no more than business as usual.

If policies to accelerate the growth of renewables are implemented, the IEA's moderate 550 ppm scenario sees construction of 358 GW of wind plant (310 GW onshore and 48 GW offshore) between 2007-2020, with a further 446 GW (353 GW onshore and 93 GW offshore) being added in the following ten years to 2030 (Fig 1). Added to the baseline 74 GW in 2006, this brings wind capacity to 432 GW in 2020 and 878 GW in 2030.

If politicians decide to bring emissions down to 450 ppm, the IEA expects another 248 GW of onshore wind and 29 GW offshore wind to be added to 2030, bringing the agency's most ambitious projection for wind capacity to 1155 GW.

Even at their most ambitious, the IEA's projections for wind power construction are 40% lower than those mapped out by the Global Wind Energy Council in its "moderate" scenario. GWEC points out that there is no reason to expect such slow growth -- global installed wind capacity has been growing at a cracking 28-30% over the past ten years. The more than 100 GW installed today already meets 1.5% of global electricity demand, says GWEC. According to GWEC's "advanced" scenario, in a just released Global Wind Energy Outlook 2008 (box), wind will hit more than 1000 GW by 2020, producing over 2600 TWh, or 12%, of the world's electricity.

By 2030, given the right policies world wind power could rise to 2300 GW, producing 5400 TWh and displacing more than three billion tonnes of carbon dioxide emissions annually, says GWEC. The capacity prediction is about twice what the IEA believes wind is capable of, even with the power sector undergoing "dramatic change."

Independent studies

Of several documents released by clean energy campaign groups just prior to the IEA's report, the Renewable Energy Outlook 2030 by Germany's clean Energy Watch Group is one of the most bullish on renewables. It counters the IEA's projections across the board, arguing that renewables can contribute the lion's share of power supply in the mid term. More than 60% is possible by 2030, says the watch group, given the right policies. Under the IEA's 450 ppm scenario, low carbon energy, defined as hydropower, nuclear, biomass, other renewables and fossil fuel plants equipped with CCS, would account for 36% of supply.

From Greenpeace, Teske points out that even in the IEA's most optimistic scenario, the world is still headed in the wrong direction. "Paying lip service to the climate change crisis, the IEA forecasts more fossil fuel consumption than the planet can handle, while promoting carbon capture and storage and nuclear power," he says. The IEA's 450 scenario would limit global temperature increases to about two degrees Celsius and the 550 ppm plan to around three degrees. "In failing to keep temperature rise below two degrees, it shows that, in fact, we should not be investing in new fossil fuel exploration and production infrastructure, but in renewable power and the smart use of energy instead," says Teske.

In Greenpeace's latest version of Energy [R]evolution: A Sustainable World Energy Outlook, produced in association with the European Renewable Energy Council, Greenpeace shows how renewables, combined with greater energy efficiency, can reduce global energy-related CO2 emissions from today's 28 billion tonnes to 20.9 billion tonnes by 2030. This is half the volume of emissions projected for the same year in the IEA's reference scenario and 20% less than in the IEA's 450 plan.

Unproven and unsustainable

Greenpeace points out that its analysis, which includes long term projections to 2050, with a 50% CO2 cut and a complete fossil fuel phase out by 2090, uses the same assumptions for economic growth, fuel costs and population development as the IEA. Even so, the IEA's most ambitious 450 plan does not see emissions peaking until 2020. In the Energy [R]evolution plan, emissions peak already by 2015, conforming to the deadline the UN International Panel on Climate Change says is necessary to avoid "catastrophic climate change."

Moreover, IEA's 450 plan relies on "unsustainable nuclear power and unproven CCS," says Greenpeace. "The Energy [R]evolution phases out nuclear power and incorporates only proven technologies." Under IEA's scenarios by 2030, CCS capacity needs to reach 162 GW under the 550 plan and 363 GW under the 450 plan. Greenpeace points out that there are currently no commercial CCS plants operating or planned, "yet the IEA believes two to three coal-fired power plants equipped with CCS will be brought online every month between now and 2030." It is "dangerous to rely on a technology for climate protection which virtually does not exist yet," it says. "And it is still unclear if it [CCS] will be available at all before 2030."

Unrealistic nuclear uptake

The projected uptake of nuclear energy in the alternative IEA scenarios are "equally unrealistic," says Greenpeace. In the IEA's reference scenario, which claims that 28 GW of new nuclear is now under construction, nuclear's share of the electricity mix drops from today's 15% to 10% by 2030. In the 550 scenario, this share drops to 14%, but assumes 251 GW of new build by 2030, while the 450 scenario calls for 680 GW. This would require the grid connection of a new nuclear reactor every month until 2030, says Greenpeace, "a volume far beyond the nuclear industry's capacity."

At the same time, the IEA still "neglects the big developments in the renewable power sector," continues Greenpeace. The wind sector is "under-represented." Based on projected growth rates and existing manufacturing capacity, Greenpeace says new renewables such as wind and solar could supply at least 20% of global electricity demand by 2030, rather than the 9% suggested by the IEA in its reference scenario.

Under Greenpeace's Energy [R]evolution scenario, which assumes double the capacity of wind plant assumed in the IEA 550 scenario, renewables would account for almost half of the global power mix. The Energy [R]evolution scenario, adds Teske, would cost just 8% more than the $13.6 trillion investment in the power sector the IEA says would be required under its business as usual scenario, but saves more than $18 trillion in fuel costs. "A renewable energy pathway is good for both the planet and the economy," he says.