Page 5 - AfrElec Week 41 2021

AfrElec COMMENTARY AfrElec

and that action must come from China, India
and Southeast Asia. a minority of these investments immediately
The NZE foresees zero new coal, but the APS deliver zero emissions energy or energy services.
has 200GW of new coal capacity by 2030, and Ensuring that other investments are financed,
the STEPS has 215GW. for example those that aid transitions in emis-
While G7 countries have committed to no sions-intensive sectors, is a key challenge for
new coal, and are putting pressure on other to financiers, investors and policy makers.
follow suit, other countries have not. China, The report makes the point that if the world
however, has pledged to stop financing new coal gets on track for net zero by 2050, the NEZ
abroad, which could prevent 190GW of capacity scenarios, that the potential value of the future
being built, the IEA report says. green tech sector, including wind turbines,
The report says that if policy makers invest solar panels, lithium-ion batteries, electrolysers
enough in green electricity, then 350GW of coal and fuel cells, amounts to $27 trillion by 2050.
capacity would not be needed by 2030. This This would make the green industry larger than
would effectively halt all new investment deci- today’s oil industry and its associated revenues.
sions in the APS and facilitate the retirement of
an extra 150 GW of coal-fired capacity by 2030. Oil and gas demand
Reducing emissions as operating coal plants The report notes that a peak in oil demand could
is a key issue to reaching NZE, the report warns. finally be happening in the 2030s as a result of
In the NEZ, 2030 emissions from existing current policies. Using the STEPS forecasts, oil
coal-fired power plants are three-quarters below demand starts to plateau at 104mn bpd in the
the level in 2020, a reduction of over 7bn tonnes. mid-2030s and then declines very slightly to
Existing plants are either retrofitted with 2050, as a result of more muted growth in petro-
CCUS or co-fired with low emissions fuels such chemicals and faster reductions elsewhere.
as biomass or ammonia; repurposed to focus on By contrast, the NZE requires oil demand to
system adequacy or flexibility; or retired. fall to 72mn bpd by 2030 and to 24mn bpd, a
The retrofit and repurpose options limit the quarter of the levels seen in the STEPS.
impact on workers and local communities, but This would require 60% of all passenger
there is nonetheless a steep increase in plant cars sold globally to be electric by 2030, and no
retirements. new ICE passenger cars are sold anywhere after
Since 2010, coal power plant retirements 2035. Oil use as a petrochemical feedstock is
have averaged around 25 GW each year, largely the only area to see an increase in demand; in
reflecting the closure of ageing plants in Europe 2050, 55% of all oil consumed globally is for
and the United States. In the APS, annual clo- petrochemicals.
sures more than double by 2030. Indeed, the report notes that in the STEPS,
Meeting the goals of the NZE requires annual aggregate fossil fuel demand is set to slow to
retirements averaging over 90 GW over the next a plateau in the 2030s and then fall slightly by
decade, removing around 40% of the existing 2050, the first time this has been projected in
coal power fleet by 2030. this scenario. Almost all of the net growth in
The IEA has made it abundantly clear in its energy demand comes from low emissions
report that there can be not expansion to fossil sources. Therefore, current government policies
fuels, including new oil production. are beginning to make inroads into fossil fuel
“Finally, the world’s leading energy think demand.
tank has created an energy scenario that rules But this is not enough, and NZE requires coal
out expanding fossil fuels and puts it at the heart and oil demand to have already peaked. NZE
of the World Energy Outlook (WEO), their most also calls for global gas demand to peak at 4,300
highly regarded and widely read energy report,” bcm in 2025, falling to 3,700 bcm in 2030 and
said Grenpeace climate change campaigner 1,750 bcm in 2050, compared to 3,910 bcm in
Charlie Kronick. 2020. In comparison, the STEPS scenario sees
gas demand growing to 5,100 bcm by 2050.
Costs By 2050, more than 50% of natural gas con-
Reaching net zero by 2050 requires transition-re- sumed is used to produce low-carbon hydrogen,
lated investment to accelerate from current levels and 70% of gas use is in facilities equipped with
to around $4 trillion per year by 2030, but only CCUS.™

Week 41 14•October•2021 www. NEWSBASE .com P5