IEA's Roadmap for Low-Carbon Electrification in a "Golden Age" of Gas
- The IEA's latest Energy Technology Perspectives report provides a roadmap for the long transition to sustainable energy, as well as a report card on its progress.
- It also highlights the tension between the value of natural gas in decarbonizing the current energy mix, and longer-term expectations for phasing out its use.
Last month the International Energy Agency released its latest Energy Technology Perspectives (ETP), a technology roadmap extending out to mid-century, with a major focus on the increasing electrification of global energy against a backdrop of climate change. It may also shed some light on the options for achieving the emissions cuts in the US Environmental Protection Agency's proposed CO2 regulations for power plants.
This is turning out to a big season for climate-change-related reports. The ETP arrived just a week after the US National Climate Assessment, which followed the latest volume of the IPCC's Fifth Assessment Report on climate change. The ETP caught the attention of renewables-oriented news sites for its characterization of natural gas as, "a transitional fuel, not a low-carbon solution unless coupled with carbon capture and storage (CCS)."
That might seem to contradict the general tone of IEA's earlier "Golden Age of Gas" scenario, though when that study was released in 2011 it, too, included caveats about the limitations of gas in reducing greenhouse gas emissions. From that standpoint, the new ETP is no more negative about gas than the relatively rosy (for gas) Golden Age scenario was, and in fact sees gas supporting both "increasing integration of renewables and displacing coal-fired generation."
The IEA's press release for the ETP highlighted the growth of electricity as a major energy carrier, particularly in the developing world, increasing from 17% of final global energy consumption in 2011 to 23-26% by 2050. However, it also noted, "While this offers many opportunities, it does not solve all our problems; indeed it creates many new challenges." Among other things, that alludes to the fact that while renewables such as wind and solar power have been growing rapidly, so has coal use, with the result that, as the ETP launch presentation put it, "the carbon intensity of (energy) supply is stuck."
The emissions benefits of electricity displacing oil from transportation and other fossil fuels from industrial, commercial and residential uses will be largely negated if power generation does not also shift towards lower-emitting sources such as nuclear, hydropower, geothermal, wind and solar power. The "2DS" scenario that received far more attention in the IEA's rollout than the ETP's other two scenarios, provides the prescription and justification for that transition. However, it's important to realize that the 2DS case is not a forecast or prediction; it's what scenario experts might call a "normative scenario"--one that the authors hope to encourage, rather than expect to occur.
2DS reflects the official stance of most member countries of the IEA and links to the low-emission "450" scenario in the agency's current World Energy Outlook. Both are predicated on creating a 50% chance of limiting the average global temperature increase due to climate change to 2°C (3.6°F), compared to pre-industrial conditions. That is generally thought to require keeping the atmospheric CO2 concentration below 450 ppm (0.045%). In their launch presentation for this report, as in other recent reports, the IEA sounded the alarm that this goal may be slipping out of our grasp. April's monthly CO2 average exceeded 400 ppm for the first time since measurements began, and it is growing at around 2 ppm per year.
The IEA makes a good case that the rapid energy transition described in their 2DS scenario is feasible and economically beneficial, despite its $44 trillion price tag, providing substantial future savings in fuel costs, or more modest ones on the discounted cash flow basis on which most investments are premised. However, they are equally candid that reaching this goal will require significantly greater commitments and actions than countries have already made--or than I would assess to be politically feasible in the current global environment.
Renewables may be on-track, but many other aspects of the low-carbon transition aren't. That's especially true for new nuclear power, post-Fukushima, and carbon capture and sequestration (CCS) on which 2DS counts for 7% and 14%, respectively, of emissions reductions through 2050.
It's worth recalling that the main scenario in the World Energy Outlook was not "450", but rather the less-restrictive "New Policies" scenario, which appears to correspond to the middle "4DS" technology scenario of the ETP. (The WEO also includes a status quo "Current Policies" scenario.) In that context we must not let the appealing outcomes envisioned in 2DS obscure the emissions-reducing benefits of natural gas in the world we are still likelier to inhabit, based on current trends, than the one we might desire.
Only under the rapid replacement of fossil fuels by renewables and nuclear power and CO2 sequestration assumed in the 2DS/ "450" scenarios would it be true that, "After 2025...emissions from gas-fired plants are higher than the average carbon intensity of the global electricity mix; natural gas loses its status as a low-carbon fuel." Presumably in the ETP's other two scenarios, that crossover would not happen until much later, if at all.
Gas is thus still a crucial bridge to a lower-carbon world, and it will not lose that status until we have made much more progress in reducing energy-related emissions than seems likely in the near future. While I certainly wouldn't bet against the continued growth of renewable energy, the slow progress of the other elements of decarbonization leaves a vital role for gas to help fuel the beneficial electrification of energy that the IEA has highlighted, for multiple decades.
A different version of this posting was previously published on the website of Pacific Energy Development Corporation.
Photo Credit: Electrification and Natural Gas Boom/shutterstock
Geoffrey Styles is Managing Director of GSW Strategy Group, LLC, an energy and environmental strategy consulting firm. Since 2002 he has served as a consultant and advisor, helping organizations and executives address systems-level challenges. His industry experience includes 22 years at Texaco Inc., culminating in a senior position on Texaco's leadership team for strategy development, ...
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