Opportunities to Transform the Electricity Sector in Major Economies
Summary
The International Energy Agency (IEA) reports significant potential to transform the electricity sector in major economies through improved generation efficiency and accelerated deployment of clean energy. This transformation would result in reduced fossil fuel dependency and lower CO2 emissions, enhancing energy security and mitigating climate change.
Key Points
-
Potential for Improvement: By 2030, the average efficiency of electricity generation from coal could rise to 42% (from 36% in 2008), and that of gas to 52% (from 48%). The share of clean energy in the overall electricity mix is projected to increase to 63% (from 33%), with three-quarters of new capacity additions over 2010-30 representing clean energy.
-
Investment Requirements: Achieving these improvements requires a total investment of $6.5 trillion over 2010-30. This includes an additional $1.5 trillion over the Reference Scenario, with about 85% of the total investment going towards clean energy technologies.
-
Fossil Fuel Savings and CO2 Reductions: Implementing these measures could achieve annual fossil fuel savings of 1,800 million tonnes of oil equivalent (Mtoe) and CO2 emissions reductions of 8.0 gigatonnes (Gt) compared to the Reference Scenario. This represents nearly 60% of the annual world CO2 emissions abatement needed to meet the 450 Scenario.
-
Subsidy Removal: Removing electricity consumption subsidies in major economies could help facilitate this transformation. On average, these subsidies cost major economies $42 billion annually between 2007 and 2008.
Conclusion
Transforming the electricity sector in major economies through improved efficiency and clean energy deployment presents significant opportunities for reducing fossil fuel dependency and CO2 emissions. However, substantial investment and policy changes are necessary to realize these benefits.
