IEA director outlines thoughts on energy transitions
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Combustion Industry News Editor
International Energy Agency director Fatih Birol has given an interesting and wide-ranging interview to the Financial Times, coinciding with the release of the World Energy Outlook. Talking about a possible rebound in greenhouse gas emissions from next year, Dr Birol made a point that while many Western oil companies have been making announcements regarding emissions goals recently, they represent perhaps only 10% of global oil production, and for the longer term the remaining 90% will be more important in bringing the world economy into line with the goals of the Paris Agreement. For energy transitions, however, Dr Birol gives four grounds for optimism – falling installation costs for renewables, the present inexpensiveness of finance, that governments and companies are making emissions reductions pledges and plans (albeit not universally), and finally that the pace of innovation in technologies such as hydrogen and carbon capture and storage is “getting stronger”. He points also to how governments across the world seem to be unanimous in their “love” for hydrogen, whereas for most energy technologies governments have different views on what is right for their countries. For oil demand, Dr Birol is doubtful that there will be a peak in demand in the short-medium term, but in the long term he predicts that nations highly reliant on oil for their economies will have no choice but to diversify, and that they should already be doing so. For oil countries and businesses alike, there will be none that “will not be affected by clean energy transitions”. Moving on to the IEA itself, Dr Birol highlighted that China, India, Indonesia, Brazil and South Africa have joined the organisation in recent times, making it more global and less a “rich man’s energy club”; the organisation’s unofficial motto, “the lower the oil prices are, the better it is”, no longer applies, he reasons – on the whole, reasonable prices are better for the economy. At the same time, while oil is still the most strategic commodity in the world, Dr Birol sees its importance diminishing, and therefore its importance to the IEA diminishing. The IEA director finished by describing China’s announcement of carbon neutrality by 2060 as of “historical importance”, and suggested that the detail in China’s next five-year plan, which will be published soon, will “tell us how serious” the country’s government is about emissions reductions.