IEA: We must change course on energy before it is too late

We built our civilisation by harnessing energy, which is at the core of economic growth and prosperity. But in 2012, in a weak world economy, oil prices soared and carbon dioxide emissions from energy reached record highs. The ways we supply and use energy threaten our security, health, economic prosperity and environment. They are clearly unsustainable. We must change course before it is too late.

This is the International Energy Agency’s (IEA) third comprehensive tracking of progress in clean energy technology. It is a reality check for policy makers: it reflects what is happening here and now. Stark messages emerge from our analysis: progress is not fast enough; glaring market failures are preventing adoption of clean energy solutions; considerable energy efficiency potential remains untapped; policies must better address the energy system as a whole; and energy-related research, development and demonstration all need to accelerate.

In this year’s report we launch the Energy Sector Carbon Intensity Index (ESCII), which shows the carbon emitted for each unit of energy we use and provides a cumulative overview of progress in the energy sector. The picture is as clear as it is disturbing: the carbon intensity of the global energy supply has barely changed in 20 years, despite successful efforts in deploying renewable energy.

I am particularly worried about the lack of progress in developing policies to drive carbon capture and storage (CCS) deployment. Without CCS, the world will have to abandon its reliance on fossil fuels much sooner – and that will come at a cost.

There is a danger, however, in focusing on individual technologies without considering the larger picture. We must invest heavily in infrastructure that improves the system as a whole. Smart grids, for example, make it easier and cheaper to replace fossil-fired power with renewables without jeopardising the reliability of the energy system.

Alongside these grim messages there are also positive developments. In 2012, sales of hybrid-electric vehicles passed the one million mark. Solar photovoltaic systems continued to be installed at a record pace, contrary to many expectations. Emerging economies are stepping up their efforts to promote and develop clean energy. The costs of most clean energy technologies fell more rapidly than anticipated.

Many countries, including emerging economies, introduced or strengthened energy efficiency regulations. Given that the world’s energy demand is set to grow by 25% in the next decade, it is hard to overstate the importance of energy efficiency. The world must slow the growth of energy demand while making the energy supply cleaner.

Each time the IEA assesses the role that technology and innovation can play in transforming the energy system, we are astonished by the possibilities. The 2012 edition of Energy Technology Perspectives showed how the world can slash emissions and save money while doing so. In this report, besides the high-level findings and conclusions in the introduction, each chapter offers specific recommendations by technology and sector.

It is time the governments of the world took the actions needed to unleash the potential of technology. Together with industry and consumers, we can put the energy system on track to a sustainable and secure energy future. We owe it to our economies, our citizens and our children.

Maria van der Hoeven is executive director of the International Energy Agency