Global utilities will need to invest US$45 trillion in new infrastructure by 2030 to meet a rapidly growing demand for energy.The development of grid infrastructure will allow the establishment of more efficient and less polluting smart grids that are less vulnerable to rising and volatile fossil fuel prices.
This is according to a report on global energy generation and consumption ‘Better Growth, Better Climate: The New Climate Economy’, released by the International Energy Agency (IEA) in February.
The report discusses trends in the energy sectors of countries at different stages of development and looks at future opportunities for strengthening and diversifying grid systems.
Energy generation impacts
The report also assesses generation and consumption impacts on the environment and economies, barriers to developing less polluting yet reliable grids.
[quote] It also gives recommendations that stakeholders need to implement in the next five-10 years to improve productivity and reduce carbon emissions.
IEA stipulates that decisions to be made in the next 15 years are very critical for the climate as to date, energy production and use account for two-thirds of global carbon emissions due to utilisation of fossil fuels such as coal as major generation sources.
For instance, coal accounts for more than 40% of global electricity production and 73% of the power sector’s carbon emissions.
Smart energy costs
However, to utilities’ advantage is the decrease in the cost of renewable energy sources, a development that will allow increased adoption of less polluting grids.
The report findings states that the cost of wind power is currently one-third or one-quarter what it was 25 years ago while solar has fallen by more than 50% since 2010.
On the side of natural gas, the energy source has recorded an increase in adoption and contributed to a number of closures of coal-powered plants and reduced emission levels.
Besides the significant progress in the adoption of natural gas, the report recommends that national regulatory authorities and regional and international policy boards establish strong policies to limit fugitive methane emissions as well as put a price on carbon emissions and continue to drive the shift towards lower-carbon technologies and smart grids.
Some of the measures the report recommends stakeholders to implement include:
- Adoption of energy demand management initiatives to address the barriers preventing development of energy-productive economic activities and energy efficient end use.
- Launch of global platforms for public-private collaboration for innovation in distributed energy access.
- Governments should make sure that new coal-fired power plants are built when other options have proven not to be viable when considered with the full set of energy objectives.