The International Energy Agency’s latest report titled ‘Security of Clean Energy Transitions’ lists challenges and opportunities on the global goal of net zero-emissions.
The report mulls over security implications of global crises at three level — climate emergency, energy crisis and the social and economic fallout of Covid-19 pandemic.
The IEA report comes on the heels of the Group of 20, comprising major economies, meeting that failed to deliver a formal declaration in Bali last week.
IEA Executive Director Fatih Birol urged the G20 attendees to list actions to ensure secure, affordable, and sustainable energy in response to the crisis the world currently faces.
“I firmly believe the G20 – as the premier global forum for dealing with major economic challenges – has not only an opportunity but also a responsibility to take action on this issue,” Dr Birol told the group. He reiterated other experts’ view on the need of more investments in clean energy, specifically in emerging and developing countries.
The IEA report stresses on the security of electricity security. “It is more important than ever and requires risk-based, and integrated approaches.”
Report authors point to extreme weather events, witnessed this summer all over the world, and highlight energy security risks climate change inevitably brings.
They amplify their concerns over rare events that have the potential to impact the world with significant effects or ‘tail risks’. They call for adequacy under a wide range of climate conditions. They urge policymakers to include stress tests that account for extreme weather in their planning studies.
Report authors hail the benefits of power sets up going digital. Digitalisation has made efficient managing power generation and grids as well as the chance of new capabilities and services. The authors flagged the negative aspect of digitalisation. This development has ushered in greater cybersecurity risks. Hi-tech cyber attackers could successfully take control of processes and devices that could either inflict physical destruction or cause widespread power supply disruption. Policymakers come in here. They should ensure using the right tools of deterrence.
The report recommends G20 economies to consider the following in their policies: –
Longer-term visibility of policies governing power set up. Energy integration needs. Give incentives to organisations to manage proper planning up to operations. Equitable redistribution of costs and benefits to support vulnerable consumers. Adopt a risk-based approach to grid security. Understand power dependencies now and in the future. Promoting diverse, clean power solutions. Adapt these solutions to local needs.
Transitions raise new challenges to energy security, the authors say. “Traditional supply security risks linked to oil and gas continue to play an important role in ensuring enough energy supply”.
This year, so far, markets have seen the demand for oil and gas recovering well. Report authors expect this trend to continue, “even during clean energy transitions, far above the path required to achieve net-zero”.
A key issue the report delves on is how consumers see the transition to clean energy towards security, reliability, and affordability. “Price increases can have a disproportionate impact on the most vulnerable consumers, potentially worsening poverty, and inequality. Therefore, it is important that clean energy transitions take place in ways that ensure stability in energy supply and prices”.
The report says oil will remain relevant during the energy transitions. This is good news for GCC. The authors go on to make a case for developing an oil stockholding regime and introducing or strengthening gas storage systems. “The IEA has an oil stockholding need that obligates its member countries to ensure oil stocks of at least 90 days of net imports and has a mechanism to take collective action in case of oil supply disruption. The IEA collective actions that took place in March and April 2022 are examples of co-ordinated international measures to address oil supply disruption against the backdrop of Russia-Ukraine War by which the 31 member countries of the IEA agreed to release well over 180 million barrels of oil from their emergency reserves”. (Sudeep Sonawane, an India-based journalist, has worked in five countries in the Middle East and Asia.)
