Renewable energy has surpassed fossil fuels worldwide as the main source of new electricity generation, the latest report from the International Energy Agency has found.
The premier global energy research group warned that demand for coal is set to slump if the world is to achieve its commitment to limit global warming.
Thermal coal exports will fall nearly 60 per cent by 2040 under a “sustainable development scenario” that would keep global warming below 2 degrees above pre-industrial levels, according to the IEA.
Its latest world energy outlook highlights a huge shift in energy markets, with electricity overtaking oil as the biggest source of growth in energy demand for the first time.
“The electricity sector is experiencing its most dramatic transformation since its creation more than a century ago,” the IEA observed.
“In 2017, global electricity demand grew by 3 per cent, more than any other major fuel,” the report added, citing rising demand in Asia, particularly China and India, as the major driver.
New wind and solar photovoltaic (PV) generation accounted for nearly half of all the additional electricity capacity in 2017, outpacing fossil fuels as renewable energy prices decline, and the IEA said that is set to grow.
“Of the 870 gigawatts worldwide that are currently under construction or are expected to come online by the end of 2020, almost 60 per cent will use renewables-based technologies.”
Solar is growing especially rapidly, with record solar capacity installed over the past year, and is set to become the dominant source of electricity.
“The increasing competitiveness of solar PV pushes its installed capacity beyond that of wind before 2025, past hydropower around 2030 and past coal before 2040,” the report predicted.
Solar, wind can’t provide 100pc of power … yet
The report warns that electricity systems around the globe will have to adapt their technical and regulatory frameworks as the level of variable renewable energy increases, with “the rise of solar PV and wind power [giving] unprecedented importance to the flexible operations of power systems in order to keep the lights on.”
In an interview with the ABC, a senior IEA official said that Australia can go much further in the deployment of renewable energy.
IEA chief economist Laszlo Varro says Australia needs to improve its renewable energy technologies. (Supplied: IEA.)
“If you ask the question ‘can you power 100 per cent of the Australian economy on wind and solar?’, with the current state of this technology the answer is no,” IEA chief economist Laszlo Varro told the ABC.
“Rephrase the question as ‘can you increase the share of wind and solar if you do your homework in improving the system?’ and the answer is definitely yes.”
Coal still ‘the backbone’ of many countries in Asia
He reaffirmed that the market for seaborne, or export, thermal coal used in power generation would slump dramatically under the IEA’s ‘sustainable development scenario’, which assumes that the world implements policies to limit global warming to 1.7 to 1.8 degrees Celsius above pre-industrial levels.
“In our sustainable development scenario, global coal demand by 2040 declines by almost 60 per cent,” Mr Varro told the ABC.
“It doesn’t disappear, because coal is the backbone of many important countries in Asia, but global coal demand declines by more than half.”
However, the world is not on track to achieve the aim of keeping global warming “well below” 2 degrees Celsius that world leaders signed onto at the Paris climate summit, highlighted in the findings of a recent report by UN’s Intergovernmental Panel on Climate Change (IPCC).
The IEA report found current policies and commitments would, at best, limit warming to 2.7 degrees, a level it says would cause catastrophic climate change involving the complete destruction of coral reefs, species extinction, and mass migration of persons displaced by rising sea levels and climate destruction.
“The growth of renewables should not obscure the fact that about 330 GW of new fossil-fuelled power plants are also under construction (approximately 300 GW of which is anticipated to start operation by 2020),” the IEA report noted.
“Coal additions represent the largest share, about 90 per cent of new coal-fired capacity under construction worldwide are deployed in Asia-Pacific, including 62 GW in China, 50 GW in India and 30 GW in Southeast Asia.”