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Global Energy Trends and Implications for India (Part 3 of 5): Carbon intensity of electricity is stagnating, but efficiency and renewables can change that

The global energy system is in a period of rapid transformation: electricity plays an ever more important role, as do renewables, distributed generation and electric vehicles. Energy efficiency is improving. Emissions are a large and growing concern. New technologies and business models are disrupting and challenging a traditionally risk-averse and slow-moving industry. The International Energy Agency (IEA) has just published its new “Energy Technology Perspectives” outlining the global trends until 2050 (refer). Here are some of the key findings and the implications they might have for India.

  • The world is currently failing to improve the carbon intensity of its energy supply
  • However, as global energy consumption will grow, it can be decoupled from emissions through efficiency measures and renewables
  • India’s choice of future energy system will be a key determinant of whether or not the world is able to achieve that

blog 23.4.15-1Source: IEA

The Global Context

In order to reach the 2 degrees goal, the world needs to reduce emissions per unit of electricity by 90% by 2050. This can be achieved through fuel switching to renewables (and in the medium term to gas) and through carbon capture and storage (CCS), if this is a commercially viable route.

Currently, as the graph shows, we are failing to reduce the emissions intensity of our energy system. The US has seen a large coal-to-gas shift that has reduced its emissions intensity. Germany, on the other hand, has not significantly improved because in addition to the new renewables it built, it is burning large amounts of lignite. (Highly efficient, new gas-fired power plants are lying idle because their power is not competitive.) China has built large amounts of coal-fired power plants, may of them sub-critical and inefficient.

blog 23.4.15 2Source: IEA

For a decarbonized energy system, we need to bring together new supply choices (like renewables) and CCS with end-user initiatives such as improving the efficiency of energy consumption and applying demand-side management to match demand with renewables generation peaks. As the graph above shows, the IEA projects that reaching a 2 degree climate change goal is feasible, if we improve end-use fuel efficiency (38% of the target change), build more renewables (30%), apply carbon capture and storage to coal- and gas-fired plants (14%), switch end-use fuels from petrol to mostly electricity (9%), build more nuclear power (7%) and improve power generation efficiency and switch from coal to gas (2%).

These measures will be of particular relevance in the developing world. Electricity growth in non-OECD countries will be 300% as compared to the almost flat 16% growth in OECD countries. For India, BRIDGE TO INDIA has predicted a five-fold increase to 5,000 TWh in 20 years.

Implications for India

India is at a crossroads with respect to its energy future. It can choose to go for a more traditional supply model (centralized, coal-heavy) or for a more modern, flexible supply model (higher share of distributed generation, “smart”, solar-heavy). Obviously, the former is highly carbon intensive, while the latter is not.

Because of India’s size, its choice will have an impact on the global scenario. It is difficult to see the world reaching a 2 degrees target without having a strong contribution from India. As the following articles in this series show, investing into a decarbonized energy system makes much more business sense: it is a cheaper, more resilient and secure energy choice.

Tobias Engelmeier is the Founder and Director of BRIDGE TO INDIA

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