bne IntelliNews – bneGREEN: the G7 could set a green example for the rest of the world
G7 countries have the potential to reach net zero in the power generation sector by 2035 and drive decarbonization in other economies and sectors.
The International Energy Agency (IEA) noted in a report this week that meeting the 2035 target could accelerate the technological advances and infrastructure deployments needed to drive global energy markets towards net emissions to zero by 2050.
The report, which was released at the request of the UK, which currently holds the G7 Presidency, stressed that the G7 can jumpstart innovation and lower the cost of new technologies, while maintaining electrical security.
The new report builds on the IEA’s historic roadmap to net zero by 2050, released earlier this year, and the G7 summit in June. It is designed to inform discussions at the COP26 Climate Change Conference in Glasgow, of which the UK also chairs.
The roadmap calls for an immediate end to new investments in all fossil fuel supply projects, and no further final investment decisions (FIDs) for new, non-idle coal plants.
At their June meeting, the G7 leaders pledged to end relentless public funding for coal by the end of 2021. They also pledged to halve collective emissions over the two decades until the end of 2021. ‘in 2030 and increase and improve climate finance until 2025.
“G7 members have the financial and technological means to reduce their emissions from the electricity sector to net zero in the 2030s, which will create many benefits for the clean energy transitions of other countries and give impetus to efforts. worldwide to achieve net zero emissions. by 2050, ”said Fatih Birol, IEA Executive Director.
“G7 leadership in this crucial endeavor would demonstrate that reaching the electricity sectors with net zero emissions is both feasible and beneficial, and would also lead to new innovations that can benefit businesses and consumers. “
The G7 commitments are crucial to achieving the Paris Agreement goals for 2050, as the G7 now represents nearly 40% of the world economy, 36% of the world’s electricity production capacity, 30% of the global energy demand and 25% of global energy-related carbon. carbon dioxide (CO2) emissions.
The electricity sector now accounts for one-third of the G7’s energy-related emissions, up from a peak of nearly two-fifths in 2007.
In 2020, natural gas and renewables were the main sources of electricity for the G7, each supplying around 30% of the total, nuclear and coal nearly 20% each.
Achieving net zero electricity emissions would require completing the phase-out of coal while simultaneously developing low-emission sources of electricity, including renewables, nuclear, hydrogen and ammonia.
According to the IEA’s trajectory towards net zero by 2050, renewable energies must provide 60% of the G7 electricity supply by 2030, while under current policies they are on the way to ‘reach 48%.
The new G7 report called on countries to demonstrate that power systems with 100% renewable energy during specific times of the year and in certain places can be safe and affordable. At the same time, increased reliance on renewables is forcing the G7 to lead the way in finding solutions to maintain electrical security, including seasonal storage and more flexible and robust grids.
In terms of jobs, reaching net zero in the electricity sector by 2035 would create up to 2.6 million jobs in the G7 over the next decade, but up to 300,000 jobs could be lost in fossil-fueled power plants, with profound local impacts that require strong and sustained political attention to minimize negative impacts on individuals and communities.
“We welcome the IEA report on achieving net zero electricity sectors in the G7. These countries should play a leading role in the energy transition, ”said Gonzalo Munoz and Nigel Topping, United Nations Climate Action Champions.
“The decarbonization of electricity is essential to keep 1.5 degrees alive, as well as to provide the energy needed for the electrification of other sectors. Key G7 milestones in the report include phasing out coal and achieving a 60% share of renewable electricity by 2030 and total net electricity emissions by 2035. The private sector is ready to support this effort.
Net zero preparation
The IEA report comes as the UK has been named the highest ranked G7 member in KPMG’s Net Zero Readiness Index (NZRI). The UK leads the G7, with only Norway judged to be better prepared.
The report compares the progress of a selection of countries in reducing the greenhouse gas (GHG) emissions that cause climate change and assesses their preparedness and ability to achieve net zero by 2050.
Simon Virley, Vice President and Head of Energy and Natural Resources at KPMG UK, said: “The UK has made great strides in decarbonization, particularly in the electricity sector. , over the past decade and we are now halfway to net zero. We also have a strong political consensus and a leading framework for monitoring progress put in place by the climate change law. “
The UK’s electricity sector is largely carbon-free, with coal production due to cease in 2024 and the proportion of renewable energy used in power generation exceeding 40% in 2020, supporting the country’s second place in terms of electricity and heat.
Globally, however, the NZRI has warned that countries are slow to adopt and enact Net Zero goals.
The 32 NZRI countries are responsible for about three quarters of global emissions. Only nine of them, together representing around 10% of emissions, have made legally binding net zero commitments. Ten other countries representing 43% of emissions have set targets but have not put in place legal mechanisms. The remaining 13 countries, accounting for 24% of global emissions, have yet to adopt any form of national Net Zero target.
Governments needed to harness the power of financial markets to deliver Net Zero. Investors and banks are increasingly considering climate risk and the net zero transition in their investment and lending decisions, with increasing growth in climate-related financial products. Governments can support this with measures such as carbon pricing.
In terms of country, Japan was the highest Asian country in 7e place, while South Korea had 15e and Singapore 15e. China was even lower on the list at 20e.
On the other hand, a number of African and Asian countries have been named ‘countries to watch’, where there are significant opportunities to advance decarbonization efforts.
These include India, Indonesia, Thailand, Nigeria, South Africa, Saudi Arabia and Russia.
As always, the IEA welcomed the progress, but warned it was too slow. He is now taking the richest nations of the world as an example of how to finance green technology.
However, barriers to investment will be higher in the developing world, and strong investment networks and established regulatory systems will not necessarily be available.