As part of our ‘‘WEC Mondays-Guest Speaker Series’’ we hosted Sylvia Beyer, Senior Energy Analyst, G7/G20 Coordinator (IEA).

In Sylvia’s presentation on ‘‘Overcoming the Energy Trilemma’’, Sylvia highlighted:

• Global energy-related CO₂ emissions have reached record levels. Global carbon dioxide emissions from fossil fuels and industry totaled 37.4 billion metric tons in 2023 which is more than a 60% increase compared to 1990 level. Due to unprecedented droughts during 2022-2023 season which drastically decreased global hydroelectricity generation, countries such as China and India were forced to reopen some of their already decommissioned coal power plants for electricity generation. However, advanced economies such as the US, Japan and the EU have seen remarkable CO2 reductions in recent years.

• Global carbon dioxide emissions and total energy demand has started to decouple primarily due to record level increase in clean energy supply. While total global emissions have reached a record high in 2023, annual change from 2022 to 2023 had decreased. In other words, the rate of year-on-year CO2 emissions growth is slowing down.

• In advanced economies, the decoupling of CO2 emissions and economic growth is remarkable. Emissions have fallen back to levels of 50 years ago in G7 countries where GDP has grown more than 3 times.

• Clean energy investment is widening the gap over fossil fuels. Since 2016, clean energy investment has overtaken fossil fuel investment. As of today, for every dollar invested in fossil fuels, about 1.7 dollars are going into clean energy investment, the same ratio was one-to-one five years ago.

• The growth in clean energy investment has been strong, but sadly uneven. There are certainly bright spots in other countries when it comes to clean energy investment, however, more than 90% of the increase in clean energy investment since 2021 has taken place in advanced economies and China. When it comes to clean energy investment, emerging markets and developing economies have 2-3 times higher capital cost than advanced economies due to geopolitical and market uncertainties, less transparency, and lack of strong regulatory framework.

• Unlocking Africa’s energy potential requires more investment. While 20% of the global population lives in Africa, Africa only receives 2% of global clean energy investment. Today, there are 600 million Africans without access to electricity, almost all in sub-Saharan Africa. To reach universal access to electricity by 2030 90 million people would need to gain access each year on average from 2022. Achieving full access to modern energy in Africa by 2030 would require investment of USD 25 billion per year.

• Clean energy technologies will accelerate the needs for critical minerals/metals. Critical minerals availability will pace the transition and requirements for 1.5 DC aligned clean energy technology development. Diversification of supply and security of supply for critical minerals will drive the energy transition. As a result, countries should prioritize policies regarding recycling and reuse of critical minerals in order to build resilience in this highly concentrated supply/refinery chain.

• The historic agreement was signed at COP28. Energy transition is no longer a national agenda anymore. At COP 28, global policy makers agreed to triple renewable capacity and double energy efficiency by 2030. Secondly, for the first time in history, there is a global consensus on Net-Zero Energy System which will be achieved by employing strictly low-carbon energy sources and electrification.

• Tripling of RE capacity by 2030 is within reach but more effort is needed. Massive renewables capacity growth is led by steadily cheaper solar PV, while wind and hydropower’s accelerated expansion is challenged by permitting, financing and social acceptance issues.

• Whether it is Tripling of RE capacity by 2030 or doubling the energy efficiency, Challenges remain for governments to achieve it consistently for the rest of the decade. Although the COP28 target is a global one, each country should take strong and immediate measures to build their own pathways to the global target given their different national, economic, and geographical contexts.

As part of our ‘‘WEC Mondays-Guest Speaker Series’’ we hosted Dr. Paul Dorfman, Chair of Nuclear Consulting Group.

In Dr. Dorfman’s presentation on ‘‘Climate and Power: Nuclear and/or Renewables-Plus’’, Dr. Dorfman highlighted:

• Climate crisis and its impacts have become part of our reality. Compared to previous decades, extreme weather events became more frequent and more devastating in the last decade. In 2023, sea ice in the Antarctic reached an annual maximum extent of 96 million square kilometers(6.55 million square miles), setting a record low maximum in the satellite record that began in 1979. As a result, the rate of precipitation and seasonality had to adjust to new norms all over the world.

• Ocean temperature has hit the highest on record. Extra half a degree difference between 1.5 °C – 2 °C increases the risk of tipping point. On 3^rd February 2024, daily average sea surface temperature set a record high of 21.05 °C, where the previous record was 21.02 °C on 23 August 2023. The difference between where the average sea surface temperature should be and where it is now is quite concerning, not to mention the upward trajectory of average sea surface temperature which is simply alarming.

• To tackle the climate crisis, a historic agreement was signed at COP 28 to triple nuclear capacity to 1.2 TW by 2050 and triple renewable capacity to 11.5 TW by 2030. While the renewable capacity goal is ambitious and certainly brought into the limelight during COP 28, same can not be said for the nuclear capacity goal. In order to explain why nuclear capacity goal is at the backseat of global effort to cope with climate change, we need to investigate the affordability and reliability of nuclear energy given the fact that time is running out.

• The UK has set an ambitious goal to add 24GW of nuclear capacity by 2050, this was enabled by passing of the ‘‘Nuclear Energy Finance Act’’ which reinforced the liberalization of planning, environmental, local democratic accountability rules and norms when it comes to nuclear energy. However, the cost to profit ratio may undermine The UK’s nuclear capacity goal. For instance, the estimated cost for Hinkley Point C Nuclear Power Plant was estimated at £ 18.2 bn in 2016, the updated estimate in 2024 was £31-£35 bn.

• The massive upfront cost of nuclear power plants is one of the many reasons why nuclear energy is falling behind the renewables. The other reason is the Levelized Cost Of Energy (LCOE) for the renewables and other low carbon energy sources. It shouldn’t be surprising to see that LCOE for renewables such as solar and wind are 3-4 times lower than that of nuclear, moreover, even renewables + storage have much lower LCOE than nuclear which explains why renewables are going to do the heavy lifting during the energy transition and not nuclear.

• China is a great example of increasing renewables and nuclear capacity at the same time. However, it must be noted that China has added more wind and solar capacity during the first 9 months of last year (215TWh) than all its nuclear reactors under construction will provide(206TWh).

• Due to lower cost and higher efficiency, IPCC has stated that the renewables are 10 times more efficient than nuclear at CO2 mitigation to 2030. For the reasons that we’ve mentioned above, renewables are attracting most of the investment and finance while, nuclear investment had been on a flat trajectory in the last several decades.

• While the nuclear energy sector was facing challenges such as low investment, huge upfront cost, construction delays and safety issues, the impacts of climate change have exacerbated these existing conditions. Extreme weather events jeopardize the physical safety of nuclear power plants, which can have dire consequences if an accident were to occur.

• Small Modular Reactors (SMRs) are thought to be the solution for traditional nuclear energy’s cost and long build times and other problems, however, SMRs are up to a decade behind large reactors in terms of their commercial development.

• Time is running out. Consequently, we should focus on the expansion of renewable energy in all sectors, raid growth and modernization of the electricity grid and management, energy conservation and efficiency in our efforts to mitigate climate change.

As part of our ‘‘WEC Mondays-Guest Speaker Series’’ we hosted Jim Skea, Chair of the Intergovernmental Panel on Climate Change (IPCC).

In Professor Skea’s presentation on ‘‘Key energy findings from the IPCC Sixth Assessment Cycle and plans for the Seventh Assessment Cycle’’, Professor Skea highlighted:

• The potential impacts of climate change necessitated the need for ambitious climate goals worldwide. If we carry on with current policy, we are headed towards global warming of about 3°C by the end of this century. In contrast, if we were to honor ‘‘The Paris Agreement’’, global warming should be kept within the range of 1.5°C -2°C.

• Future climate change is projected to increase the severity of impacts and will increase regional differences. The direct result of global warming had not only exacerbated the loss of biodiversity and the risk of species losses, but maize and fishery yields regressed drastically as well.

• The risks of climate change differ by system. While the coastal ecosystems seem to have a higher threshold for temperature rise compared to land-based ecosystems, the impacts are devastating in both cases, nonetheless. For instance, the average global temperature of 1°C -1.5°C signals an increase in the length of fire season, we observe 70-90% of warm water coral reefs decline under the same global average temperature.

• Greenhouse gas (GHG) emissions resulting from human activities unequivocally caused global warming and continue to do so. Between 1990-2020, we observed 1-2% increase in greenhouse gas emissions per year over the last 3 decades, except for 2020. Greenhouse gas emissions reached record high in 2023. However, the emissions from the developed economies in North America and in Europe have started to decline in recent years, which didn’t radically affect the total global emissions, since Eastern Asia had been emitting more greenhouse gases.

• CO2 is long-lived. There is a quasi-linear relationship between cumulative CO2 emissions and global warming. With historical emissions have already been put in the atmosphere since the industrial era, the remaining carbon budgets to limit the global warming to 1.5°C could soon be exhausted, while those for 2°C had already been largely depleted.

• Emissions are distributed unevenly, both in the present day and cumulatively since 1850. While North America and Europe are responsible for 40% of historic emissions, whereas Africa and Southern Asia combined account for just over 10%. Moreover, net anthropogenic greenhouse gas emissions per capita today also reflect a similar picture where North America and Europe’s greenhouse gas emissions per capita are 4-5 times higher than that of Africa and Southern Asia.

• The transition towards net zero will have a different pace across different sectors. The first sector which is expected to reach net zero will be in land use/land use change due to forestation and avoided deforestation. The second sector to achieve net zero will be energy supply mainly due to electrification. The transport, industry and buildings will probably be the last sectors to achieve net zero, since transforming the existing infrastructure is costly and challenging. Moreover, Direct air capture and carbon storage and utilization is mainly limited to CO2 at the present time, and technology related to capture other greenhouse gas emissions is still at its infancy.

• The range of demand-side GHG emission reduction potential by 2050 is 40-70% in end-use sectors. However, this can only be achieved if the end-users have the right infrastructure and technology available for them to make greener and more energy efficient choices.

• Carbon Dioxide removal can counterbalance hard-to-eliminate emissions. Given the emphasis on net zero, current removal method is largely limited to improved forest management and afforestation. However, there are other biological and geochemical ways of removing CO2 from the air that are not practiced at a large scale.

• Higher mitigation investment flows are required for all sectors and regions to limit global warming. Current investment flows need a 6-fold increase among all sectors in order to limit global warming to 2°C or below. Specifically, the highest investment gap exists in the transport and agriculture sectors where the current funding needs to increase by at least 7 and 10 times respectively in order to limit global warming to 2°C.

As part of our ‘‘WEC Mondays-Guest Speaker Series’’ we hosted Dr. Roberta Boscolo, Climate and Energy leader at World Meteorological Organization (WMO).

In Dr. Boscolo’s presentation on ‘‘Climate change and its implications on the energy sector’’, Dr. Boscolo highlighted:

• The year 2023 was the hottest year on record. In 2023, global average temperature was above 1°C in all 365 days, only 2 days where the global average temperature was above 2 °C, global average temperature was above 1.5 °C almost 50% of days in 2023. In comparison, global average temperature went above 1.5 °C for only 20% of days in 2016.

• Global temperature change is caused by natural and man-made factors. However, the share of human activities seems to be the major cause of global warming. While, solar cycle and volcanic eruptions and other natural factors are cyclical and subject to natural variabilities, the greenhouse gas emissions have been rising at an alarmingly constant pace since the industrial revolution.

• While the impact of climate change is global, greenhouse gas emissions on the other hand are not evenly distributed. 10% of the population are responsible for more than 40% of global greenhouse gas emissions, the ones who suffer the most are the vulnerable segment of the population with far less carbon footprint.

• Ocean heat content and sea level rise both reached record highs in 2023. Since, ocean absorbs almost 90% of total excessive heat, the rate of sea level rise in the current decade is more than double from the first decade of the satellite record.

• Subsequently, we observed extreme melt season for glaciers in Western North America and European Alps. For instance, in the summer of 2022, we saw 6% mass loss in ice volume in Switzerland, as of today over 10% of ice volumes of the glaciers are lost in Switzerland in the last two years alone. Western North America also recorded the highest glacier mass loss in 2023.

• Water is at the frontline of climate change. Climate change is exacerbating both the water scarcity and water related hazards by disrupting precipitation patterns and the entire water cycle. Consequently, we are experiencing more extreme wildfires, droughts, and floods globally. 3.6 billion people are facing inadequate access to water at least one month a year, it is projected to increase to 5 billion by 2050.

• The frequency and intensity of global disasters are on the rise due to global warming. Climate change will continue to exacerbate the already existing socio-economic problems that we face today, such as poverty, inequalities, population displacement, food security.

• Future emissions will determine the level of changes. Compared to 1850-1900, global surface temperature averaged over 2081-2100 is very likely to be higher by 1.0 °C to 1.8 °C under the very low GHG emission scenario. As a result, we should expect more extreme climate events and be prepared for them.

• The energy sector is not immune to the impacts of climate change. Specifically, extreme weather puts energy infrastructures in grave hazards. Moreover, output from low-carbon energy sources such as hydro, thermal, and nuclear power will suffer the most from the impacts of climate change due to their dependence on water.

• The energy sector is going through a dramatic transformation. In 2022, renewable capacity grew by almost 10%, representing more than 80% of the total net capacity expansion. As a result, many countries are able to decouple their economic growth with greenhouse gas emissions. In COP28, a historic agreement was signed to triple renewable energy capacity and double energy efficiency by 2030.

• The atmosphere has no boundaries. The impacts of climate change are signaling for international cooperation in political, technological, and socio-economic landscape.

Monday, January 08, 2024

As part of our ‘‘WEC Mondays-Guest Speaker Series’’ we hosted Dr. Tatiana Mitrova, Research Fellow at the Center on Global Energy Policy.

In Dr. Mitrova’s presentation on ‘‘Transformation of the global geopolitical order, its implications for the energy security and international energy trade and markets’’, Dr. Mitrova highlighted:

• A new stage of geopolitical transformation is on the rise. Internationalized conflicts have increased nine-fold since 2004. Geopolitical tensions have evolved into proactive military conflicts that we now see in most parts of the world. Russia-Ukraine war is the largest military conflict in Eurasia in the last 80 years. Large scale military conflicts in the Middle East, civil wars in Afghanistan, Myanmar, Republic of Congo, and dozen other states clearly signaling a shift in conflict dynamics in an increasingly multipolar world.

• As a result, the energy sector is facing unprecedented setbacks. For the first time since World War 2, critical energy infrastructures are being targeted during military conflicts. The Nord Stream and Baltic Pipeline explosions are just a few examples of such incidents, and we can expect more critical energy sabotage in 2024.

• As military conflicts increasingly became part of our new reality, we need to redefine energy security in this new paradigm. Revised definition of energy security should not be limited to affordable price, reliability, and resilience of energy infrastructure, but it should prioritize cyber security and the physical safety of energy infrastructures considering the rising military conflicts in the world.

• The old enforcement mechanism is no longer effective. Despite ‘‘the strictest ever sanctions’’ imposed on Russia after the invasion, Russia was quite successful in terms of redirecting its energy exports to more ‘‘friendly’’ jurisdictions which minimized the damages of the sanctions. The Russian economy advanced 3% year-on-year in 2023 which was better than many European economies which reaffirms the ineffectiveness of the old enforcement mechanism in this new geopolitical paradigm.

• Consequently, the world energy market will become more fragmented and far less transparent due to this new geopolitical order. Sanctioned states will seek more shadow markets and non-dollar payments to retaliate which will ultimately result in more uncertainty in the global energy market. The exact price and the volume of the trade are classified in order to protect the sanctioned states from more sanctions. Once a relatively transparent and globalized energy market will become less transparent and more localized.

• The poorest countries of the global south will suffer the most from this less transparent, more volatile global energy market. Comparable to the cold war times, these countries become playing field to competing powers, unlike 1970s, today we have China – a major power who can potentially complicates the new power paradigm.

• The new geopolitical order also opened the gateway to the possibility of numerous energy transition pathways. Countries are developing their own transition pathways depending on their geographical advantages, economic background, and policy preferences.

• However, in a more untransparent, volatile, fragmented global energy market we will encounter more energy security related risks, especially in the absence of working global mechanisms to manage these risks.