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Newsletter of the International Energy Agency
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Engaging with energy and climate leaders at the Nairobi Summit
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A team of IEA colleagues took part in the inaugural Africa Climate Summit in Nairobi to support discussions on Africa’s growing role in global climate and energy issues and the opportunity presented by clean energy for the continent's economic future. Our delegation was led by our Executive Director Fatih Birol, who spoke in key sessions and met with leaders from government, industry and civil society.
Dr Birol emphasised Africa’s huge clean energy potential and highlighted the need for a dramatic increase in energy investment on the continent, which has languished in recent years despite Africa’s major natural resources and its countries’ young and dynamic populations. He also called for a “New Energy Pact for Africa”, a key theme from his recent joint commentary with President William Ruto of Kenya, and urged the international community to enable African countries to swiftly tackle issues of energy access across the continent, particularly access to clean cooking.
To support the discussions at the Summit, we published a new report addressing a critical issue for Africa’s energy future. Financing Clean Energy in Africa – developed in partnership with the African Development Bank Group (AfDB), with a special foreword by President Ruto – was launched by Dr Birol and AfDB President Akinwumi Adesina at a special event in Nairobi. The report found that urgent action is needed to improve access to capital and ease financing costs so African countries can meet their development ambitions, as well as international energy access and climate goals.
On the sidelines of the Summit, Dr Birol co-chaired with COP28 President Sultan Al Jaber the second in a series of high-level dialogues to build consensus around an energy transition aligned with limiting the rise in global temperatures to 1.5 °C. Participants included ministers from Cote d’Ivoire, Ghana, Kenya, Nigeria, Malawi, Mozambique, Sierra Leone, Togo and Zambia – as well as African Union Commissioner Amani Abou-Zeid, US Special Presidential Envoy for Climate John Kerry and other international figures.
Read more about the IEA’s participation in the Summit in our news article and take a look at the new report on financing clean energy in the region.
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The first ever IEA Critical Minerals and Clean Energy Summit
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Next week, we will host the first ever international summit on critical minerals and their role in clean energy transitions at our headquarters in Paris.
The IEA Critical Minerals and Clean Energy Summit on 28 September will focus on measures to promote the secure, sustainable and responsible supply of raw materials that have a central role in the global clean energy transition. The Summit will convene ministers from countries around the world – including both large mineral producers and consumers – as well as business leaders, investors, heads of international organisations and civil society representatives.
Key countries and governmental organisations with high-level participants at the Summit include the African Union, Argentina, Australia, Canada, the European Union, France, Japan, Indonesia, the United States and Zambia – while the private sector is represented by CEOs from a wide range of companies including BHP, Glencore, Rio Tinto and Trafigura.
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The oil market is facing a substantial supply deficit in the months ahead
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The global oil market is set to tighten through the end of the year as China drives record global demand and as Saudi Arabia and Russia extend their output cuts, according to our Oil Market Report for September.
The decision by Saudi Arabia and Russia to reduce production through December will drive a significant supply shortfall in the fourth quarter of this year. This could further push up prices, which breached $90 per barrel in August for the first time in 10 months, adding to the inflationary pressures that are plaguing economies around the world.
The growing strains in the oil market, a risk our monthly report has been warning about since the start of the year, are visible in the sharp drop in global oil inventories. This comes as demand is on track to reach a record 101.8 million barrels per day in 2023, mostly due to resurgent Chinese consumption.
This month’s Oil Market Report comes 40 years after the very first edition appeared in September 1983. The complexity of the international oil market has evolved over the past four decades – but concerns about energy security remain as critical now as they were then.
Find out more in the highlights and overview of this month’s report.
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Peaks in oil, gas and coal demand are in sight in the coming years
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In an opinion article that made waves across the energy world, our Executive Director revealed last week that based on today’s policy settings – and without any new climate or clean energy policies – demand for each of oil, natural gas and coal is set to peak this decade, a historic turning point.
In the article published by the Financial Times, Dr Birol wrote that our flagship World Energy Outlook 2023, to be released next month, shows peaks in demand for each of the fossil fuels this decade for the first time – a moment with major implications for the global energy sector and the fight against climate change.
As a result of these remarkable shifts – driven by the spectacular growth of clean energy technologies such as solar panels and electric vehicles, structural shifts in China’s economy and the global energy crisis – the peak in greenhouse gas emissions is moving closer.
But Dr Birol emphasised that projected declines for oil, gas and coal are still nowhere near steep enough to limit global warming to 1.5 °C. Additionally, demand is set to vary considerably among regions, with growth in emerging and developing economies, notably for gas, partially offsetting the steep drops in advanced economies. And the overall declines are unlikely to be linear. Some investment in oil and gas will still be needed, he notes, while cautioning that increasing it brings both business risks and climate risks.
Read Dr Birol’s opinion article and his related interview with the Financial Times.
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ECB, EIB and IEA to bring decision-makers together on Europe's energy transition
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On 29 September, European Central Bank President Christine Lagarde, European Investment Bank President Werner Hoyer and Dr Birol will host a high-level conference at the IEA’s headquarters focused on the transformation of Europe's energy system.
The IEA-ECB-EIB Conference on Ensuring an Orderly Energy Transition will facilitate discussion on how to ensure Europe’s clean energy future not only aligns with its climate goals but also supports the bloc’s competitiveness and safeguards its financial stability.
Participants will include ministers, central bank governors, business leaders and representatives from international financial institutions and academia. They will tackle a range of issues such as mobilising private sector capital to accelerate new investments and positioning Europe in a highly competitive global landscape for clean technology manufacturing. The role of central banks and supervisory authorities in managing risk related to the transition will also be high on the agenda.
More details can be found here.
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Stronger international cooperation is needed to meet climate goals
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Insufficient progress in transitions to clean technologies and sustainable solutions over the past year highlights the need for better international cooperation, according to the latest Breakthrough Agenda Report.
The new report – an annual collaboration between the IEA, the International Renewable Energy Agency (IRENA) and the UN Climate Change High-Level Champions – shows that current efforts, while improving, are not yet delivering the levels of investment and deployment required to meet international climate goals.
In response, it calls on governments to strengthen coordination in key areas – such as standards and regulation, financial and technical assistance, and market creation – to turbocharge the transition in sectors such as power, transport, industry, buildings and agriculture.
Released just ahead of UN Climate Week in New York, the report examines the advances made and actions needed to meet the goals of the Breakthrough Agenda, a commitment signed by 48 countries representing close to 80% of global economic output. Read the press release and explore the full report.
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Access to electricity improves slightly in 2023
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The pandemic and global energy crisis dealt a blow to progress on improving access to electricity. The number of people without access globally increased last year for the first time in decades, rising by around 6 million to roughly 760 million.
Data from the first half of 2023 suggests a welcome turnaround, according to our new commentary, which draws on findings from our upcoming flagship World Energy Outlook. The number of people globally without electricity access is projected to decrease to 745 million by the end of this year.
Yet the pace at which people are gaining access to electricity still lags far behind the rate seen before the pandemic and remains inadequate to achieve the United Nations’ Sustainable Development Goal 7, which calls for access to affordable, reliable and modern energy for all by 2030.
To achieve this target, more than 120 million people need to gain access each year to 2030. In 2023, this number is set to be less than 30 million.
Find out more ahead of the UN’s SDG Summit in New York this week.
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Last week, we published an in-depth review of Switzerland’s energy policies. It found that Switzerland’s low-emissions electricity system makes it well placed to meet its climate targets, but cutting red tape to speed up deployment of renewables is essential as the country moves away from nuclear power. The report was launched in Bern by our Deputy Executive Director Mary Burce Warlick, who was joined by Swiss Federal Councillor Albert Rösti and Swiss Federal Office for Energy Director Benoît Revaz.
Ambassador Warlick also recently met with Abu Dhabi Department of Energy Undersecretary Ahmed Mohamed Al Rumaithi and his delegation at our headquarters in Paris. They held fruitful discussions on Abu Dhabi's energy transition ambitions and clean energy targets.
The price of clean energy equipment plays a critical role in the global energy transition. To keep an eye on this market, we’ve launched a Clean Energy Equipment Price Index. It tracks price movements in a global basket of solar PV modules, wind turbines, lithium-ion batteries for electric vehicles and energy storage, weighted by shares of investment. After factors such as the soaring cost of critical minerals and disruptions from Russia’s invasion of Ukraine pushed up prices in 2021 and 2022, the index is now back at its 2019 level. Discover more trends in our commentary.
We recently published our first review of Colombia’s energy policies. The analysis found that the country’s energy transition plans – which include a long-term decarbonisation pathway and steps to expand access to electricity and clean cooking – show how a fossil fuel producer can commit to climate action. Read the report.
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Today, 2.3 billion people globally lack access to clean cooking supplies. Instead, they rely on charcoal, firewood, coal, agricultural waste and animal dung as fuel to prepare meals, resulting in significant damage to health, living standards and gender equality. Yet this problem could be addressed with $8 billion in annual investment between now and 2030 – a tiny fraction of what the world currently spends on energy. Read more in our recent special report, A Vision for Clean Cooking Access for All. |
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