Scarcely a week passes without another handout to add to the pile.

Most of this work has involved undermining anything that promotes renewables and electric vehicles or puts regulatory constraints on large emitters. But the Trump regime has also surreptitiously opened up a somewhat unexpected front in its denialist war: the International Energy Agency’s annual modelling exercise, widely seen as the definitive prognosis for long-term power demand and its impact on the earth’s climate.

Recognizing that forward-looking scenarios help shape the futures they describe, fossil fuel lobbyists and their allies in government mounted a back-channel pressure campaign. They threatened to withhold the United States’ 14% contribution to the IEA’s budget unless the multi-lateral agency stopped talking about third-rail topics like peak oil and instead put out forecasts that muddied the energy transition waters. Their primary target: restoring the IEA’s reliance on an innocuously named energy model, known simply as the “current policies scenario” (CPS), which the Paris-based organization dropped back in 2021, at a radically different political moment.

Guerrilla warfare

When the IEA released its World Energy Outlook (WEO) in October 2021, the agency sketched out two versions of the future: the “stated policies scenario” (STEPS) and the more ambitious “announced pledges scenario.” Together, they provide a view of what 2050 would look like, either with modest progress or bolder ambition, respectively.

Yet in a move that channelled the spirit of that fleeting moment, the IEA added something new and exciting: the “net-zero emissions by 2050 scenario.” This model, it stated, “charts a narrow but achievable roadmap to a 1.5 °C stabilisation in rising global temperatures and the achievement of other energy-related sustainable development goals.” Climate advocates were thrilled by both the IEA’s big goal and its instructions for how to get there. Meanwhile, the Organization of the Petroleum Exporting Countries and U.S. oil and gas interests fumed about all these models forecasting their demise.

It took five years for the backlash to reach IEA’s analysts. For the 2025 edition of the WEO, released in November, the agency’s most ambitious scenario is now STEPS, which scoped out the least aggressive energy transition in 2021. The CPS scenario – which anticipates a catastrophic 3°C increase in global warming by 2050 – was back, while net-zero by 2050 had vanished without a trace. The NZE remains, for now, but Neil Grant, senior climate policy analyst at Climate Analytics, worries about whether it will be excised next year. “If the IEA caves there and gets rid of it, I think you will start seeing people saying, ‘what’s the point?’”

In a lengthy blog post accompanying the new WEO, two senior IEA officials explained the differences between STEPS and CPS with the example of vehicle efficiency standards in Japan. “Under CPS, these policies continue after their end-date but are assumed not to be strengthened,” they wrote. “The STEPS assumes they continue and are strengthened in line with the previous ambition.” The current Japanese policy aims to improve vehicle efficiency by 20% by 2030. Both scenarios reflect the bump, but STEPS predicts that efficiency will continue improving after 2030, while CPS doesn’t assume any more momentum.

“None of the scenarios in the WEO are a forecast,” the authors wrote in a commentary outlining their methods. Nor did the IEA’s use of CPS indicate the presence of a finger on the scale. The IEA’s aim, they said, is to rationally explore the consequences of different policy choices.

It’s clear that there’s been quite a lot of pressure this year in terms of their funding.

— Guy Prince, head of energy supply for Carbon Tracker

But critics didn’t buy the IEA’s wonky explanations about the renewal of empirical rigour, pointing out that CPS ignores the inevitability of continuing technological innovation, takes uninterrupted growth in oil and gas demand as a given, and foresees no drop in emissions. “What the CPS does is take that Trump administration worldview that we’re seeing implemented the U.S. and assumes its dominance across a whole range of other sectors and across the rest of the world,” adds Grant.

In effect, the CPS provides a road map to 2050, but with 2024 policies frozen in place. IEA watchers claimed that its presence is meant to deliver cover to the fossil fuel backers in and around Trump and MAGA congressional Republicans. Indeed, on the eve of the new WEO’s release, which coincided with COP30 in Brazil, a pair of senior congressional Republicans rewarded the embattled agency with a bit of mobbish praise. In a letter, they congratulated IEA executive director Fatih Birol for freeing the agency from the evils of “activism”: “This course correction, which U.S. House Committee on Energy & Commerce leadership has been requesting, will help restore the IEA’s credibility and impartiality.”

“It’s clear that there’s been quite a lot of pressure this year in terms of their funding,” says Guy Prince, head of energy supply for Carbon Tracker. He describes the return of CPS as “a subtle re-positioning” with enormous consequences.

Dave Jones, chief analyst at U.K.-based Ember Energy Research, says that by restoring CPS and situating it as the counterpart to STEPS, the energy agency is signalling a problematic equivalence to global policymakers and investors. “The biggest issue I have with it is that the IEA have used it as equal weighting to the STEPS scenario,” he observes. “I don’t think people expected that to happen.” Most analysts, policy experts and investors would have expected to see CPS offered as a secondary scenario, he says.

The realpolitik here is about buttressing the oil and gas industry’s ability to raise capital and continue operations in the face of an increasingly efficient and inexpensive clean-electricity industry dominated by China, explains Keith Stewart, Greenpeace Canada’s energy analyst. “Adding this scenario is part of that guerrilla warfare going on to try and support an oil and gas industry that is fighting for its life,” he says. “They’re not going to disappear tomorrow, but they can see the writing on the wall unless they can somehow get enough political muscle behind them to stop the transition.” (The Canadian Association of Petroleum Producers did not respond to a request for an interview.)

Slow-walking the energy transition

Trump’s targeted attack on the IEA’s long-range models operate in lockstep with his administration’s shocking assault on science. Since January, a series of moves across the U.S. government have hobbled environmental policy by choking off climate data and cancelling climate science. Agencies that gather and analyze empirical information – the Environmental Protection Agency, the National Oceanic and Atmospheric Administration (NOAA), the Department of Energy, as well as countless university scholars – have had their research budgets slashed, their websites raided and their data streams blocked.

A major concern is access, says Mark Winfield, a professor of environmental studies at York University. “If you were doing observational atmospheric science, for example, are you going to lose data from NOAA satellites and the kind of thing that they use on an ongoing basis? That applies to things like the Intergovernmental Panel on Climate Change, because U.S. science and data underlies an awful lot of that work.”

In the case of the IEA’s models, scenarios aren’t climate science, per se, but they involve complex economics, deep policy research and assumptions about how all sorts of industries will evolve over coming decades; the IEA even publishes a 143-page technical document showing how it builds its scenarios. Like so many other forms of climate data, these models become critical decision-making tools for government officials, investors and other stakeholders, including the fossil fuel industry itself. “They have significant weight,” says Grant. “They’re used a lot in the investment community to decide where we should be putting capital.”

The Trump administration is trying to pull every lever it can to help support its own narrative.

— Dave Jones, chief analyst at Ember Energy Research

Greenpeace’s Stewart points to the various scenarios developed by Suncor for investors back when it was more rhetorically engaged in energy transition debates. The energy giant’s 2022 ESG report talked about how it would adjust its capital investments based on high- or low-demand oil scenarios. “There was a section on how Suncor should change its business model depending on which scenario,” he says, noting that the company walked investors through both high- and low-carbon outlooks, as well as a business-as-usual version, to show their thinking about asset allocation. (Suncor didn’t respond to requests for an interview.)

The IEA’s use of the CPS assumes sluggish innovation in the clean-energy world, but all evidence points to the contrary. “CPS doesn’t reflect the reality of what is happening in terms of new technological deployment,” says Prince at Carbon Tracker. It’s a bit like someone in the 1950s imagining a long-range air pollution forecast that anticipates that leaded gasoline would always be the default vehicle fuel and that nothing like the 1963 Clean Air Act would ever become law. Indeed, CPS isn’t even a business-as-usual scenario; it’s more of a long look in the rear-view mirror at a world that is fast receding into the distance.

The IEA, which stresses that its scenarios aren’t forecasts, defends the reintroduction of the current policies scenario by arguing that as-yet-unforeseen constraints might drag on the current dynamic of change, such as “insufficient infrastructure, grid integration costs, a lack of institutional capacity or financing, or the absence of continued policy support.” As a result, its authors acknowledge, it projects a slower adoption of new technologies than recently seen.

The problem, as history has repeatedly shown, is that neither technological innovation nor economies of scale run in reverse, so CPS doesn’t even function as a bracing worst-case scenario. Stewart points out that Chinese-made solar panels now produce the cheapest energy on the planet, with extraordinary deployment rates, especially in Asia. (China is building an eight-gigawatt solar farm in inner Mongolia that will be 30 square kilometres larger than New York City.) Trump strong-armed constraints on U.S. renewables producers, even as the rest of the world’s nations beat a path to China’s doorstep to place their own mass orders for inexpensive panels and EVs. Such is economics: the evidence suggests that demand for renewables is growing, not slipping.

The bottom line is that the CPS may become the oil and gas sector’s aspirational anchor, a plausible version of the future that it can tout to fossil fuel investors. But the industry will eventually have to confront the implacable fact that it no longer produces a cost-competitive product, much less an environmentally friendly one – regardless of what the IEA’s dubious model envisions.

Jones at Ember Energy Research takes the wide view. The IEA’s decision to bring back CPS, he says, feeds into a broader push to put fossil fuels back to a place of energy primacy – a place the industry feared it had surrendered during the peak oil days. It’s about storytelling, not what’s actually going to happen, Jones observes. “The evidence is the Trump administration is trying to pull every lever it can to help support its own narrative.”

Like so many global institutions that have found themselves under siege from this president, the IEA may find its reputation as an honest information broker broken, which is a scenario no one wants to see.

John Lorinc is a journalist and author specializing in urban issues, business and culture.

The post Is the International Energy Agency bending to Big Oil? appeared first on Corporate Knights.

It was a sunny Saturday, and my co-adventurer and I had paddled through the shimmering waters of Georgian Bay and landed on the distant Beckwith Island, home to beautiful sand beaches on Lake Huron. I had glanced at the weather, noting that a lightning storm was expected to roll in the next day (which we had planned to avoid), but I neglected to check the prevailing wind currents.

Around 4 a.m., I awoke to 50-kilometre-per-hour winds battering the tent and quickly pulled up the wind charts on my trusty BlackBerry. To my dismay, the high winds would hold steady for the next 48 hours.

This was a bit of a problem. I needed to be back in Toronto to present our latest sustainable investment research to attendees at a summit hosted by the Principles for Responsible Investment, whose signatories manage US$121 trillion in assets. 

We tried calling a water taxi, but none were seaworthy in the high winds. So we called members of the Beausoleil First Nation, on whose territory we were trespassing (albeit lightly and with great awe). Sue, who runs the Bayshore Variety, Video & Restaurant on Christian Island, answered the phone and said to give her 10 minutes. Constable Elijah from the Anishinabek Police Service quickly called me back. I confessed our trespasses, but her focus was getting us to safety. A half hour later, a large sturdy Ontario Provincial Police ship motored into the bay to ferry us back to the mainland.

It hit home that we are all in this together, and the human instinct when someone is in harm’s way is to help.

We are all in harm’s way when it comes to the floods, fires and sweltering heat brought by extreme climate change. People, governments and businesses are doing more than we tend to appreciate to get us out of this climate conundrum – which is why more than twice as much clean energy was added to the global mix the past few years compared to conventional energy.

But it isn’t fast enough.

Just like I got distracted by the lightning storm and failed to take note of the prevailing wind patterns, as a society we pay too much attention to the storms and flashes of the political economy, unaware of the prevailing winds of the real economy.

Let’s be clear here: the sustainable clean energy economy is experiencing exponential growth. It is going parabolic because most clean technology options are superior and only getting better.

Corporate Knights data shows that for the large companies that make up 80% of global market capitalization, sustainable revenues and capital expenditures are growing more than twice as fast as everything else over the past five years. This trend holds across sectors and regions and puts the sustainable economy on a path to dominate the global economy by the end of the next decade.

People bay at the moon for political leadership, but it didn’t seem to matter who was president of the United States the past eight years when it comes to this sector. Oil and gas continued to rise under both administrations, yes, but there was no stopping the clean economy, regardless of rhetoric at the top. Clean energy investment surged under Trump and Biden, comprising the bulk of all energy investment under both guys in each of their last years in office, according to data from Clean Investment Monitor and the International Energy Agency’s World Energy Investment. 

While the die is cast on the direction of travel of our global economy, we can speed it up.

Rather than climate transition plans, we need economic transition plans focused on the high-growth areas of our economy – and the climate solutions (the highest-growth part of the economy) will come along for the ride. The main business association in Europe (BusinessEurope) recently embraced this logic, as did the Business Council of Australia a few years ago.

These business associations have critical roles to play in setting the parameters for what is seen as politically possible, and both the U.S. and Canada would do well to get on board.

Roughly 150 countries have set a goal for net-zero, and this target is now backed by financial players representing $150 trillion in combined assets (a 30-fold increase over the past four years). Paraphrasing former governor of the Bank of Canada Mark Carney, when society sets a clear goal and technology makes it possible, it becomes increasingly profitable to become part of the solution and increasingly costly to be part of the problem.

That’s where we are right now. If we want to deploy these climate solutions to power and move our economies, there are some basic things we need to do.

Number one: stop gridlocking renewable-energy potential by updating energy-regulator mandates to focus on rapid permitting and shortening the grid-connection queue. According to the IEA, 1,650 gigawatts (more than double the 666 GW added this year) of clean energy capacity in advanced development stages is waiting for grid connections.

Number two: stop allowing incumbents from the fossil fuel sector (including those with vested interest in dragging out the decline of the internal combustion engine economy) to weaponize our fears about losing jobs (subsidized to the tune of $10 million per job) to China, delaying inevitable balance-sheet write-downs. It does not serve our interest to make trade in low-carbon goods and services a political football.

Number three: start spending more public money now. While the private sector will provide the dominant supply of capital in the latter half of the race to net-zero by 2050, publicly sourced money will be necessary to close the climate investment gap (which sits around 5% of GDP) between now and 2030.

With technology on our side, staying in touch with the prevailing economic winds, and the public purse to help us through choppy waters, blue skies are ahead.

Toby Heaps is co-founder and publisher of Corporate Knights. 

The post Publisher’s Note: Harnessing high winds in times of urgent action appeared first on Corporate Knights.

“Total energy investment worldwide is expected to exceed US$3 trillion in 2024 for the first time, with some $2 trillion set to go toward clean technologies—including renewables, electric vehicles, nuclear power, grids, storage, low-emission fuels, efficiency improvements, and heat pumps,” the IEA writes in a summary of its 2024 World Energy Investment report.

But while countries “have the tools to step up” on renewable energy deployment as they update their Nationally Determined Contributions (NDCs) under the 2015 Paris climate agreement, their plans to accelerate renewable energy adoption aren’t yet on track to meet the 2030 goal they adopted at COP28, the Paris-based agency warns in a separate release.

In last year’s World Energy Investment report, IEA Executive Director Fatih Birol saw clean energy investment “pulling away from fossil fuels,” receiving $1.7 trillion over the year compared to $1 trillion to oil, gas, and coal. “While fossil fuel investment falls behind cleaner alternatives, it’s still set to reach the highest level since before the pandemic,” Bloomberg Green reported at the time. “That would have to start falling sharply this decade to be in line with the IEA’s scenario that would see the planet reach net-zero emissions by the middle of the century.”

This year, “clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy,” Birol said in a release. “The rise in clean energy spending is underpinned by strong economics, by continued cost reductions, and by considerations of energy security. But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains.”

But the IEA also pointed to “major imbalances and shortfalls” in clean energy investment, particularly in developing countries that are receiving only 15% of the global total.

“More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable, and secure energy is severely lacking today,” Birol declared.

The report shows China again accounting for the largest share of global clean energy investment, at $675 billion, followed by the European Union at $370 billion and the United States at $315 billion. Global investment in oil and gas exploration and extraction will rise 7%, to $570 billion, with most of the growth coming from state-owned fossil companies in the Middle East and Asia.

“The report finds that oil and gas investment in 2024 is broadly aligned with the demand levels implied in 2030 by today’s policy settings, but far higher than projected in scenarios that hit national or global climate goals,” the IEA says.

In 2023, the agency adds, oil and gas companies invested $30 billion in clean energy in 2023, just 4% of their total capital spending.

The IEA’s report on national commitments suggests a gap between what countries are doing on renewable energy deployment and what they’ve promised to date in their NDCs. “Governments’ domestic ambitions go much further, corresponding to almost 8,000 gigawatts of global installed renewable capacity by 2030.”

If countries incorporate those plans and estimates in the new NDCs that are due next year, it will bring them 70% of the way to meeting their 2030 target of 11,000 GW.

“This report makes clear that the tripling target is ambitious but achievable—though only if governments quickly turn promises into plans of action,” Birol said. “By delivering on the goals agreed at COP28—including tripling renewables and doubling energy efficiency improvements by 2030— countries worldwide have a major opportunity to accelerate progress towards a more secure, affordable, and sustainable energy system.”

This article was first published by The Energy Mix. Read the original story here. 

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A new report by the International Energy Agency (IEA) reveals that global emissions rose in 2022. That means major emitters such as the U.S. and China are falling further behind in meeting their climate targets.    

“None of these countries are on track for meeting their stated emission-reduction targets,” observes Corporate Knights research director Ralph Torrie. “When the global pandemic hit in 2020, we knew it would cause greenhouse gas emissions to decline, but we hoped the emission decrease could be locked in as economies recovered.” 

Globally, emissions need to decrease by 4% every year if we’re going to reach net-zero by 2050. But in reality, emissions rebounded in 2021 and grew again in 2022 by 0.9%, reaching an all-time high of more than 36.8 billion tonnes of carbon dioxide. “That puts us about where we were in 2019, with the ‘say–do’ gap persisting even as the clock ticks down for countries to hit their 2030 targets,” says Torrie.  

Last year, Corporate Knights released the Earth Index, a tool that measures the annual progress of G20 countries in achieving their 2030 emissions targets. The G20 is responsible for about 75% of global GHG emissions. The 2022 Earth Index revealed that most countries were far behind.

While there is clear evidence that growth in renewable energy and electrification are moderating global emissions, countries will have to redouble their efforts to decarbonize if they are going to meet their official emission targets.  

According to the IEA’s latest figures, the European Union is estimated to have achieved emission reductions of 70 megatonnes (Mt) CO2, or 2.5%, from 2021, which is less than half of the 150 Mt of annual reductions required to meet their 2030 target. The say–do gap is even wider for the United States, where 2022 emissions increased by 36 Mt, or 0.8%, compared to the more than 240 Mt, or 5%, of annual reductions they need to achieve to meet their own target. 

China’s emissions in 2022 were 6.5% above their 2019 levels, but the slight decline over the past year points to the possibility that China may yet be able to deliver on its stated commitment to achieve net-zero emissions by 2060. 

“Every year we fail to narrow the say–do gap, we increase the hardship and costs that will be faced in the future,” says Torrie.  

The post Rising global emissions reveal a troubling ‘say–do’ gap appeared first on Corporate Knights.

The IEA’s first-ever World Energy Employment report says the success of the clean energy transition, made urgent by the energy crisis triggered by Russia’s invasion of Ukraine, rests on the shoulders of those workers.

The report, released last week, forecasts a rapid job shift in the energy sector as decarbonization and net-zero targets push new renewable energy projects online. But the IEA cautions that growth must be coupled with people-centered employment polices to ensure a just transition for workers.

“The transition to a secure and sustainable energy future for all requires unprecedented shifts in the global energy sector,” IEA Executive Director Fatih Birol writes in the report’s foreword. “Its success will depend a great deal on the actions governments, industry, labour representatives, and educators take to prepare the energy work force of tomorrow.” he added.

“Above all, it will depend on the capable workers responsible for designing, building, operating, and overseeing the new energy economy.”

The IEA breaks down energy employment statistics by sector, region, and value chain using data from 2019—the most recent year for which comprehensive numbers are available. It also includes “high-level estimates” of employment in 2021 and 2022, based on new and upcoming projects like building energy efficient power plants, bringing oil wells online, and expanding and updating grids.

The transition to a secure and sustainable energy future for all requires unprecedented shifts in the global energy sector.

-Fatih Birol, executive director of the IEA.

Overall, the energy sector employed more than 65 million people in 2019, roughly 2% of the entire global work force. Jobs were almost equally distributed across fuel supply, the power sector, and end uses like energy efficiency and vehicle manufacturing. Although energy employment fell with the onset of the COVID-19 pandemic, it is now back at pre-pandemic levels and is expected to continue rising through 2022, with clean energy accounting “for virtually all of the growth in energy employment,” the IEA says.

The Paris-based agency says the report is meant to give policy-makers a baseline snapshot that helps them navigate workers away from the declining fossil fuel industry, towards positive employment opportunities in clean energy. Many fossil fuel employees have transferable skills, the IEA stresses: for instance, skills in petroleum and oil engineering are applicable to geothermal energy production, and chemical engineers in refineries can apply their knowledge towards the production of green fuels and hydrogen.

Though energy sector employment is set for its fastest growth in recent years, several risks could derail the momentum, the IEA warns. “Ongoing labour shortages and increased worker turnover are creating challenges for hiring and recruitment,” with oil companies in particular facing challenges hiring and retraining staff. The projections also reflect the rapid shifts under way in the sector, with coal mining jobs especially vulnerable.

The strong demand for highly skilled workers—45% of energy sector jobs are high-skill occupations, compared to an average of roughly 25% across the entire economy—has created a competition for labour that is increasing turnover rates and driving up wages. In this competitive energy labour market, established sectors like nuclear, oil, and gas offer high wages and attract more workers, while those with a high share of construction jobs tend to offer lower wage premiums. Newer sectors also lack the developed union representation of the fossil fuel industries, especially in emerging economies, says the IEA.

Recent legislation indicates support for expanded clean energy employment. The United States Inflation Reduction Act, for example, is expected to continue increasing renewables employment at a rate that exceeds U.S. job growth overall, reports Advanced Energy Economy. Federal incentives are expected to prompt residential solar installation companies alone to take on an additional 340,400 workers over the next five years, says Solar Reviews.

The clean energy work force could also benefit from more diverse hiring practices, the IEA says. Women hold 16% of the jobs in the global energy sector, compared with 39% across the entire economy. The proportion is higher in the U.S., at 30%, but women still hold a smaller proportion of jobs in clean energy than in traditional fossil fuels, says Canary Media.

This article is republished from The Energy Mix. Read the original article.

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The World Energy Outlook is the flagship report issued annually by the International Energy Agency, which coordinates the energy policies of industrial nations. The IEA boasts that the WEO represents “the gold standard of energy analysis.” Industry investors and policy-makers, from government ministers to the Intergovernmental Panel on Climate Change, use WEO’s future-looking scenarios as a guide to allocate capital, influence national energy policy and plan global climate strategy.

But the WEO is a poor guide. The latest Outlook continues a quarter of a century of drastically, persistently and stubbornly underestimating the potential of renewable energy sources. Even as renewables consistently defy the IEA’s figures and develop into an increasingly important part of the global energy mix, the agency shows few signs of change. This should be a cause for concern for everyone affected by misguided energy or climate policy – in other words, all of us. Key decision makers may be relying on inaccurate data at a time of volatility and uncertainty, when clarity and facts matter more than ever.

So unnervingly consistent is the IEA’s underprediction of renewables, it can itself be predicted. And so, before WEO 2018 was launched in Vienna last November, with speeches by former UN Secretary General Ban Ki Moon and IEA executive director Fatih Birol, I scribbled down a prediction for what they would say.

My hypothesis: Dozens of analysts on the World Energy Model team at the IEA would have mined their databases, run every module, run every assumption and number with their 200-strong peer reviewer team, and then … moved their renewables forecasts up by 10%. Again. This turned out to be pretty much on the mark.

Why is this happening?

The IEA takes issue with any characterization of its figures as “forecasts.” It prefers the term “scenario” and points out that the flagship scenario from which the figures are taken, “New Policies,” is predicated on global energy policy remaining as currently announced. As policy develops, so should the scenario, it suggests; as a result, we should expect such evolution over time.

This sounds reassuring, but it is not the reason for its poor predictive performance. At a global level, policy on renewables has not changed dramatically, and certainly not by 10% per year, every year. And it is not the capital-intensive and policy-sensitive renewable technologies such as geothermal, wave or tidal that are driving the delta to the WEO predictions, but just two: solar and wind. In the pithy formulation of Jim Barry, BlackRock’s global head of infrastructure, what has changed is not government policy, but the fact that “the renewables have gotten so cheap.”

The IEA refuses to recognize the extent of the cost changes in solar and wind, and this is the driver of its underpredictions. This is not a new problem for the agency. Already in 2012, industry watchers were pointing out that the levellized costs of solar assumed by the IEA were several multiples above current market prices. And its future cost reduction assumptions were modest – well below the steep “learning curves” of the more than 20% per unit cost reduction that the solar industry was achieving with every doubling of capacity. The hope back then was that the IEA would join forces with its partner agency, the International Renewable Energy Agency (IRENA), which was proving able to track these patterns much more accurately.

This hope has not been borne out. The IEA is now partnering with IRENA to gain historical data on renewable energy costs, but when it comes to future projections, the IEA still refuses to adopt IRENA’s numbers, and continues to substitute costs 20-30% higher.

What can we do about this?

Three pleas to the IEA:

1 – Perform a full model review. More than 20 years of persistent under-calling should indicate that something is wrong.

2 – Listen to your colleagues. Renewables projections are sensitive to the positive feedback effects of learning curves, and specialist agencies have spent decades proving themselves more able to deal with them.

3 – Open-source everything. The World Energy Outlook is too important to global policy to remain closed. Steps such as releasing top-line cost assumptions are welcome, but a model that drives so much public policy should be open to public examination.

There are also steps the rest of us can take while we wait for the IEA to act. In the near term, we should assume that solar and wind costs will stubbornly follow their steep learning curves, while the IEA’s numbers will – equally stubbornly – lag far behind. One can seek alternative sources; organizations like IRENA or Bloomberg New Energy Finance offer less relentlessly conservative views on renewables than does the IEA.

But there’s a more creative path. We can take advantage of the consistency of the IEA’s wrongness on renewables and correct for it, making the assumption that the IEA is currently neglecting future cost reductions to the same extent it has for the last two decades. That is, we take its record of a 10% undercall per year and project it forwards.

Figure 2 shows the result: a surprisingly optimistic, clean, low-carbon path to the future – with more than 50% of global electricity coming from renewable sources by 2030. Such (over) extrapolations must be treated with care, of course. But I look forward to comparing this forecast – sorry, scenario – to those laid out in World Energy Outlook 2030.

If the future is indeed much greener than the conventional crystal balls say, it means that large chunks of the hundreds of billions of dollars being invested in boosting fossil fuel supply (US$715 billion in 2017) face grave risks of being stranded assets, as they are displaced by the quickening march of renewables and electrification.

Paul Mainwood is a former consultant for McKinsey & Company

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