The report, The Future of Geothermal Energy, finds that geothermal energy could meet 15% of global electricity demand growth between now and 2050 if project costs continue to decline.

Today, geothermal meets about 1% of global electricity demand. However, the IEA analysis, conducted in collaboration with Project InnerSpace, shows that next-generation geothermal technologies have the technical potential to meet global electricity and heat demand many times over.

Importantly, geothermal energy can draw upon the expertise of today’s oil and gas industries by using existing drilling techniques and equipment to go deeper under the earth’s surface to tap into vast low-emissions energy resources.

“New technologies are opening new horizons for geothermal energy across the globe, offering the possibility of meeting a significant portion of the world’s rapidly growing demand for electricity securely and cleanly,” said IEA executive director Fatih Birol. “What’s more, geothermal is a major opportunity to draw on the technology and expertise of the oil and gas industry. Our analysis shows that the growth of geothermal could generate investment worth $1 trillion by 2035.”

Conventional geothermal remains a location-specific, niche technology today with most of the installed capacity in countries that have either have volcanic activity or straddle tectonic fault lines, which make resources easier to access.

Current leaders in the space include the United States, Iceland, Indonesia, Türkiye, Kenya and Italy.

But new technologies are making the outlook for geothermal truly global, opening up the potential to benefit from it in nearly all countries.

The report highlights that more than 100 countries have policies in place for solar PV and onshore wind, but only 30 have such policies for geothermal.

Moving geothermal up national energy agendas with specific goals and backed support for innovation and technology development can go a long way to reducing project risk perception and unlocking new investment.

Clear, long-term regulatory visibility for investors will help mitigate risks in early-stage development and provide visibility on investment returns, which in turn will improve the cost competitiveness of geothermal projects.

By doing so, the report finds that costs could fall by 80% by 2035 to around $50 per megawatt hour (MWh). This would make geothermal the cheapest source of dispatchable low-emissions electricity on a par with existing hydropower and nuclear installations.

However, permitting and administrative red-tape are proving a major barrier to geothermal projects, which can take up to a decade to fully commission. The report suggests governments could simplify permitting processes by consolidating and accelerating the administrative steps involved.

They could also consider dedicated geothermal permitting regimes separate from minerals mining. Policies and regulations enforcing robust environmental standards are critical for the sustainable development of geothermal projects.

Originally published in Power Engineering International.

This was one of the stand-out findings from the International Energy Agency’s latest report, Global Hydrogen Review 2024.

According to the report, a wave of new projects shows the continued momentum for low-emissions hydrogen despite challenges due to regulatory uncertainties, persistent cost pressures and a lack of incentives to accelerate demand from potential consumers.

The number of projects that have reached final investment decision has doubled in the past 12 months, which would increase today’s global production of low-emissions hydrogen fivefold by 2030. The total electrolyzer capacity that has reached final investment decision now stands at 20 gigawatts (GW) globally.

If all announced projects are realized worldwide, total production could reach almost 50 million tonnes [metric tons] a year by the end of this decade. However, this would require the hydrogen sector to grow at an unprecedented compound annual growth rate of over 90% between now and 2030, well above the growth experienced by solar PV during its fastest expansion phases.

Despite new project announcements, installed capacity for electrolyzers and low-emissions hydrogen volumes remain low as developers wait for clarity on government support before making investments. Uncertainty around demand and regulatory frameworks means most potential production is still in planning or early-stage development, with some larger projects facing delays or cancellations due to these barriers along with permitting challenges or operational issues.

“The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals,” said IEA executive director Fatih Birol. “But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.”

The report highlights a gap between government goals for production and demand. Production targets set by governments worldwide add up to as much as 43 million tonnes [metric tons] per year by 2030, but demand targets only total just over a quarter of this, at 11 million tonnes [metric tons] by 2030.

Some government policies are already in place to stimulate demand for low-emissions hydrogen and hydrogen-based fuels. Examples, such as carbon contracts for difference and sustainable fuel quotas for aviation and shipping, are triggering action on the industry side, leading to an increase in signed agreements between producers and commercial consumers. However, the progress made in the hydrogen sector so far is not sufficient to meet climate goals, the report finds.

As a nascent sector, low-emissions hydrogen still faces technology and production cost pressures, with electrolyzers in particular slipping back on some of their past progress due to higher prices and tight supply chains. A continuation of cost reductions relies on technology development, but also optimizing deployment processes and moving to mass manufacturing to achieve economies of scale.

Cost reductions will benefit all projects, but the impact on the competitiveness of individual projects will vary. For example, hydrogen production via electrolysis in China could become cheaper than hydrogen produced from unabated coal by 2030, assuming the entire global electrolyzer project pipeline of around 520GW is realized.

Industrial hubs – where low-emissions hydrogen could replace the existing large demand for hydrogen that is currently met by production from unabated fossil fuels – remain an important untapped opportunity by governments to stimulate demand.

Originally published by Power Engineering International.

“If coal plants run in line with their economic lifetimes, even if we don’t add a single coal plant, we will exceed the 1.5 degree target.”

So said IEA executive director Fatih Birol at the launch of the new report, Coal in Net Zero Transitions: Strategies for Rapid, Secure and People-Centered Change.

The report calls for a halt to approvals for new unabated coal‐fired power plants and immediate policy action to mobilize financing for clean energy alternatives to coal. This would allow a quick shift away from coal thereby avoiding the severe impacts of climate change.

The new IEA special report provides an analysis of what it would take to bring down global coal emissions rapidly enough to meet international climate goals.

According to the report, the overwhelming majority of current global coal consumption occurs in countries that have pledged to achieve net zero emissions. However, far from declining, global coal demand has been stable at near record highs for the past decade.

If nothing is done, emissions from existing coal assets would, by themselves, tip the world across the 1.5°C limit.

“Over 95% of the world’s coal consumption is taking place in countries that have committed to reducing their emissions to net zero,” said IEA Executive Director Fatih Birol. “But while there is encouraging momentum towards expanding clean energy in many governments’ policy responses to the current energy crisis, a major unresolved problem is how to deal with the massive amount of existing coal assets worldwide.”

“Coal is both the single biggest source of CO2 emissions from energy and the single biggest source of electricity generation worldwide, which highlights the harm it is doing to our climate and the huge challenge of replacing it rapidly while ensuring energy security,” Dr Birol said.

Today, there are around 9,000 coal-fired power plants around the world, representing 2,185 gigawatts of capacity. Their age profile varies widely by region, from an average of over 40 years in the United States to less than 15 years in developing economies in Asia.

Industrial facilities using coal are similarly long lived, with investment decisions set to be made this decade that, to a large degree, will shape the outlook for coal use in heavy industry for decades to come.

Recommendations to reduce coal

The new report includes the following recommendations to reduce coal:

An important condition to reduce coal emissions is to stop approving new unabated coal‐fired power plants – An immediate halt to approvals for new unabated coal‐fired power plants is a key milestone in the net zero emissions scenario. Stepping up policy and financial support for cost‐competitive clean sources of generation, including international climate finance, is essential to close off avenues for continued growth in coal‐fired capacity.

Giving governments confidence that they can forego new investments in coal‐fired plants, and retire old plants, will require scaling up replacements not only for the electricity that coal plants produce, but also the system services they provide – A portfolio of options is required to deliver the flexibility that power systems increasingly need to ensure electricity security, and which today is provided in part by coal‐fired power plants.

CCUS technologies open important potential to mitigate emissions from coal use in both power and industry – There are only five coal‐based CCUS projects in operation, but another 23 are currently under development. If all of these projects are developed, they would capture around an additional 35 million tonnes (Mt) CO2 each year by 2030.

Comprehensive energy transitions can ensure affordability for consumers – Replacing coal‐fired power plants with cost‐competitive renewable technologies allows average system costs per unit of electricity to fall from 2021 to 2050, both in advanced economies and in emerging markets and developing economies.

The IEA’s report emphasizes the need for governments to provide incentives for asset owners to adapt to the transition.

However, favorable economics for clean electricity generation on their own will not be enough to secure a rapid transition away from coal for power generation.

Coal plants are often shielded from market competition, according to the report. Where low-cost financing is the norm, the weighted average cost of capital of coal plant owners and operators is around 7%.

Refinancing to bring this down by 3% would accelerate the point at which owners recoup their initial investment, clearing a path for one-third of the global coal fleet to be retired within ten years.

Besides the right financial landscape, the IEA also suggests international collaboration, public financial support and well-designed approaches that incorporate the need for people-centered transitions will be essential in the move away from unabated coal.

“Nuclear power is making a comeback—and in a strong fashion.” So said IEA executive director Fatih Birol on the renewed interest in nuclear power across the globe.

Birol, executive director of the International Energy Agency (IEA), spoke during a discussion on nuclear power at COP27, focusing on its potential to help achieve net zero emissions.

The discussion was led by IAEA Director General Rafael Mariano Grossi at the #Atoms4Climate pavilion, the first-ever nuclear-themed pavilion in the history of the United Nations Climate Change Conference.

Even though the nuclear power sector is gaining momentum, Birol emphasized that the international financial community had so far failed to provide the level playing field needed for nuclear to help the world tackle its most pressing challenges.

According to the IAEA, countries around the world are showing renewed interest in nuclear power to ensure a secure supply of low emissions energy, including those that previously had sought to phase out the technology.

“Countries that were saying goodbye to nuclear power, they are rethinking their plans,” Birol said, adding that the IEA had been engaged in talks with both Belgium and Germany. “We are very happy that both governments are now in the process of postponing their nuclear phase-out plans, understanding the role that nuclear plays in addressing this energy security challenge,” he said.

A number of countries are looking to extend the lifetimes of their reactors, while others are investigating new builds, such as the Netherlands and Poland as well as Japan and South Korea.

The UAE has also added nuclear to its energy mix, having put three large reactors online in recent years and soon to complete construction of a fourth, which together will provide 25% of the country’s electricity.

According to the IEA, nuclear power capacity needs to double by 2050 if net zero goals are to be achieved. However, it is critically important that projects are delivered on time and within budget, said Birol.

Innovation must also play a big role, with small modular reactors (SMRs) potentially broadening the options for more countries including in the developing world to use nuclear power as a backbone for low carbon energy systems with high shares of variable renewables like solar and wind, he added.

Financing will be a key challenge for such projects, said Kathryn Huff, assistant secretary for Nuclear Energy at the US Department of Energy. “Export financing will be required,” said Huff, adding that “aggressive engagement on all sides if we are going to get things built on time”.

Several other countries, such as Poland and the United States, are looking to nuclear as a replacement for coal, including at or near the site for former coal-fired plants.

“In Poland, when you talk climate transformation, you mean energy transformation,” said Sebastian Barkowski, Poland’s special envoy for International Climate and Energy Cooperation. “Nuclear has to find a place in the very demanding and long-term process of the energy transition and climate transition, which we have to pursue for the years to come.”

He also noted that flexible SMRs could mark a breakthrough for the way nuclear power works and helps decarbonize economies. By siting SMRs close to sources of emissions, such as fertilizer factories or steel mills or for hydrogen production, they can decarbonize those industries directly through the provision of low-carbon heat.

Global coal demand is set to rise next year spurred by the slowing growth of major economies and soaring natural gas prices brought on by the European energy crisis.

A new report released by the International Energy Agency (IEA) shows that coal consumption is set to rise in 2022, taking it back to the record level it reached nearly a decade ago.

Rising gas prices have intensified gas-to-coal switching in many countries. According to the Coal Market Update report, this has resulted in coal becoming more competitive in many markets, with prices reaching three all-time peaks between October 2021 and May 2022.

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Coal demand rises despite market disruption

The rise in coal demand will occur despite market disruption caused by sanctions on Russian coal, according to the report. As other coal producers stand in the gap caused by these sanctions, prices on coal futures markets indicate that tight market conditions are expected to continue well into next year and beyond.

The report highlights however that the disruption and turmoil in coal markets in recent months will negatively impact countries where coal remains a key fuel for electricity generation.

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Key report findings:

• Global coal consumption is forecast to rise by 0.7% in 2022 to 8 billion tonnes, assuming the Chinese economy recovers as expected in the second half of the year. This global total would match the annual record set in 2013, and coal demand is likely to increase further next year to a new all-time high.
• Demand for coal in India has been strong since the start of 2022 and is expected to rise by 7% in response to economic growth and increased demand.
• In China, an expected increase in the second half of the year is likely to bring coal consumption for the full year back to the same levels as last year.
• Coal consumption in the European Union is expected to rise by 7% in 2022 on top of last year’s 14% jump, driven by the increased use of coal as a replacement for gas in the electricity sector.

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Several EU countries are extending the life of coal plants scheduled for closure and reopening closed plants in an effort to reduce gas consumption.

These efforts are ramping up after the European Commission passed the ‘Save Gas for a Safe Winter’ package, requiring all member states to reduce gas consumption by 15% by March 2023.

Russia has increased coal exports to Europe from 21 million tonnes in 2000 to 68 million tonnes in 2021, gaining more than 50% share of the market compared to 11% in 2000. However, that supply must be replaced from mid-August when the EU ban on Russian coal imports comes into force. Europe will then look to countries including Australia, South Africa and Colombia to fill the supply gap.

Global methane emissions from the energy sector are approximately 70% higher than what national governments have officially reported, according to new analysis by the International Energy Agency.

The analysis comes from the organization’s newly released 2022 Global Methane Tracker. For the first time, this year’s edition includes country-by-country emissions from coal mines and bioenergy, in addition to those from oil and gas operations. In total, energy accounts for 40% of methane emissions from human activity, IEA reported.

China is the largest source of global energy-related methane emissions, with 28 million metric tons. Russia (18 mmt) and the United States (17 mmt) are second and third, respectively.

Overall, methane emissions from the energy sector grew by just under 5% in 2021. This did not bring them back to their 2019 levels and slightly lagged the rise in overall energy use, indicating that some efforts to limit emissions may already be paying off, researchers found.

“Emissions from oil, gas and coal are on the rise again, underscoring need for greater transparency, stronger policies and immediate action,” IEA’s report said.

IEA said as more data becomes available, it is becoming more apparent that almost all national inventories have been underreporting emissions. Emissions reported for individual producing basins, fields and facilities are also typically lower than those observed through systematic monitoring.

IEA said satellites, for example, are helpful in identifying emissions sources, especially for large leaks in places such as the Middle East and North Africa, Central Asia and across the United States, including the main U.S. shale plays. Large leaks from oil and gas operations were detected by satellite in 15 countries in 2021, with significant emissions from the Permian basin in Texas and very large leaks in parts of Central Asia, the organization said. Turkmenistan alone was responsible for one-third of the very large emissions events seen by satellites.

Existing satellites also do not measure equatorial regions, northern areas (including the main Russian oil and gas producing areas) or for offshore operations, the organization added.

According to the Intergovernmental Panel on Climate Change, methane has contributed around 30% of observed global warming to date. Methane dissipates faster than carbon dioxide but is a much more powerful greenhouse gas during its short lifespan, meaning that cutting methane emissions would have a rapid effect on limiting global warming.