S&P Global‘s article by Dania Saadi with a statement-title that World oil demand may have peaked in 2019 amid energy transition as per IRENA does not come down however informative as a surprise anymore. Its use will plummet by more than 75%, and its production to have plunged by 85% by 2050. It is even earlier, 2025, for the Natural gas demand.
World oil demand may have peaked in 2019 amid energy transition: IRENA
Dubai — Global oil demand may have hit the peak in 2019 and natural gas will follow suit around 2025, the director-general of International Renewable Energy Agency said March 16, as the energy transition gathers pace, echoing forecasts made by BP last year.
Under a 2050 scenario that meets the Paris Agreement’s commitment to limit global warming to 1.5 C, fuel use is forecast to decline by more than 75% if energy transition policies are enforced now, IRENA said in its World Energy Transitions Outlook.
Under the 1.5 C scenario, global oil production is projected to plummet by 85% to slightly above 11 million b/d by 2050 from current levels, with natural gas remaining the largest source of fossil fuel at about 52% of current levels, the Abu Dhabi-based organization said.
“In the last eight years, the installed capacity of renewables has been outpacing systemically the installed capacity of fossil fuels-related plants,” Francesco La Camera, director general of IRENA, said in a virtual media briefing. “There is a structural change that is already there. The energy transition is already in place, it is unstoppable.”
IRENA’s prediction of peak oil mirrors BP’s projection last year that the world may never return to the pre-pandemic oil demand level of about 100 million b/d. Demand for oil will be the biggest casualty from lower energy demand in the coming three decades as weaker economic growth and a faster shift to renewable energy accelerates the demise of oil-based transport fuels, BP said in its Energy Outlook 2020 published Sept. 14, 2020.
Natural gas will still be needed in the future for power generation and in some industries, IRENA said. Coal will be phased out by 2050, with gas supplying around 6% of power generation and nuclear energy around 4%.
“Fossil fuels still have roles to play, mainly in power and to an extent in industry, providing 19% of the primary energy supply in 2050,” IRENA said. “Around 70% of the natural gas is consumed in power/heat plants and blue hydrogen production.”
IRENA’s bearish view of fossil fuel demand contrasts with predictions from the International Energy Agency and OPEC.
Under the IEA’s last central forecast scenario published in November, world oil demand will rise to 106.4 million b/d in 2040 from 96.9 million b/d in 2018, with growth flattening out by 2030.
Last year, OPEC said for the first time that peak oil demand may be nigh, estimating that the world’s thirst for oil will stop growing in about 20 years.
With the pandemic prompting a re-examination of the oil market and countries becoming more aggressive on their sustainability targets, OPEC on Oct. 8 estimated that global demand would hit 109.3 million b/d in 2040 before declining to 109.1 million b/d in 2045 and plateauing “over a relatively long period.”
S&P Global Platts Analytics sees global oil demand peaking in 2040 at around 114 million b/d before slipping to 109 million b/d in 2050 under a “most likely” scenario, some 5 million b/d lower than pre-crisis forecasts.
Use of fossil fuels is being whittled away by the rising adoption of renewable energy, energy efficiency and electrification, according to IRENA.
“Over 90% of the [decarbonization] solutions in 2050 involve renewable energy through direct supply, electrification, energy efficiency, green hydrogen and BECCS,” or biomass with carbon capture and storage, IRENA said. “Fossil-based CCS has a limited role to play, and the contribution of nuclear remains at the same levels as today.”
Under the 1.5 C scenario, electricity would become the main energy carrier with 50% of direct share of total energy use, up from the current level of 21%, IRENA said. Nearly 90% of electricity needs will be provided by renewables, up from 7% in 2018, with the remainder coming from gas and nuclear.
Wind and solar photovoltaic will constitute the biggest part of the power generation mix, supplying 63% of total electricity needs by 2050, with installed renewable generation capacity growing to 27,700 GW from 2,500 GW currently.
Electricity demand is forecast to grow over two-fold between 2018 and 2050 with the use of electricity in industry and buildings doubling and in transport jumping from zero to over 12,700 TWh, according to IRENA.
Hydrogen and its derivatives will make up 12% of final energy use by 2050 and 30% of electricity use will be dedicated to green hydrogen production and its derivatives, it said. The world will need almost 5,000 GW of hydrogen electrolyzer capacity by 2050 from just 0.3 GW now to achieve this level of hydrogen.
To achieve the 1.5 C scenario, the world will need to spend $33 trillion on top of the $98 trillion currently earmarked for energy systems investments. Some $24 trillion invested in fossil fuels need to be rerouted to energy transition technologies over the period to 2050, IRENA said.
Efforts to curb carbon emissions are falling short. As climate change impacts become all too clear, geoengineering is again in the spotlight. Some see it as a last-resort option to fight climate change. Detractors highlight the risks and uncertainties. Will governments end up ‘tinkering with Earth’s thermostat’?
In the summer of 2018, a succession of heatwaves struck the EU. Record-breaking temperatures were reported, and wildfires ravaged the continent. Sweden suffered the worst forest fires in modern history. In Greece, blazes swept through Attica and left 102 dead. For many citizens, wildfires threw the reality of climate change into sharp relief.
Under the Paris Agreement, nearly 200 countries pledged to keep global warming well below 2°C. But progress in curbing carbon emissions is not on track. If the current trend is not reversed, extreme weather events like the 2018 heatwave will become more and more frequent.
Geoengineering refers to large-scale interventions in the global climate system, intended to counteract climate change. In 2008, the UN Convention on Biological Diversity called for a moratorium on geoengineering ‘until there is an adequate scientific basis on which to justify such activities’. Only a decade later, scientists and policy-makers are again looking for last-ditch solutions to buy some extra time. Geoengineering is again in the spotlight.
Potential impacts and developments
Geoengineering includes a number of techniques of varying complexity, risk, and cost. In policy-making, the debate revolves almost entirely around ‘solar geoengineering‘. This describes a set of methods aimed at cooling the planet by reflecting a portion of solar energy back into space, or increasing the amount of solar radiation that escapes the Earth.
Cirrus clouds are known to have a warming effect on Earth. Seeding the atmosphere with innocuous Sahara dust would prevent the formation of cirrus clouds, and reduce global temperatures. Stratospheric aerosol injection entails creating an artificial sunshade by injecting reflective particles in the stratosphere. Its working principle is based in nature. The eruption of Mount Pinatubo in 1991 pumped around 15 million tons of sulphur dioxide into the stratosphere; in the two years that followed, global temperatures decreased by about 1°C.
But there is no simple solution. For a start, solar geoengineering does not target the root of the problem; it only mitigates its effects. Solar geoengineering has never been tried before. If done incorrectly, it could cause even more global warming; and there could be other unintended consequences. The real challenge, however, may not be technological but rather one of governance. Climate politics is slow and complex; agreeing on using untested technology on a planetary scale could prove impossible. Who decides to use solar geoengineering? Who benefits from it? Who is affected?
Solar geoengineering is a geopolitical issue. The atmosphere has no borders, and the actions of some countries could affect the climate of others. To make matters worse, the science is not always conclusive. Some climate models suggest that almost every region in the world would benefit from solar geoengineering. Other scientists claim that since heat-trapping gases would still operate, temperatures would be more evenly distributed. This would reduce precipitation. Such a geoengineered world would be cooler, but also drier.
Many stakeholders see a moral hazard in solar geoengineering. All efforts are now focused on reducing emissions. With new tools in their climatic toolbox, governments could become complacent. Scientists insist that geoengineering is a supplement and not a substitute for mitigation. For example, solar geoengineering will not solve ocean acidification, and its impact on the water cycle is uncertain. Eventually, part or all the carbon released into the atmosphere will need to be recaptured, regardless of whether geoengineering is used or not.
To some citizens, meddling with the climate may sound like playing god. But across the world, about 40 % of the population live within 100 kilometres of the coast. Rising sea levels will threaten these coastal communities. Many regions will see more intense and frequent summer droughts, extreme weather events, and heavy rainfall. This could strain the fragile agricultural systems in the global South, sparking an exodus of climate refugees. As the consequences of climate change accumulate, the public’s opinion on solar geoengineering could shift rapidly.
Perceptions could be as important as the science. In 1962, the US started a programme to weaken hurricanes through seeding. In 1963, Hurricane Flora caused thousands of deaths in Cuba. The Cuban government accused the US of waging weather warfare. Similarly, any country suffering from extreme weather could blame geoengineers. In addition, geoengineering would be deployed progressively. Its effects would be initially difficult to decouple from natural fluctuations and climate change. Detractors would be quick to discard it as a failed idea.
There is a bigger problem, however. Once started, solar geoengineering cannot be stopped. Assuming that carbon emissions continued, the artificial sunshade would mask increasing amounts of extra warming. If geoengineering ceased abruptly – due to sabotage, technical, or political reasons – temperatures would shoot up rapidly. This termination shock would be catastrophic for humans and ecosystems.
Solar geoengineering should only be considered as a last-resort solution. There is ample consensus that cutting emissions is the safest, most economical route to tackling climate change. The world needs a climate champion to accelerate these efforts, and the EU could lead the way.
Ultimately, the debate surrounding solar geoengineering could come down to balancing the risks and benefits. Solar geoengineering is not without risks. However, failing to mitigate climate change will also bring major new risks, disrupt ecosystems across the world, and hit the most vulnerable regions particularly hard.
Ironically, one reason that solar geoengineering may become necessary is the slow pace of international climate negotiations. Yet discussions on geoengineering are following the same path. Should solar geoengineering become necessary, governments need to be ready. The EU could help advance preparedness in this area; for example, by throwing its diplomatic weight behind multilateral initiatives moving in this direction.
The EU and its partners could promote an international governance framework for solar geoengineering. However, all parties must be on board. There are real risks that some of the countries worst affected by climate change could act unilaterally. Even if well-intentioned, this could create geopolitical tension. An international regulation system would ensure that no country ‘goes rogue’, and that geoengineering is not done for some at the expense of others.
The EU could also support research on solar geoengineering. Studies and trials may have been hampered by fears of promoting a quick ‘technofix’. But if geoengineering became necessary to avert disaster, its full effects must be known. Current techniques are criticised for posing a risk to biodiversity, precipitation patterns, and the ozone layer. A better understanding of these problems is the first step towards tackling them. Research could also help governance. For example, counter-geoengineering tools could serve as a deterrent against unilateral action.
Despite the high oil revenues reaped from hydrocarbon resources and their spillover effects on all oil and non-oil producing countries, most MENA region economies suffer from structural problems and fragile political systems, preventing them from adopting effective politico-economic transformations.
The capital was available, but investments were typically misdirected to form in all cases ‘rentier’ economies, with Arab countries economies remaining very undiversiﬁed. They primarily rely on oil and low value-added commodity products such as cement, alumina, fertilisers, and phosphates.
Demographic transitions present a significant challenge: the population increased from 100 million in 1960 to about 400 million in 2011. Sixty per cent are under 25 years old.
Urbanisation had increased from 38 per cent in 1970 to 65 per cent in 2010.
Rural development being not a priority; the increasing rural migration into the cities searching for jobs will put even more strain on all existing undeveloped infrastructures.
Current economic development patterns will increasingly strain the ability of Arab governments to provide decent-paying jobs. For instance, youth unemployment in the region is currently double the world average.
The demand for food, water, housing, education, transportation, electricity, and other municipal services will rise with higher learning institutions proliferating; the quality of education below average does not lead to employment.
Power demand in Saudi Arabia, for example, is rising at a fast rate of over 7 per cent per year.
Amman, Cairo, and other Arab cities gradually lose their agriculture space because of the suburbs’ expansion. Gated communities and high-rise ofﬁce buildings are sprawling while ignoring low-income housing.
In the meantime, the real world feels the planet is in danger of an environmental collapse; economists increasingly advise putting the planet on its balance sheets. For over a Century of Burning Fossil Fuels, to propel our cars, power our businesses, and keep the lights on in our homes, we never envisioned that we will paying this price.
In effect, a recent economic report on biodiversity indicates that economic practice will have to change because the world is finite.
For decades many have been aware of this reality. However, it is a giant leap forward for current economic thinking to acknowledge that Climate change is a symptom of a larger issue. The threat to life support systems from the plunder and demise of the natural environment is a reality.
Society, some governments, and industry are recognising that climate change can be controlled by replacing fossil fuels with renewable energy, electric cars and reducing emissions from every means of production.
Talking about replacing fossil fuels would mean a potential reduction of the abovementioned revenues.
However, would the spreading of solar farms all over the Sahara desert constitute compensation for the losses?
Currently, just over half the world’s population lives in cities, but that is expected to rise to 68% by 2050. As a consequence, world energy demand is set to increase by more than 50 percent by 2050, according to predictions by the US Energy Information Administration – resulting in even higher energy consumption.
Hence, rapid urbanisation and a rapidly growing population along with climate change are key challenges that cities and countries must urgently address.
Closer to home, energy efficiency is a rising challenge in the UAE, due to a growing population, rise in economic activity, and increased energy consumption at a pace that will be difficult to provide for over the long term.
In a growing economy, energy consumption will rise despite reductions in the energy intensity of developed economies.
Although more and more cities are boosting their commitment and progress to becoming net zero carbon, they still have a long way to go. With climate change worsening, more action is required on specific fronts. Everything from factories and homes to transport systems and consumer devices need to become more energy efficient.
One such solution lies in implementing Building Energy Management Systems (BEMS), i.e. automation systems that collect energy measurement data from the field and make it available to users through graphics, online monitoring tools, and energy quality analysers, thus enabling the management of energy resources.
The effectiveness of energy policies and regulations
Prior research indicates that buildings consume 80% of the overall energy demand in the UAE (UAE) and 40% across the globe. The UAE’s Federal Electricity & Water Authority (FEWA) estimates that around 60 to 70 percent of energy demand in the UAE currently stems from building HVAC requirements, with split air-conditioning units making up an estimated 60-70 percent of cooling systems in the market.
Therefore, the UAE as a whole, and Dubai in particular, have put in place different energy security and efficiency strategies such as UAE Vision 2021, Dubai Integrated Energy Strategy 2030 (aims to reduce Dubai’s total energy consumption by 30% by 2030), and Dubai Clean Energy Strategy 2050 (gradually increase the employment of clean energy sources to 75 per cent by 2050).
Additionally, Dubai has established the ‘Green Building Regulations and Specifications’ (GBRS) which aims to improve the performance of buildings in Dubai by reducing the consumption of energy, water and materials; improving public health, safety and general welfare; and by enhancing the planning, design, construction and operation of buildings.
Although not mandatory, GBRS acts more as a guideline for developers and contractors and offers recommendations for constructing energy efficient buildings in Dubai. It is intended to support Dubai’s Strategic Plan, create a more sustainable urban environment and extend the ability of the Emirate’s infrastructure to meet the needs of future development.
Maximising hedonic efficiency (extent to which the delivered service meets the demand) will offer a route to providing optimal service with reduced consumption. However, it is challenging to draft policy initiatives to maximise hedonic efficiency. This needs to be explored and considered by the professional and regulatory bodies.
In addition to a more persuasive regulatory framework, marketing and awareness campaigns that encourage building owners, occupants, developers, and other stakeholders to lessen their energy consumption can have a positive impact on energy conservation. DEWA’s ‘Smart Living’ initiative is one such example that allows consumers monitor their electricity (and water) consumption easily and make smarter decisions to reduce consumption.
Additionally, the adoption of innovative technologies such as EMS are needed for a more cohesive approach to achieving energy-efficiency.
BEMS to the rescue
BEMS enables real-time remote monitoring and integrated control of a broad spectrum of connected systems – allowing modes of operation, energy usage, environmental conditions and so on to be observed and allowing hours of operation, set points and more to be adapted in order to improve energy performance and occupancy comfort.
According to Mordor Intelligence, the Middle East and African market for energy management systems is projected to grow at a CAGR of 11.87% to reach USD 3.76 billion by 2021. This growth in demand comes from concerns over declining energy security, ambitious environmental goals, and the reduced cost of sensors, analytics software and data storage.
Currently, adoption levels across the GCC are lower due to a lack of codified regulation. Hence, a directive from the government to deploy energy management systems could play a critical role in helping country meet its sustainability targets.
There are two major aspects of constructing energy efficient buildings: using “green” design and building materials during the construction phase; and continuous monitoring and controlling energy consumption during the operation phase. While there has been enough emphasis on sustainable construction in some GCC states, there is very little attention on the installation of energy management systems. Focusing on energy management systems should be a key factor in the efforts towards creating a sustainable built environment in the region.
It is claimed that the magnitude of savings accomplished by BEMS can range from 10% to 25%. If used properly, BEMS should allow the optimisation of energy consumption without compromising on comfort or performance. But this requires an in-depth knowledge of how buildings are meant to perform, and how different systems within them communicate. In order to operate accurately, BEMS should be properly designed, installed and commissioned as well as have a user interface that is easy to use.
BEMS may have remote outposts that can be probed locally, or may be managed via mobile devices. However, some buildings could be susceptible to cyberattacks, especially when they are related to critical organisations. This can become an issue in the case of functions that run in the ‘cloud’, such as cloud-based analytics, and the ability to access and manage multiple sites remotely. The ability to retrieve live analytics, or receive alarm notifications from hand-held devices has enormous potential benefits, but may also bring additional risks.
BEMS taken into consideration right from the start of a new construction project can help owners and facility managers gain better control over energy use. Given the large push for sustainability, especially within the built environment, BEMS can therefore become crucial in Dubai and the UAE as more and more green projects come to fruition.
The current generation of smart cities aiming to make buildings greener and smarter should invest more in BEMS and other technologies. Moving forward, BEMS will play a vital role in contributing towards the sustainability goals of energy-smart cities, as sensor-equipped, energy consuming devices such as HVAC, lighting, and refrigeration, become more integrated with BEMS.
Even today and despite all that, oil, coal, and gas provide about a lot of our energy needs but we are gradually aware that:
Using fossil fuels has an enormous toll on humanity and the environment—from air and water pollution to global warming and certainly the COVID-19. That’s not taking the negative impacts of petroleum-based products such as plastics and chemicals.
And all agree that it’s time to move toward a clean energy future. In recent years, the divest movement from fossil fuels has grown to a multi-trillion dollar movement involving more than 350 institutions worldwide. And thanks to stricter policies to address the climate crisis, fossil fuels are gradually becoming yesterday’s energy source. Since 2016, renewable power is slowly replacing fossil fuels usage at all levels.
In the meantime, it looks as if the following is ongoing as per local media.
Around 400 million people could see their livelihoods affected as a result of lower revenues from declining fossil fuel sales
Oil-exporting countries stand to lose nearly $13 trillion in revenue by 2040 as global economies continue to decarbonise their power systems, according to a report by Carbon Tracker.
As countries around the world lower their carbon footprint and energy companies set net-zero emissions targets over the coming decades oil exporting economies will face an existential crisis.
Around 40 oil exporters surveyed by the UK-based think tank will require $9tn to bridge the gap in income shortfalls amid structural changes in energy consumption.
Around 400 million people could see their livelihoods affected as a result of lower revenues from declining fossil fuel sales. The most affected will be oil exporters based in Africa. Nigeria, the continent’s biggest producer, will be the hardest hit as a 70 per cent drop in oil revenues will slash government income by a third. Angola, a southern African country will also stand to lose over 40 per cent of government revenue, endangering the standard of living of nearly 33 million people.
“Government oil revenues will shift dramatically as the market shakes out during the energy transition,” said Andrew Grant, the head of climate, energy and industry and a co-author of the report.
The key to tackling the looming crisis for populations living in oil-exporting nations would be to understand the scale of the challenge.
“Cushioning the landing for hundreds of millions will deliver better outcomes for both climate and human development,” he added.
An orderly drawdown of fossil fuel production would prevent a hard landing for populations living in producer economies, while quick monetisation of resources and oversupply is likely to destroy value for crude, the report said.
Several Middle Eastern exporters such as the UAE and Saudi Arabia have already set in motion efforts to diversify their rentier economies. The UAE derives revenues from tourism and manufacturing and is looking to generate three quarters of its electricity from clean sources by 2050.
Abu Dhabi also has a substantial renewable energy industry, which has recently pivoted towards the production of hydrogen. The country’s leading industrial and financial players, including the national oil company, formed an alliance earlier this year to manufacture hydrogen.
Saudi Arabia, the world’s largest exporter of crude, is undertaking plans for a multibillion dollar, carbon-neutral city, as it plans to phase out fossil fuels from its utilities and become an exporter for hydrogen.
Mexico, Iran and Russia are vulnerable and could lose up to a fifth of their revenues.
Angola and Azerbaijan could see a hit to 40 per cent of government income from oil. However, Norway and Malaysia, which have diversified economies, are less exposed to energy transition risks and will face losses of up to 5 to 10 per cent of crude income.Published: February 11, 2021 06:34 PM
Originally posted on FIRE'd @ 47: After conking out for 11 hours last night, we woke up refreshed and ready to go. Breakfast at the hotel Casablanca is a modernized city, and wasn’t exactly what we were looking for on this trip, so we were pretty happy to leave and move onto the next city, Marrakech,…
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