Headline: International Energy Policy: Shifting Towards Renewables

While the International Renewable Energy Agency (IRENA) is now established as a global voice for renewable energies, the International Energy Agency (IEA) is coming under increased pressure to modernise.

On 11 November 2015, the International Energy Agency (IEA) presented the World Energy Outlook 2015 in Berlin. From the speech of the new IEA Executive Director Fatih Birol, it was clear that the IEA is under pressure to modernise. Birol’s words left no doubts as to the agenda of his term of office: he wants to reform the IEA. The agency is to become a hub for clean energy technologies and energy efficiency. Birol also wants to strengthen cooperation with emerging economies beyond the OECD. All of this points to a sea change within the IEA. In the past, it has often been accused of deliberately underestimating the expansion of renewables in its scenarios for the future development of global energy markets. For example, a recent analysis of the Energy Watch Group and the Lappeenranta University of Technology stresses that the trajectories for the expansion of solar and wind energy outlined in the World Energy Outlooks from 1994 to 2014 were far too modest. These accusations were also fuelled by the fact that the IEA keeps its modelling of energy scenarios under a shroud of secrecy and its findings are approved by member states of which some have vested interests in the conventional energy industry. The IEA’s restricted membership is also proving to be a disadvantage: members of the IEA must be in the OECD, but these countries account for only 40% of global energy demand. And the World Energy Outlook 2015 estimates that this share will fall to just one third by the year 2040. So the influence of IEA member states on developments in global energy markets is set to fall.[1]

IRENA as a strong player in energy policy: a success story for the German Government too

The German Government contributed significantly to the power shift in international energy policy. It was the driving force behind the founding of the International Renewable Energy Agency (IRENA) in 2011. More detailed analyses of this can be found in the publications Global governance on renewable energy and IRENA and Germany’s Foreign Renewable Energy Policy. By now, IRENA is fulfilling its founding mandate very effectively. It is established as a global voice for renewable energies. We see this in the central role it plays within the UN initiative Sustainable Energy for All (SE4All). In that context, IRENA serves as the global hub for cooperation on renewable energies. In contrast to the IEA, IRENA is a global organisation. Its membership is open to all UN member states. IRENA has generated significant interest in industrialised, emerging and developing countries and already counts 144 member states.

In its first years of existence, some IRENA member states – especially the USA, supported by Australia and the UK, all of which are IEA members as well – tried to limit IRENA’s activities to developing countries. By doing so they hoped to perpetuate the IEA’s role as the OECD’s central energy organisation. It was in this context that Kirsten Westphal and I advised the German Government in a 2012 Policy Paper to make use of IRENA’s consulting services for the German Energiewende and thus send a strong message about IRENA’s global reach. Today, we can clearly see that IRENA did not allow itself to be forced into the development cooperation corner. To achieve the Sustainable Energy for All target of doubling the share of renewables in the global energy mix, IRENA is modelling a global roadmap (REmap 2030). In the process, it is analysing 26 industrialised, emerging and developing countries, which together account for three quarters of global energy demand. Germany is one of these countries.

IRENA analysis shows that Germany can still make more of its renewable energy potential

IRENA’s Analysis of Germany’s Renewable Energy Potential up to 2030 shows that even the German Energiewende – often seen as a model for other countries – can benefit from an outside perspective. IRENA highlights the successes of Germany’s efforts to expand renewable energies and stresses that the experiences gained in Germany’s energy transition are relevant for other countries as well. For example, it states that the German Energiewende has inspired other countries to invest in renewables. Other countries can also learn from the Energiewende when it comes to shaping political frameworks and integrating fluctuating renewables into their energy systems.

At the same time, the IRENA analysis shows that a more ambitious expansion of renewables is also possible in Germany. It points in particular to the two energy sectors that have so far received too little attention in the Energiewende: heat and transportation. IRENA recommends that the German Government support the use of renewables in these sectors more systematically and integrate them further with the electricity sector. According to IRENA’s analysis, renewables could represent 37% of final energy consumption and 65% of electricity consumption in Germany by the year 2030. These figures are well in excess of the current German targets for renewables in the same areas: 30% and at least 55% respectively.[2]

Another of IRENA’s findings is also of great interest for the German debate: according to IRENA, Germany can rely more on biomass. In the Energiewende, bioenergy tends to be treated as the ‘bad guy’ of renewable energy sources. Political debates often give the impression that the expansion of renewables is based primarily on wind and solar energy. Yet bioenergy actually represents by far the largest share of all the renewable energy carriers in Germany’s primary energy consumption. While wind and solar energy enjoy great public support, bioenergy is often criticised as unsustainable. Now IRENA is emphasising that biomass can be a sustainable option for an energy transition in the heating and transport sectors. It also advocates the use of biofuels, especially in aviation and freight transport. As I argued in my blog post in July 2015, in the area of transport, the German Energiewende could benefit from Brazil’s experiences of biofuels.

The expansion of renewables is not yet sufficient to ensure climate protection and sustainable development

IEA and IRENA present different figures on the global dynamics of the expansion of renewables. For example, IRENA’s report REThinking Energy 2014 points to a turnaround in new electricity generation capacities in 2013: for the first time, renewable energies were in the majority with a share of 58%.[3] Yet the IEA’s World Energy Outlook 2015 presents more conservative numbers and speaks of an almost 50% share of renewables.[4]

But the central assertions of the World Energy Outlook are very clear: renewable energies are on the rise. However, the IEA analyses also show that the existing energy policy frameworks are not adequate to achieve agreed global targets. Current global energy trends are not compatible with the 2-degree target. And far more efforts will be required if we are to achieve the sustainable development goal to provide everybody with access to sustainable and modern energy. The global expansion of renewables can make a major contribution to this goal, but it has to happen faster.

[1] IEA (2015): World Energy Outlook 2015, p. 57.

[2] IRENA (2015): Renewable Energy Prospects: Germany, p. 57.

[3] IRENA (2014): REThinking Energy 2014, p. 25.

[4] IEA (2015): World Energy Outlook, p. 21.

Illustration: IASS/Sabine Zentek