NEW NOTE: Read comment below by Keith Stewart from Greenpeace who says the subsidies identified in the IEA report are based on consumption subsidies, not production subsidies, which are somewhere around $100 billion on top of consumption subsidies and are estimated at nearly $3 billion in Canada annually just for oil alone.

NOTE: To get some perspective on the breakdown of fossil-fuel subsidies, it would be worth it to visit this site. The IEA says that coal only represents $6 billion of global fossil-fuel subsidies, and about half of the total $312 billion in subsidies are in half a dozen developing countries, not in the U.S., not in Canada. Yes, we need to be eliminating subsidies for fossil fuels, but we need to avoid exaggerating the situation in North America for the sake of making a case for renewables. That said, the case for renewables can and should still be made. Fact is, the fossil-fuel industry is benefitting from decades of subsidies that allowed it to get an infrastructure foothold in our economies. There’s no reason to deny renewables the same boost.

The International Energy Agency put out its annual World Energy Outlook today and urges strong and sustained government support for the deployment of renewable energy. The agency pegs 2009 subsidies for renewables at $57 billion and calls for that to increase to $205 billion by 2035. “The share of modern renewable energy sources, including sustainable hydro, wind, solar, geothermal, modern biomass and marine energy, in global primary energy use triples between 2008 and 2035 and their combined share of total primary energy demand increases from 7 per cent to 14 per cent,” according to the agency. Fossil fuel subsidies stood at $312 billion in 2009 and the agency urged that they be eliminated to accelerate the transition to renewables.

But even this won’t hold global temperature increases to below 2 degrees C, it concedes. It expects that CO2 emissions will grow to about 650 parts per million before stabilizing, resulting in a temperature increase of more than 3.5 degrees C. Not good, as we need to keep emissions to 450 PPM or below to keep temperature increases manageable. That means a far more rapid phase-out of fossil-fuel subsidies and more aggressive support of renewables. Ideally, oil demand would peak just before 2020 and decline by 10 per cent by 2035. Coal and, yes, natural gas demand would also peak before 2020 under this scenario. Unlikely, sure, but it’s what it will take. Meanwhile, we need to see renewables and nuclear climb to a combined share of 38 per cent of primary energy supply by 2035.

“The message here is clear,” said Nobuo Tanaka, executive director of the IEA during a London press conference. “We must act now to ensure that climate commitments are interpreted in the strongest way possible and that much stronger commitments are adopted and taken up after 2020, if not before. Otherwise, the 2 degrees C goal could be out of reach for good.”

You can read an overview of the report here, and get a lengthier executive summary here. Bloomberg News has a report here.

Environmental groups such as Greenpeace generally applauded the IEA for recognizing the rising importance of renewables, but they were still critical of the IEA for, among other things, putting too much hope in carbon capture and nuclear technologies. “The IEA´s assumption, that after 2020 98 per cent of new coal power plants will be built with CCS capability, is light years away from reality. Increasing amounts of CCS projects have been cancelled due to run-away costs and the lack of public support,” according to Sven Teske, renewable energy director of Greenpeace International.

I would agree that CCS is a dog, and subsidizing such technologies is akin to subsidizing fossil fuels. I’m in less agreement with Greenpeace on the role that nuclear can and should play. I don’t like nuclear, but at the same time I recognize that in high-growth developing countries such as China it may be crucial to keeping global emissions under control. In other words, if building a nuke plant means eliminating the need to build a few coal plants, then that’s a good thing. It’s a bitter pill we may have to swallow, at least until we get mature and competitive energy storage technologies that can give renewables a baseload profile. That said, I don’t believe we can achieve the kind of nuclear buildout envisioned by the IEA, which is akin to building a new reactor every month until 2035, according to Greenpeace. Fat chance of that happening. Renewables, on the other hand, can be deployed much more rapidly and strategically than nuclear.

The International Energy Agency, according to two recently released technology roadmaps, thinks solar electricity coming from photovoltaic or concentrating solar systems could by 2050 come to represent between 20 and 25 per cent of global electricity production. Now, to be clear, we’re talking about production — not capacity — so this is a significant figure given the sun doesn’t shine all the time. PV would be mostly for distributed on-grid generation, while concentrating solar power (CSP) would be mostly used at utility scale in a way where electricity could be dispatched, much like coal power plants are used today. CSP would have a thermal storage component, and it would be done on a large scale in regions with the best solar regimes. The electricity would then rely on enhanced transmission infrastructure to get the power to more remote locations. “Together, PV and CSP could generate 9,000 terawatt-hours of power in 2050.”

It also predicts that residential and commercial building PV will reach grid parity in some markets by 2020, and will be competitive at utility scale in some regions by 2030, when it would provide 5 per cent of global electricity. “As PV matures into a mainstream technology, grid integration and management and energy storage become key issues… By 2050, PV could provide more than 11 per cent of global electricity.”

The rest will come from CSP, which is expected to become competitive as a peaking and mid-peak power source by 2020 in sunny regions. “Thanks to thermal storage, CSP can produce electricity around the clock and will become competitive with base load power by 2025 to 2030.” It also predicts North America — i.e. the southern parts of the United States — will be the largest producer of CSP electricity, followed by North Africa and India. CSP, like PV, could represent 11 per cent or more of electricity production by 2050.

Personally, I’m equally optimistic. As Joe Romm over at Climate Progress regularly makes clear, CSP is well on its way to replace coal-fired power in many parts of the world. On the PV side, I’m encouraged by the state of innovation (see above posting).

Not that I find it at all that surprising, but the International Energy Agency has pinpointed Canada as a laggard on energy efficiency in a report released a few days ago. The report targets Canada’s pulp and paper, iron and steel and cement industries, specifically. IEA analyst Ceclilia Tam told Canwest News that Canada’s performance isn’t just poor in comparison to the 29 other members of the Organization for Economic Co-operation and Development, but it ranks low on a worldwide basis. “The reason for this is that in many cases Canada is using older, less efficient technology, and significant improvement can be achieved by switching to current, best-available technology,” said Tam.

Compared to building new power plants the investment in industrial efficiency should be seen as low-hanging fruit to Canadian politicians, but sadly it’s not. This study gives us yet another reason to more aggressively embrace approaches such as co-generation as a way to lower Canada’s industrial emissions and become more globally competitive at the same time.

Is anybody listening? Sadly, when multinational industrial giants look to cut costs by shutting down facilities, where do they go first? They zero in on those facilities that are least competitive, and that means least efficient.

The American Council for an Energy-Efficient Economy issued a report yesterday touting the role that semiconductor-based technologies have played in making the U.S. economy more efficient. At the same time, the International Energy Agency issued its own report calling on governments around the world to be more aggressive with efficiency standards for ICT and consumer electronics, which are expected to demand twice as much power by 2022 and three times as much by 2030 — creating a need for another 280 gigawatts of power generation (i.e. like adding another Japan to the world, or more than 230 nuclear reactors). “This will jeopardize efforts to increase energy security and reduce the emission of greenhouse gases,” according to an IEA news brief.

I’ve got a story on it here in the Toronto Star.

It appears the American efficiency council was aware that the IEA report was coming and intent on countering its conclusions, or at least defending the role that semiconductor-based technologies have played in improving efficiency throughout the larger economy. The council claims that such technologies have *avoided* the need for 184 power plants since 1976 and, using 2006 as a reference point, saved consumers and businesses $69-billion on their electricity bills. More than that, the technologies have prevented 479 million megatons of CO2-equivalent emissions — that is, they’re responsible for a “20 per cent cut in electric utility industry emissions linked to climate change.” Going forward, it estimates a further $1.3 trillion (yes, trillion) in savings between now and 2030. “Despite the immediate growth in electricity demands to power the growing number of devices and technologies, semiconductors have enabled a surprisingly larger energy productivity benefit in that same period,” argues John Laitner, the council’s director of economic and social analysis.

So who’s right? Well, both.

Certainly computers and networking gear have contributed substantially to economic efficiency, but can the same argument be said for iPods and cellphones with digital cameras and other unnecessary features built into them? Do we really need four televisions, three computers, two DVD players and digital picture frames that use remote controls in every home? Fact is many of the consumer electronics, if not most, contribute nothing to productivity but exist merely to entertain and make life more convenient, and in most cases slightly so. This is what the IEA is talking about, and while it implicitly recognizes such a market is important and not going away, it makes a good argument: If we’re going to become more gadget-obsessed we have an obligation to make these devices as energy-efficient as possible.

Thoughts?