From First Fuel: 'Urgency and action' with Tim Goodson 18 November 2021

Last week, Energy Efficiency Council CEO Luke Menzel spoke with Tim Goodson from the International Energy Agency (IEA) to discuss the IEA’s Net Zero by 2050 report and the importance of front-loading action on the pathway to net zero.

This transcript excerpt has been edited for clarity. To hear the entire discussion, listen here, or search for First Fuel wherever you listen to your podcasts.

[Luke Menzel] One of the most striking things about the IEA’s Net Zero by 2050 report is the way it articulates, very clearly, what we need to do immediately to get on the pathway to net zero. It is really one of the key messages of the report, that this next nine years or so is when the race to net zero will be won or lost.

[Tim Goodson] Yeah, absolutely. And I think that's something that is often overlooked when we're talking about whether we can get to net zero by 2050. We need to look at that destination, sure, but we also need to consider what cumulative emissions look like through to 2050, and respect the CO2 budgets that will allow us to stay within the 1.5 degrees band of warming.

If we look at the latest data from the IPCC, then basically the world needs to reduce its emissions by a third by 2030. Given the trajectory we're on today, that's an incredibly tough challenge.

But, what our work shows is that it is absolutely possible. We have the mature technologies at a commercial scale today to unlock those emissions reductions to 2030. That's why we're really putting forward this message, that we need a massive scale up of existing clean energy technologies over the next ten years.

[Luke Menzel] The technology we have now, the things that we know how to do now – and that probably includes renewables, it probably includes energy efficiency, it probably includes electrification – we just need to lean into them massively and get as much of it done as quickly as possible to keep ourselves within that 1.5 degree scenario.

And while we're doing that, simultaneously, we need massive investment in innovation and the technologies that we're going to need in the 2030s and the 2040s, so they're ready to go when we need them.

[Tim Goodson] Yeah, absolutely. So near term, in the report, we look at solar PV and wind for instance. By 2030 we need to quadruple the capacity we're installing each year. 2020 was a record year for capacity at around 250 gigawatts of solar PV and wind globally; that needs to get to over 1000 gigawatts a year by the time we get to 2030. To put it in perspective, that 1000 gigawatts is around 20 times Australia's total installed capacity for electricity generation today.

On the energy side of things - electrification, electric vehicles - less than 5% of global passenger car sales are electric models today. That needs to get to 60% by 2030. That's an 18 fold ramp up in the numbers of vehicles being sold.

[Luke Menzel] You talk about renewables and electrification but the other big defining theme is energy efficiency. And that I think you're calling for a 4% year-on-year improvement in end-use efficiency. Is that every year until 2030, or is it by 2030?

[Tim Goodson] So it's the average annual improvement of energy intensity of 4.2%, between 2020 and 2030. So, we look at what we've achieved in the last 10 years, and that's about double the average rate in the last 10 years.

Again, it's a daunting ramp up, we need to be looking across the board. So we're talking about building retrofits and then really coupling those retrofit programmes with sustainable recoveries from COVID.

We're still talking about investing in improving the efficiency of, say, internal combustion engines because for some of those end users, such as trucking, we're still going to be selling some internal combustion engines over the coming decade.

And, we're obviously talking across industry. Wherever there are opportunities to tap further efficiency that needs to happen as soon as possible this decade.

We really need to front load a lot of that energy efficiency action in the 2020s. That's an action we can take immediately. A lot of its cost effective action, so can be reducing bills for consumers. It's also assisting us with energy security because the energy we're not using is the safest energy. Energy efficiency is just critical across all those angles, and here we're talking not just technical improvements, like getting a more efficient appliance, but also more structural shifts.

So, shifting to electricity consuming technologies, that's unlocking big efficiency benefits in many cases as well. If we take the example of a heat pump. Heat pumps can be at least three or four times more efficient than a gas boiler. So by electrifying, we're also really improving the efficiency of the overall economy.

[Luke Menzel] When you've got electricity systems that still have significant amounts of fossil fuel generation in them, efficiency is one of the biggest things you can do in the near term to bring down those cumulative emissions.

And of course, you're also making the task of fuel switching, which we're inevitably going to be facing this decade and beyond, that much easier. This is because your task in terms of fuel switching is confined to what you actually need to do. You're trying to transition inefficient, end-use to new forms of fuel or generation.

[Tim Goodson] Absolutely. And that's certainly the case, when we look at, say, the building sector. If you're trying to electrify heat demand, then you're going to be increasing electricity demand considerably, if you're not also working to improve the building envelope. That means installing a bigger heat pump to service that load. You're probably also going to need to have that heat pump running harder, running at a higher temperature and therefore being less efficient.

So overall, you're going to be paying higher electricity bills, probably a higher investment for that bigger heat pump, and higher electricity demand. So really, any action that we can take to improve energy efficiency in parallel to those efforts to electrify is usually beneficial for the consumer, who's actually living in that building or driving that vehicle, but also for the power system.

Also, as you mentioned, we have this 1000 gigawatts of solar PV and wind that we need to be installing per year in 2030, and any slowdown on efficiency improvements in this pathway means that we need to be installing even more capacity on the renewable side to ensure we can actually decarbonise the power sector.

So really, we’re going to be facing compounding challenges if we don't act on energy efficiency. Obviously, improving the efficiency of the electric vehicles and the heat pumps, but also across the board for your appliances and your electric motors in industry.

[Luke Menzel] So there is a lot to get on with!

[Tim Goodson] Absolutely! And in parallel, we need to be thinking, what are the solutions we need to put in place to ensure that the hard to abate sectors today, such as iron and steel aviation, heavy transport, have a pathway to decarbonisation. But by the time we get to 2030, we need to have gone through our R&D processes, be deploying technologies and have commercial technologies available to start mass scale deployment in the 2030s.

It's definitely a challenge for governments to be focusing on those two at the same time – the near term and the long term – but they definitely can't be antagonistic. They have to be happening in parallel.


This article was originally published in the November edition of Efficiency Insight.