IEA urges for heavy investment to avoid ‘dirty' and 'insecure’ energy future

The International Energy Agency has warned the world governments Tuesday about the disastrous future they probably would face due to the growing energy demands.

In its annual World Economic Outlook (WEO), the IEA depicted, "The world is facing twin energy-related threats: that of not having adequate and secure supplies of energy at affordable prices and that of environmental harm caused by consuming too much of it... the current pattern of energy supply carries the threat of severe and irreversible environmental damage."

The world's energy supply is heading for crisis, and urgent actions are required to avoid future "skyrocketing prices or more frequent blackouts", the report said.

Claude Mandil, the IEA executive director, at the report's launch in London yesterday said, "On current trends, we are on course for a dirty, expensive and unsustainable energy future. In response, urgent government action is required. The key word is urgent."

The Paris-based intergovernmental organization, IEA that acts as an energy policy adviser for its 26 member countries including the UK and US, also appealed the governments to build more nuclear power stations to help curb greenhouse gas emissions and begin a course of action to decrease the growth in demand for energy.

In its report, the IEA predicted that global energy demand will jump by 53 per cent over the next 25 years and that crude oil prices could exceed $100 a barrel by 2030, while emissions of greenhouse gases will soar by 55 percent over today's levels.

In spite of the recent hike in the oil price and the boost in investment, the world’s energy industry was not building enough new oil and gas capacity to make secure supplies certain, it said.
Instead of producing more energy sources, the industry has used nearly all the increased investment to make up the massive jump in costs. “Expressed in cost inflation-adjusted terms, investment in 2005 was only 5 per cent above that in 2000,” the report said.

The International Energy Agency has suggested an investment of $20,000 bn to meet the world's growing demand for energy. According to Mandil, the next 10 years are significantly crucial because investment decisions made over the period could determine the energy landscape for the next 60 years.

Although, the WEO report reveals the catastrophic scenario of the energy future, but at the same time it also indicates “how new government policies can create an alternative energy future which is clean, clever and competitive”, Mandil said.

He emphasized on the immediate introduction of efficiency and technological advances to check the worst effects of spiralling energy use over the next 25 years.

In its Alternative Policy Scenario the agency has included as much as 1,400 measures like greater use of biofuels, nuclear power growth, more fuel efficient vehicles etc. Implementation of these measures could slash global energy demand by 10% in 2030, which is equivalent to China's entire energy consumption today, the IEA said.

These measures would also curb global CO2 emissions by 16%, which is equal to the existing emissions of the US and Canada combined.

As per the IEA estimates, an additional $1 invested in more efficient electrical equipment and appliances evades more than $2 in investment in power generation, transmission and distribution infrastructure.