The International Energy Agency (IEA) has published its annual World Energy Investment 2018. The report looks at how investment decisions made today will determine energy supply and demand capacity tomorrow.
In response, the WCA notes that:
- Despite the headline fall in investment, 2017 saw net additional capacity of 28 GW globally. In context, this is equivalent to half of Indonesia’s capacity.
- There are currently over 700 GW of coal-fired plants in development or under construction.
- Coal continues to play an important role, especially in Asia. Globally, the fuel has always been crucial for development– this is not going to change over the coming decades.
- This year’s report also puts a spotlight on carbon capture, use and storage (CCUS) funding where only around 15% of the USD 28 billion budget earmarked for large projects was spent, due to commercial and regulatory challenges. Greater policy action is needed to unlock further investment in CCUS.
- Policy parity for CCUS alongside all low emission technologies will help accelerate investment. Consistent, supportive policy and investments like the revised US tax credit -45Q, is likely to lead to improvements in deployment and decreases in cost, which will eventually lead to the climate outcome for which we are all working.
- As the international community looks to achieve the Paris Agreement goals, we must recognise that many national climate plans include a role for high efficiency low emission coal (HELE), which is an important first step on the pathway to greater CCUS deployment and therefore near zero emissions.
- However, with limited financing options available from development banks, countries may choose to build plants with lower efficiency and poorer emissions rates due to the upfront capital cost required to build HELE technologies.
- We therefore need to support countries to deploy low emission coal technologies, whether that be through sharing technology or developing more constructive approaches to financing for coal plants.