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International Energy Agency (IEA) and Electricity Market Report:

GS Paper 2:

Topics Covered: Important International institutions, agencies and fora, their structure, mandate.

 

Context:

The early 2022 edition of the Agency’s bi-annual Electricity Market Report has been published.

 

Highlights of the report:

  • Nations are largely turning to fossil fuels to meet the increase in electricity demand as Covid-19 lockdown restrictions are lifting.
  • The global electricity demand rose 6% year-on-year in 2021 – the steepest year-on-year increase recorded by the IEA since the financial crash of 2008 onwards.
  • Global energy intensity fell 1.9% year-on-year – a drop only half as steep as the level needed to lay the foundation for net-zero by 2050.
  • While electricity generation from renewables was up 6% year-on-year in 2021, generation from coal was up by 9%, led by markets including China and India, with coal serving more than half of the increase in demand.
  • This, coupled with a 2% increase in gas-fired generation, caused a 7% year-on-year increase in emissions from the power sector.
  • After two years of decline, this means that emissions from the power sector are now at a record high.

 

Concerns:

  1. The IEA is voicing concerns that, despite the growing net-zero movement, nations are still failing to decouple increased electricity demands from increased emissions.
  2. It is forecasting that power sector emissions will likely remain “around the same level” for the next three years.
  3. In contrast, the IEA’s net-zero by 2050 scenario entails a 55% decrease in sectoral emissions by 2030, against a 2019 baseline.
  4. The report also charts increases in wholesale gas and electricity prices, globally, to “unprecedented” levels, as well as “volatile” coal prices.

 

Background:

In March 2017, India became an associate member of IEA.

 

About IEA:

  • Established in 1974 as per the framework of the OECD, IEA is an autonomous intergovernmental organisation.
  • Its mission is guided by four main areas of focus: energy security, economic development, environmental awareness and engagement worldwide.
  • Headquarters (Secretariat): Paris, France.

 

Roles and functions:

  • Established in the wake of the 1973-1974 oil crisis, to help its members respond to major oil supply disruptions, a role it continues to fulfil today.
  • IEA’s mandate has expanded over time to include tracking and analyzing global key energy trends, promoting sound energy policy, and fostering multinational energy technology cooperation.

 

Composition and eligibility:

It has 30 members at present. IEA family also includes eight association countries. A candidate country must be a member country of the OECD. But all OECD members are not IEA members.

To become member a candidate country must demonstrate that it has:

  1. Crude oil and/or product reserves equivalent to 90 days of the previous year’s net imports, to which the government has immediate access (even if it does not own them directly) and could be used to address disruptions to global oil supply.
  2. A demand restraint programme to reduce national oil consumption by up to 10%.
  3. Legislation and organisation to operate the Co-ordinated Emergency Response Measures (CERM) on a national basis.
  4. Legislation and measures to ensure that all oil companies under its jurisdiction report information upon request.
  5. Measures in place to ensure the capability of contributing its share of an IEA collective action.

 

Reports:

  1. Global Energy & CO2 Status Report.
  2. World Energy Outlook.
  3. World Energy Statistics.
  4. World Energy Balances.
  5. Energy Technology Perspectives.

 

Insta Curious:

Did you know that the International Energy Agency (IEA) has invited India, the world’s third-largest energy consumer, to become its full-time member?

  • The proposal if accepted will require New Delhi to raise strategic oil reserves to 90 days requirement. India’s current strategic oil reserves equal 9.5 days of its requirement.

 

InstaLinks:

Prelims Link:

  1. Various reports released by IEA.
  2. Composition of OECD and OPEC? Who can become members?
  3. Top crude oil producers and importers globally?
  4. Who are associate members of IEA?
  5. What kind of IEA member is India?

Mains Link:

Write a note on objectives and functions of the International Energy Agency.

Sources: the Hindu.