G7 countries agree phaseout for unabated coal power – and other top energy stories

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Roberto Bocca, Head, Centre for Energy and Materials; Member of the Executive Committee, World Economic Forum

• This round-up brings you the latest developments in the global energy sector.
• Top energy news: G7 nations agree on coal phaseout; renewable electricity passes 30% milestone; IEA predicts sharp fall in battery costs.
• For more on the World Economic Forum’s work in the energy space, visit the Centre for Energy and Materials.

1. G7 nations agree 2035 coal exit

Energy ministers from the G7 nations have signed a deal to end the use of unabated coal power plants between 2030 and 2035, with leeway offered to countries heavily reliant on coal.

Following talks in Turin, the statement from Canada, France, Germany, Italy, Japan, the UK and US pledged to “phase out existing unabated coal power generation in our energy systems during the first half of 2030s”. However, countries could also opt for a date consistent with limiting global temperature increases to 1.5°C above pre-industrial levels.

Gilberto Pichetto Fratin, Italy’s Minister of the Environment and Energy Security, who chaired the meeting, is quoted in the Guardian as saying: “It is the first time that a path and a target has been set on coal. It is a very strong signal from industrialized countries. It is a big signal to the world to reduce coal.”

The pledge follows an agreement at COP28 by nearly 200 countries in December 2023 to “transition away from fossil fuels in energy systems”.

Discover

What’s the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Centre for Energy & Materials is working on initiatives including Clean Power and Electrification, Energy and Industry Transition Intelligence, Industrial Ecosystems Transformation, and Transition Enablers to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Partnership (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

2. Global renewable electricity passes 30% landmark

In 2023, renewable energy sources accounted for more than 30% of global electricity use for the first time, driven by a continued increase in solar and wind power, according to Ember’s annual Global Electricity Review.

Since 2000, renewables have gone from accounting for 19% of global electricity to more than 30%. This has coincided with the contribution of solar and wind increasing from 0.2% to 13.4% in that same timeframe.

Ember said it expected a power sector emissions slowdown in 2024, following a peak in fossil fuel power generation in 2023.

“The decline of power sector emissions is now inevitable,” Ember’s Director of Global Insights, Dave Jones, said. “2023 was likely the pivot point – peak emissions in the power sector – a major turning point in the history of energy. But the pace of emissions falls depends on how fast the renewables revolution continues.”

3. News in brief: More energy stories from around the world

Chevron has taken an 80% operating working interest share in an offshore block in Namibia’s Walvis Basin, the country’s national oil company, NAMCOR, said. The agreement with Chevron Namibia Exploration Limited will see NAMCOR and local company Custos Energy each retain a 10% interest in the project. “Chevron looks forward to working with our partners to continue exploration activities and support Namibia’s energy sector,” a spokesperson said to Reuters.

Indonesia’s sovereign wealth fund, the Indonesia Investment Authority, aims to invest up to $1 billion this year, with green energy as one of its priorities. The fund’s Chief Financial Officer, Eddy Porwanto, told the Financial Times that it was in talks about investment in the electric vehicle ecosystem and geothermal energy, as well as providing financing for the early retirement of coal-fired power plants.

The International Energy Agency (IEA) has predicted a sharp fall in battery costs leading to an accelerated shift to renewable energy. In its Batteries and Secure Energy Transitions report, the IEA said innovations in battery chemistry and manufacturing would lead to global average lithium-ion battery costs dropping by 40% between 2023 and 2030.

Lithium-ion battery volumes have more than doubled since 2021. Image: IEA

The United Arab Emirates is planning to tender for the construction of a second nuclear power plant, three sources have told Reuters. The aim is to build four new reactors with the new plant being operational by 2032.

Turkey has commenced talks with ExxonMobil over a multibillion-dollar deal to buy liquefied natural gas (LNG) from the energy company. Turkish energy minister Alparslan Bayraktar said to the Financial Times that the long-term deal would secure an additional 2.5 million tonnes of LNG each year.

India has said it will accelerate its exploration of the critical minerals essential for green technology. VL Kantha Rao, a secretary in India’s Ministry of Mines, told the Financial Times: “The importance and requirement and need for critical minerals is exponentially increasing because of the technology, growth and climate goals we have set for ourselves. The same way we have been doing it for all these years for bulk minerals like copper and coal, we will be doing it for critical minerals.”

4. More on energy from our blog

There is a need to balance cooperation and competitiveness as cleantech scales up, with global competition leading to market distortions and an unlevel playing field regarding state support. This article explores how to get it right.

Slower-than-expected growth in the electric vehicle sector has affected the price of several critical minerals. These drops give poor signals to investors, but futures and options markets – derivatives – for critical minerals could enhance pricing transparency and stability. Read more here.

Public- and private-sector collaboration is crucial for a successful energy transition. Two industry experts explain here what private-sector actions and public-sector interventions should be prioritized to strengthen collaboration around the energy transition.