International Energy Agency

The International Energy Agency (IEA), which has its headquarters in Paris, was set up as an autonomous agency in 1974 by member countries of the OECD in response to the mid-1970s oil crisis. The IEA forms an energy forum for the industrialized nations and all of its members with the objective of improving the world’s energy supply and demand structure. It also aims to maintain and improve a system for coping with oil supply disruptions, operate a permanent information system on the international oil market and other sources of energy and to approach energy developments in a global context through international cooperation. A review of the energy economies of member countries during the first ten years of the IEA was published in 1985.

Although the Organisation for Economic Cooperation and Development (OECD) had structures such as the Council, the Executive Committee, the Oil Committee, and the Energy Committee that could potentially deal with energy questions, it could not respond effectively to the crisis. The OECD had adopted the Oil Apportionment Decision, laying out procedures to be carried out in the event of an oil supply emergency in Europe, but these procedures were not implemented during the crisis. In addition, the OECD had adopted recommendations on oil stockpiling in Europe, but due to their limited scope, these measures could only have a limited role in an oil supply emergency.

The IEA provides an energy information network within its member countries and publishes annual and quarterly statistical reports on oil and gas, coal and overall energy supply, consumption, prices and taxes. IEA statistics and OECD main economic indicators are available online via the energy databases of Chase Econometrics/Interactive Data, CISI Network, Data Resources Inc. and I.P. Sharp. It reports annually on the research and development programs of member countries.

Major appraisals of key energy issues are undertaken on an ad hoc basis as required by member governments. A forecast study of the electricity industry of the year 2000 and an analysis of policy questions affecting the development of energy technology were both published in 1985. A series of technology reviews on topical subjects are also published: for example, District Heating, Combined Heat and Power Systems; Heat Pump Systems; Coal Liquefaction; and Energy for Buildings-Microprocessor Technology.

Under the aegis of the IEA, specialist energy organizations have been set up, such as IEA (Coal) in London (see below), and IEA Biomass Conversion Technical Information Service in Dublin and the Coal Industry Advisory Board in Paris.

The IEA and OECD publish their own material with selected outlets in member countries; in the UK they are available from HMSO. Publications are also available on microfiche and statistical data on magnetic tape.

 

International Energy Agency’s Greenhouse Gas R&D Programme

The IEAGHG R&D Programme is an international collaborative research program established in 1991 as an Implementing Agreement under the International Energy Agency (IEA). The program’s main activities are as follows:

• To evaluate technologies aimed at reducing greenhouse gas emissions.
• To help facilitate the implementation of potential mitigation options.
• To disseminate the data and results from evaluation studies.
• To help facilitate international collaborative research, development, and demonstration activities.

Currently IEAGHG members include 17 member countries, the European Commission and the Organization of Petroleum Exporting Countries (OPEC), as well as 21 multinational sponsors.

 

Coal

Forecasts for the Coal Market

The IEA is estimating that global coal demand will remain largely flat, with consumption levels by 2023 being similar to the 5-year average for the period between 2013 and 2018. Coal share in the global energy mix is expected to decrease from 27% in 2018 to 25% by 2023 due to slower demand. In the power generation sector, the contribution of coal is expected to drop to 36% from a historical average contribution of 40% in spite of the overall increase in coal-fired coal production for the period up to 2020 (IEA, Coal Information, 2018).

Climate change policies in OECD countries have defined the agenda for switching to cleaner energy sources. In China, issues of air quality have prompted a slight change in policy and more investment in renewable energy. The growth in coal consumption is becoming moderate and even expected to become flat. While in India, coal consumption is still strong but estimated to moderate from a high level of 6% growth per year in the last decade to an average of 4% growth up to 2023. (IEA, Coal Information, 2018). According to the IEA, coal consumption in the EU will drop 2.5% per year from 325 tonnes of coal equivalent in 2017 to 280 million tonnes equivalent in 2023.

Coal is estimated to continue to be an essential source of energy in China even when considering the structural changes taking place in the Chinese economy, including the move from heavy energy-intensive industries to a more service-oriented economy and efficiencies reached within the manufacturing industry and the power sector resulting from shutting down of old facilities and the move towards investment in less carbon-intensive industries. In China, issues of air quality have prompted a slight change in policies and more investment in renewable energy.

According to some commentators, the US will fulfil the role of swing producer in international markets, likely to take advantage of supply disruption from Australia and favourable high coal prices, which would make freight economically feasible for US coal exports to Asia.

 

Renewable Energy

IEA’s reports indicate that in 2010, electricity generation from renewable energy accounted for ∼21% of global electricity generation, and the share rose to 24% in 2016. As IEA’s 2019 report expects, in the period from 2018 to 2050, electricity generated from renewable energy will rise by 3.6% per year on average, faster than electricity generated from any other energy resources. Electricity generation from renewable energy is expected to be ∼8.2 trillion kWh in 2020, and increase to ∼21.7 trillion kWh in 2050. The ratio of electricity generated from renewable energy to global electricity generation will further rise to ∼31% in 2020, and soar up to ∼49% in 2050. Until 2020, electricity generated from hydro energy still dominates renewable energy-driven electricity generation, and wind energy and solar energy will share ∼22% and ∼16% of global renewable energy used for electricity generation, respectively. Nevertheless, in 2050, renewable energy-driven electricity generation is expected to be dominated by solar energy, wind energy and hydro energy, among which hydro energy is expected to share less than solar and wind energy in global renewable energy used for electricity generation. Solar energy is expected to be the largest renewable energy source used for electricity generation, that is, ∼38%. The share of wind energy could be slightly lower than that of solar energy, ∼31%. Almost 70% of renewable energy-driven electricity generation is expected to come from solar energy and wind energy. Considering the features of intermittency and fluctuation, the wide application of solar energy and wind energy needs scale-flexible and operation-flexible energy storage systems to balance renewable energy output and end-use electricity demand. For efficient electricity generation or co-generations, distributed generation systems are also necessary. Therefore, distributed hybrid energy systems are one of the essential technologies for large-scale utilization of renewable energy sources.

 

Current Oil Movements and Tanker Demand Trends

International Energy Agency statistics show that total primary energy supply through crude oil increased from 2880 million tons of energy in 1973 to 3700 million tons of energy in 2000. A recent study by Glen and Martin estimated that 59% of the world oil produced in 2000 was traded by sea, a significant increase from the prior levels of 48% in 1990 and 56% in 1995. However, estimating demand for tanker transportation based purely on the volumes traded would be inaccurate unless the distances involved were also included. As an example, the disruption in oil movements caused by the Iraqi invasion of Kuwait induced nations such as the United States to partially substitute their dependence on Middle East oil with oil from closer, politically safer locations such as the North Sea, West Africa, Venezuela, Mexico, and Colombia. In such cases, even if the volumes imported were to stay the same, the demand in ton-miles would drop. A study by Kumar reported that a shift of 10 million barrels per day in sourcing the US crude oil imports from the Middle East to the North Sea would reduce tanker demand in ton-miles, making 32 very large crude carriers (VLCCs) redundant. Likewise, a shift in the sourcing of crude oil in Western Europe from the Middle East to closer sources, such as Russian and North Sea oil, would have a similar detrimental effect on tanker demand. In situations like this, unless tanker demand in other optimum long-distance routes pick up, the very large tankers will migrate into suboptimal routes that are usually served more efficiently by smaller vessels, and this will lower the freight rate for all players in the market.

 

Bioenergy

IEA Bioenergy was set up in 1978 by the International Energy Agency (IEA) with the aim of improving cooperation and information exchange between countries that have national programmes in bioenergy research, development and deployment.

The International Energy Agency acts as an energy policy advisor to 29 member countries plus the European Commission, in their effort to ensure reliable, affordable, and clean energy for their citizens. The IEA’s initial role was to co-ordinate measures in times of oil supply emergencies. As energy markets have changed, so has the IEA. Current work focuses on climate change policies, market reform, energy technology collaboration and outreach to the rest of the world, especially major producers and consumers of energy like China, India, Russia and the OPEC countries.

 

Criticism

The IEA has been criticised for systematically underestimating the role of renewable energy sources in future energy systems such as photovoltaics and their cost reductions.

Ahead of the launch of the 2009 World Energy Outlook, the British daily newspaper, The Guardian, referring to an unidentified senior IEA official, alleged that the agency was deliberately downplaying the risk of peak oil under pressures from the USA. According to a second unidentified former senior IEA official it was “imperative not to anger the Americans” and that the world has already entered the “peak oil zone”.

In the past, the IEA has been criticized by environmental groups for underplaying the role of renewable energy technologies in favour of nuclear and fossil fuels. In 2009, Guy Pearse stated that the IEA has consistently underestimated the potential for renewable energy alternatives.

For example, in 1998, the IEA predicted global wind electricity generation would total 47.4 GW by 2020, but EWG’s report states that this level was reached by the end of 2004. The report also said that the IEA has not learned the lesson of previous underestimations, and last year net additions of wind power globally were four times greater than the average IEA estimate from its 1995–2004 predictions. This pattern seems to have continued through 2016.

The IEA’s current forecasts for solar power do not accord with the exponential growth in the sector. The misleading projections have perpetuated the impression that the growth of solar power requires huge subsidies, and has the potential to discourage investment in solar energy market and consequently, holds back even faster growth.

Amid discontent from across the renewables sector at the IEA’s performance as a global energy watchdog, the International Renewable Energy Agency was formed on January 26, 2009. The aim is to have the agency fully operational by 2010 with an initial annual budget of €25M.

 

Areas of Work

Promoting Energy Efficiency

IEA helps governments improve standards, advising them on developing, implementing, and measuring the impact of efficiency policies.

Ensuring Energy Security

IEA’s activities on energy security ensures that markets remain well-supplied, providing information to governments, and helping improve system resilience.

Programmes and Partnerships

The IEA works with governments, organisations and agencies around the world to deliver programmes focused on countries, regions or topics.

International Collaborations

IEA works with a broad range of international organisations and forums to ensure secure, affordable and sustainable energy systems

Promoting Digital Demand-driven Electricity Networks

The IEA, getting its hands on digital, demand-driven solutions offers significant benefits to cost reduction, emissions abatement and enhanced energy efficiency.

Data and Statistics

Data collection has been at the heart of the IEA’s work since the commencement, with official energy statistics from more than 100 countries collected on a monthly or annual basis.

Training

For more than four decades, the IEA carried out training activities around the world on energy statistics, modelling, technology, energy efficiency and renewable policies.

Technology Collaboration

With about 40 research collaborations and about 6,000 experts, the IEA technology programme provides the basis for international public and private research partnerships.

Global Engagement

Since 2015, the IEA has entered eight major emerging economies for a new era of international energy cooperation.

Industry Engagement

Meeting with various industry groups on a regular basis, and scrutinizing insights on how policies shape real-world investments and actions.

 

Modernization Strategy of IEA

While energy security remains a core mission, the IEA has evolved over the years, adapting to the transformation of the global energy system. Today, the IEA is at the heart of global dialogue on energy, providing authoritative statistics and analysis and examining the full spectrum of energy issues, advocating policies that will enhance the reliability, affordability and sustainability of energy in its 31 member countries and beyond.

In 2015, the IEA’s Ministerial Meeting approved a new modernization strategy presented by the Agency’s newly appointed Executive Director, Dr Fatih Birol, to strengthen the Agency’s role as an authoritative voice on global energy policy. Ministers endorsed the focus on creating a more inclusive and truly global agency through closer engagement with emerging energy economies.

The modernization of the IEA was structured under three pillars: strengthening and broadening the IEA’s commitment to energy security beyond oil, to natural gas and electricity; deepening the IEA’s engagement with major emerging economies; and providing a greater focus on clean energy technology, including energy efficiency.

 

Mission of IEA

The IEA was created in 1974 to help coordinate a collective response to major disruptions in the supply of oil. While oil security remains a key aspect of its work, the IEA has evolved and expanded significantly since its foundation.

Taking an all-fuels, all-technology approach, the IEA recommends policies that enhance the reliability, affordability and sustainability of energy. It examines the full spectrum issues including renewables, oil, gas and coal supply and demand, energy efficiency, clean energy technologies, electricity systems and markets, access to energy, demand-side management, and much more.

Since 2015, the IEA has opened its doors to major emerging countries to expand its global impact, and deepen cooperation in energy security, data and statistics, energy policy analysis, energy efficiency, and the growing use of clean energy technologies.