International Renewable Energy Agency sets up new global Commission on Energy Geo-politics as oil-rich economies face existential threat from rise of battery-powered vehicles (BPVs)

Solar power prices are plummeting in the Middle East - putting geo-political pressure on the oil-dominated economies
Solar power prices are plummeting in the Middle East – putting geo-political pressure on the oil-dominated economies

Triggered by the speed of the rapidly-developing non-oil automative sector, the International Renewable Energy Agency (IRENA) has launched a new global think-tank

The new Global Commission on the Geopolitics of Energy Transformation, has the support of the governments of Germany, Norway and – significantly – the United Arab Emirates, one of the oil-rich but otherwise essentially peasant economies of the Middle East.

Reforming Saudi crown prince Bin Sultan is leading moderate social and political reform in the OPEC-dominating Middle East kingdom – perhaps aware that the value of the prospective part-flotation of Saudi Aramco could crumble to dust in the longer run as the world’s developed economies transition to renewable-energy battery powered vehicles. (BPVs).

The Geopolitics of Energy Commission will examine the immediate and longer-term geopolitical implications of global energy transformation driven by large scale-up of renewable energy in the context of global efforts to tackle climate change and advance sustainable development.

The Commission will be chaired by Mr. Olafur Grimsson, the former President of Iceland.

Adnan Amin, IRENA Director-General, explained: “The global energy landscape is witnessing rapid and disruptive change that will have far reaching effects on geopolitical dynamics.

“Renewable energy resources are abundant, sustainable and have the power to significantly improve energy access, security and independence.

“At the same time, the large-scale deployment of variable sources of renewable energy such as solar PV and wind, is  fostering greater cross-border energy trade and cooperation between nations. Understanding  these changing dynamics in a way that informs policy makers, will be the primary goal of the commission.”

Grimsson said: “The geopolitical implications of energy transformation is becoming one of the most debated issues in the global energy agenda. The Geopolitics of Energy Commission can make an important contribution to these global discussions, on the basis of solid evidence and analysis as well as a diverse range of perspectives.”

While most geopolitical analyses of energy related issues have focused on conventional fuels such as oil and gas, the Commission will review the implications of the ongoing global energy transformation underpinned by the surge in renewables and report on how it would impact the geopolitics of energy based on rigorous and credible evidence.

The Geopolitics of Energy Commission will comprise 12 ‘thought-leaders’ and experts on international energy and global security issues, with particular emphasis given to ensuring diverse geographical and expert background  representation.

The Commission will present its first report at the IRENA assembly in January 2019.

Meanwhile, the cost of generating power from onshore wind has fallen by around a quarter since 2010, with solar photovoltaic (PV) electricity costs falling by 73 per cent in that time, according to new cost analysis from the International Renewable Energy Agency (IRENA).

The report also highlights that solar PV costs are expected to halve by 2020. The best onshore wind and solar PV projects could be delivering electricity for an equivalent of USD 3 cents per kilowatt hour (kWh), or less within the next two years; Other highlights include;

  • By 2019, the best onshore wind and solar PV projects will be delivering electricity for an equivalent of $3-cents/kWh, or less.
  • New bioenergy and geothermal projects commissioned in 2017 had global weighted average costs of around $7-cents/kWh.
  • Record low prices for solar PV in Abu Dhabi, Chile, Dubai, Mexico, Peru and Saudi Arabia have made $3-cents kWh (and below) the new benchmark.
  • By 2020, project and auction data suggest that all currently commercialised renewable power generation technologies will be competing – and even undercutting – fossil fuels by generating in the range $3-10 cents/kWh range.

Global weighted average costs over the last 12 months for onshore wind and solar PV now stand at USD 6 cents and USD 10 cents per kWh respectively, with recent auction results suggesting future projects will significantly undercut these averages.

The report highlights that onshore wind is now routinely commissioned for USD 4 cents per kWh. The current cost spectrum for fossil fuel power generation ranges from USD 5-17 cents per kWh.

“This new dynamic signals a significant shift in the energy paradigm,” said Adnan Amin, IRENA Director-General. “These cost declines across technologies are unprecendented and representative of the degree to which renewable  energy is disrupting the global energy system.

“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now – overwhelmingly – a smart economic one. Governments around the world are recognising this  potential and forging ahead with low-carbon economic agendas underpinned by renewables-based energy systems.

“We expect the transition to gather further momentum, supporting jobs, growth, improved health, national resilience and climate mitigation around the world.”

15 Jan 2018

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