Energy demand is increasing globally, causing greenhouse gas (GHG) emissions from the energy sector also to increase. The trend is set to continue, driven primarily by economic growth and the rising population. In recent years the long-term trend of gradual decarbonisation of energy has reversed due to an increase in coal burning.
Climate change presents increasing challenges for energy production and transmission. A progressive temperature increase, an increasing number and severity of extreme weather events and changing precipitation patterns will affect energy production and delivery. The supply of fossil fuels, and thermal and hydropower generation and transmission, will also be affected. However, adaptation options exist.
Significant cuts in GHG emissions from energy can be achieved through a variety of measures. These include cutting emissions from fossil fuel extraction and conversion, switching to lower-carbon fuels (for example from coal to gas), improving energy efficiency in transmission and distribution, increasing use of renewable and nuclear generation, introduction of carbon capture and storage (CCS), and reducing final energy demand.
Strong global political action on climate change would have major implications for the energy sector. Stabilisation of emissions at levels compatible with the internationally agreed 2°C temperature target will mean a fundamental transformation of the energy industry worldwide in the next few decades, on a pathway to complete decarbonisation.
Incentivising investment in low-carbon technologies will be a key challenge for governments and regulators to achieve carbon reduction targets. Reducing GHG emissions also brings important co-benefits such as improved health and employment, but supply-side mitigation measures also carry risks.
