IEA says governments should restore energy spending

Feb. 27, 2006
The International Energy Agency recommends that governments consider restoring energy research and development budgets to at least the levels of the early 1980s.

The International Energy Agency recommends that governments consider restoring energy research and development budgets to at least the levels of the early 1980s. “We need to use public funds as effectively as possible in achieving” a balanced and sustainable energy mix, said Claude Mandil, IEA executive director. “There is much at stake.”

His comment came Feb. 14 in Paris as he released a report entitled “Renewable Energy: RD&D Priorities.” RD&D refers to research, development, and demonstration. The IEA, which advises 26 industrialized nations, noted the study is the first of a series to address climate change challenges and sustainable energy development.

Government RD&D expenditures toward energy technologies in IEA nations totaled $308 billion during 1974-2003, the report said. In 1974, total IEA government investment for energy RD&D was $5.9 billion, of which $69 million was for renewable energy.

Energy RD&D outlays peaked in 1980 at $15 billion and declined to $10 billion in 1987, IEA said. Funding averaged $10 billion/year during 1987-91 and was $8.6-10.4 billion/year during the 1990s. Total energy RD&D expenditures in 2003 were $9.2 billion, of which renewable energy claimed $841 million, IEA said.

The study showed the US, Japan, and Germany are the biggest total spenders on energy RD&D, although Switzerland, Denmark, and the Netherlands are the leaders on spending per capita.

Policy trends

“The principle constraint in advancing renewable energy over the last few decades has been cost-effectiveness,” the report said, noting renewable options are challenged to generate energy at costs competitive with conventional fossil fuel sources.

Among renewable energy technologies, the global funding shares of biomass, solar photovoltaic (PV), and wind have increased, while those of ocean, geothermal, and concentrating solar power have declined, the report said.

The IEA’s World Energy Outlook (WEO) 2005 forecast that global energy-related carbon dioxide emissions will grow 1.6%/year during 2003-30, leading to an increase of almost 13 billion tonnes from the 2003 level. This assumes maintenance of current government policies. An alternative WEO policy scenario shows how CO2 emissions could be reduced by 16% during the period if governments deploy new policies, the report said.

“The physical and technical potential of each and all technologies is very large. There are, of course, geographical influences on the choice of option and technology,” the report said.

Trends show significant and growing private sector investment, especially in hydropower, wind, and PV, the report said, adding that RD&D and market deployment complement each other and result in faster, more meaningful technology. “Governments have a consistent role to play in this respect, particularly in terms of developing new deployment policies that facilitate market growth for renewables,” IEA said.

In addition, the report noted that access to public lands, siting of projects, permitting and royalties, and other socioeconomic and environmental concerns must be addressed if renewable energy sources are to be fully exploited.

“The geothermal, wind, and hydropower communities have grappled with these issues for decades,” the report said. “Demonstration projects can help overcome these barriers, but they can also add to public unease as the landscapes of some IEA member countries are littered with renewable energy projects that are broken, outdated, or undesirable.” Renewable energy can play an important role in transitioning to a global sustainable energy supply by the middle of this century, the report said.