· 6 min read
As the IEA just celebrated its 50th anniversary, it’s appropriate to reflect on both past and future.1 In this contribution I will highlight some remarkable achievements of the IEA since its creation in 1974, as well as offer a few thoughts on avenues for the future.
The creation of the IEA
The 1973 oil crisis was an epic event with far-reaching consequences. Most notably, it changed the course of national and international energy policies. Oil importing countries suddenly realised how vulnerable they were and in response started to promote energy efficiency and diversification of energy sources. A good example is France that started a massive expansion program for nuclear power under the motto “on n’a pas de pétrole mais on a des idées” (we have no oil, but we have ideas). At the international level, US Secretary of State Henry Kissinger initiated a coordinated response by oil importing countries, culminating in the creation of the International Energy Agency (IEA) in Paris in 1974. The most important achievement of the IEA in the early days was the agreement that all IEA member countries would establish strategic oil stocks to overcome future emergency situations. In parallel, the IEA encouraged member countries to boost energy saving, diversify away from oil to coal, gas and nuclear (in particular in power generation), expand domestic oil production and develop promising energy technologies.
Fast forwarding to this century, the IEA warned gas importing countries repeatedly against the risks of an over-dependence on Russian gas, starting in 2006 during the Russia/Ukraine gas crisis. After the Russian invasion of Ukraine in 2022 shocked the world, it rapidly proposed a plan to the EU to overcome the resulting gas emergency crisis. This plan was built on the familiar pillars of energy saving, diversification away from Russia and from gas to renewable energy and stronger international coordination in filling gas stocks. According to EC President Ursula von der Leyen, the IEA plan proved very helpful to the EU in navigating the crisis.2 Diversification (of energy sources, suppliers and supply routes) remains the magic word and strategic objective ever since the 1973 oil crisis.3
The reinvention of the IEA
In many ways, the Paris Agreement in 2015 was a watershed moment for the global energy transition. It also had a profound impact on the work of the IEA. The Agency massively scaled up its activities on clean energy in depth, breadth and geographical scope so as to include the major emerging and developing countries. Examples include the work on renewables, clean hydrogen, and energy transition in Brazil, India and Indonesia. It has done this very effectively, culminating in the path-breaking publication in 2021 of the Net-Zero Emissions Road Map to 2050.4 In the lead-up to the last COP28 meeting in Dubai, the IEA was one of the driving forces of the global agreement ultimately reached at COP28 on 2030 global targets of tripling renewable energy capacity, doubling energy efficiency progress, reducing methane emissions and accelerating the transition away from fossil fuels. The IEA is now considered as one of the key players on the global energy and climate policy stage. Looking back on how the agency has evolved since the Paris Agreement, one could say with President Emmanuel Macron of France that the IEA has reinvented itself and “has now become a global hub for debate & collective action to meet the challenge of the energy transition”.5 US Climate Envoy John Kerry even stated that the IEA is now “the principal referee or arbiter” for countries on what is needed in terms of policies.6
Unsurprisingly, the accelerated shift of the IEA to become this key player in the global energy transition has raised a few eyebrows in some corners, especially in the oil and gas industry. This relates mainly to the interpretation of the Net-Zero Emissions Roadmap and its implications for oil and gas investment in new fields going forward. This is not the place to elaborate on this debate, but surely this discussion will continue in the near future.7 Similarly, important questions have been raised about the (social) cost of the energy transition and how to ensure an orderly, fair and just transition that doesn’t leave countries, people or communities behind. The IEA has come up with valuable new initiatives to tackle these difficult questions and offer guidance, but of course this is all work in progress.
Avenues for the future role of the IEA
Last week’s IEA Ministerial Meeting not only celebrated the 50th Anniversary but also set out the agenda for the near future.8 The communique reinforces the IEA’s continued role as a watchdog for global oil and gas security. Very interestingly, however, the energy security concept was explicitly broadened with the announcement of a voluntary IEA Critical Minerals Security Programme, aiming to include the critical minerals that are so essential to enable the global target of tripling renewable energy capacity. In addition, the IEA will continue its role in promoting the improvement of energy access in developing countries for those who are still lacking access to electricity or clean cooking.
On the global energy transition, IEA member countries want IEA to step up its efforts across the board and keep tracking the progress (and lack thereof) of the deployment of clean energy technologies. Its activities in this area will surely be helped by the welcome announcement of India applying for full IEA membership and the creation of the first regional IEA centre in Singapore. South-East Asia is after all one of the most dynamic centres of energy demand growth and hence potential sources of higher emissions.
I finish with expressing two wishes. The first wish is that the IEA will find effective ways to assist the energy transition of resource-rich emerging and developing countries. These countries face existential threats since the business model of their economies is often based on exporting fossil fuels.9 They urgently need to shift to low-carbon exports including e.g. clean hydrogen, critical minerals, green iron. Some of these countries are ‘new kids on the block’, that only just started exporting oil and gas (e.g. Guyana and Surinam). My second wish is that IEA will use its tremendously impressive convening power to help scale up and speed up the financing of the energy transition of emerging and developing countries, e.g. through mobilising much larger financial contributions of Multilateral Development Banks (MDBs) and mechanisms like the Just Energy Transitions Partnerships (JETPs).
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Notes and references
[1] In full transparency, I worked at the IEA as Director for Long-Term Cooperation and Policy Analysis (2003-2007) and I was Chairman of the IEA Governing Board (2017-2018). Currently, I am also an advisor to the IEA on hydrogen.
[2] Speech of EC President Ursula von der Leyen at IEA 50th Anniversary, Paris, 13 February 2024.
[3] Energy guru Daniel Yergin has rightly reminded us that this principle was already coined by Sir Winston Churchill in 1913, see Daniel Yergin, The 1973 Oil Crisis: Three Crises – and the Lessons for Today, Speech at Center on Global Energy Policy, Columbia SIPA, New York, October 16, 2023.
[4] IEA, Net-Zero by 2050: A Roadmap for the Global Energy Sector, Paris, May 2021. This roadmap has since then been updated in 2023, see IEA, Net Zero Roadmap: A Global Pathway to Keep the 1.5 degrees C Goal in Reach, 2023 Update, Paris, September 2023.
[5] Video message of France’s President Emmanuel Macron at IEA 50th Anniversary, Paris, 13 February 2024.
[6] US Climate Envoy John Kerry at IEA 50th Anniversary, Paris, 13 February 2024.
[7] See e.g. the LinkedIn post of Jason Bordoff, Climate Change is Critical to Energy Security – the IEA Has Evolved to Reflect This Reality, 15 and 20 February 2024.
[8] See the communique of the IEA Ministerial Meeting on 13-14 February 2024, on www.iea.org
[9] See my book From Dutch Disease to Energy Transition, June 2023, available on clingendaelenergy.com
