International Energy Agency

The International Energy Agency is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis. The IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors. 

  • IEA has a major role to play in providing information related to the international oil market and taking action against any physical disruptions in the supply of oil.  
  • IEA also acts as a policy adviser for its 30 member countries as well as for the non-member countries, especially China, India, and Russia. 
  • The IEA has a broad role in promoting alternate energy sources (including renewable energy), rational energy policies, and multinational energy technology co-operation 
  • India has become an associate member of IEA.

HISTORY 

  • Created in 1974 to ensure the security of oil supplies, the International Energy Agency has evolved over the years. While energy security remains a core mission, the IEA today is at the centre of the global energy debate, focusing on a wide variety of issues, ranging from electricity security to investments, climate change and air pollution, energy access and efficiency, and much more. 
  • The IEA was established as the main international forum for energy co-operation on a  variety of issues such as security of supply, long-term policy, information transparency,  energy efficiency, sustainability, research and development, technology collaboration,  and international energy relations. 
  • The IEA’s founding members were Austria, Belgium, Canada, Denmark, Germany,  Ireland, Italy, Japan, Luxembourg, The Netherlands, Norway (under a special  Agreement), Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United  States. They were followed by Greece (1976), New Zealand (1977), Australia (1979),  Portugal (1981), Finland (1992), France (1992), Hungary (1997), Czech Republic (2001),  Republic of Korea (2002), Slovak Republic (2007), Poland (2008), Estonia (2014), and  Mexico (2018). 
  • The IEA’s collective emergency response system mechanism ensures a stabilizing influence on markets and the global economy. It was activated three times since the  Agency’s creation. The first was in January 1991, during the First Gulf War. The second was in 2005 after the hurricanes Katrina and Rita damaged oil infrastructure in the Gulf of Mexico. The third was in 2011, during the Libyan crisis. 
  • 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 30 members countries and beyond. 
  • 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. 
  • The Agency’s successful “open door” policy allowed the IEA to deepen its collaboration with eight new countries through the Association programme: Brazil, China, India,  Indonesia, Morocco, Thailand, Singapore, and South Africa. The IEA family now represents about 75% of global energy consumption, up from 40% in 2015. 

MISSION 

The IEA is committed to shaping a secure and sustainable energy future for all.

OBJECTIVE 

  • The International Energy Agency was established with an objective to coordinate the response of the participating states to the world energy crisis along with developing a  mechanism for oil-sharing for use during supply difficulties.  
  • IEA mainly focuses on its energy policies which include economic development, energy security and environmental protection.  
  • These policies are also known as the 3 E’S of IEA. 

MEMBERSHIP 

The IEA is made up of 30 member countries. In addition, thanks to its successful open-door policy to emerging countries, the IEA family also includes eight association countries. Two countries are seeking accession to full membership, Chile and Lithuania. 

A candidate country to the IEA must be a member country of the OECD. In addition, it must demonstrate several requirements. These are: 

  • Crude oil and/or product reserves equivalent to 90 days of the previous year’s net  imports, to which the government has immediate access (even if it does not own them  directly) and could be used to address disruptions to global oil supply; 
  • A demand restraint programme to reduce national oil consumption by up to 10%;
  •  Legislation and organisation to operate the Co-ordinated Emergency Response  Measures (CERM) on a national basis;  
  • Legislation and measures to ensure that all oil companies under its jurisdiction report  information upon request; 
  • Measures in place to ensure the capability of contributing its share of an IEA collective action. An IEA collective action would be initiated in response to a significant global oil supply disruption and would involve IEA Member Countries making additional volumes of crude and/or product available to the global market (either through increasing supply or reducing demand), with each country’s share based on national consumption as part of the IEA total oil consumption. 

The IEA Executive Director must make a finding to ascertain whether a potential member country can meet these requirements, during which the IEA Secretariat advises and works with the candidate country to advance the accession process. The IEA Governing Board makes the final decision on a country’s membership. 

STRUCTURE 

The IEA is an autonomous intergovernmental organisation within the OECD framework,  headed by its Executive Director

  • The Governing Board is the main decision-making body of the IEA, composed of energy ministers or their senior representatives from each member country.  
  • Through the IEA Ministerial Meeting that takes place every two years, the IEA  Secretariat develops ideas for existing or new work programmes, which are then discussed with member countries in various IEA committees and ultimately presented to the Governing Board for approval.  
  • In addition to the Governing Board, the IEA has several Standing Groups, Committees and Working Parties made up of member country government officials that meet several times a year. 

GOVERNING BODY 

  • The Governing Board is the main decision-making body of the IEA. It is composed of energy ministers or their senior representatives from each Member country. 
  • The Governing Board holds three to four meetings at the Director-General (or equivalent) level each year to discuss global energy developments along with the  Agency’s work with the Executive Director and other senior Secretariat staff.  
  • The outcomes of Governing Board meetings are binding on all member countries.  
  • The Governing Board also has final responsibility for administrative matters of the IEA,  including approving the biennial Programme of Work and the budget. 
  • A majority vote, a system that allocates voting weights to each member country, is required for all decisions on the management of the IEA Programme of Work, and on procedural questions and recommendations.  
  • However, a majority vote is based on a system of voting weights allocated to each member country. 

BUDGET 

  • The size of the IEA budget and the scope of its work, known as the Programme of Work and Budget, are determined every two years by IEA Member Countries.  
  • With the approval of the IEA Governing Board, countries and other energy stakeholders  may make voluntary contributions to support and strengthen a wide range of activities in the IEA Programme of Work and Budget 
  • The Agency also receives some funding from private sources and contributions in-kind,  especially in the form of staff on loan.  
  • Unlike the World Bank or the International Monetary Fund, the IEA does not dispense grants or make loans. 
  • The IEA operates within the financial framework of the OECD, and the OECD Council appoints a Supreme Audit Institution of a member country, which performs an independent external auditing of the IEA’s accounts and financial management.

STANDING GROUPS AND COMMITTEES 

In addition to the Governing Board, the IEA has several Standing Committees that are made up of member country government officials, which meet several times a year. 

  • The Standing Group on Emergency Questions (SEQ) is responsible for all aspects of oil emergency preparedness and collective response to supply disruptions. 
  • The Standing Group on the Oil Market (SOM) monitors and analyses short- and medium-term developments in the international oil market to help member countries react promptly and effectively market changes. 
  • The Standing Group on Long-Term Co-operation (SLT) encourages co-operation among  IEA member countries to ensure collective energy security, improve the economic efficiency of their energy sector and promote environmental protection in the provision of energy services. The SLT has also established the Working Party on Energy Efficiency. 
  • The Standing Group on Global Energy Dialogue (SGD) is responsible for work with countries and regions outside of the IEA membership, including China and India. Many  SGD projects draw upon both regional and sectoral expertise and are carried out jointly with other IEA divisions. 
  • The Committee on Energy Research and Technology (CERT) coordinates and promotes the development, demonstration and deployment of technologies to meet challenges in the energy sector. The CERT has established four working parties: the Working Party on  Fossil Energy; the Working Party on Renewable Energy Technologies; the Working Party on Energy End-Use Technologies; and the Fusion Power Co-ordinating Committee.  Expert groups are also created under the CERT. 
  • The Committee on Budget and Expenditure (CBE) advises the Governing Board on resource management and administration. In particular, it advises the Governing Board on budget matters. 

AFFILIATED GROUPS 

The IEA’s work is also informed by a variety of partnerships with business and industrial partners from all sectors, who provide valuable input into the agency’s work. 

  • The IEA Technology Collaboration Programme (TCP) is a series of about 40 international partnerships that enable governments, businesses, industries, international organisations and non-governmental organisations to share research on breakthrough technologies, to fill existing research gaps, build pilot plants and carry out deployment or demonstration programmes. 
  • The Energy Business Council (EBC) is an executive-level group comprised of leading international companies involved in both the supply and demand side of the energy 

sector, as well as financial institutions and large technology manufacturers. The EBC is the overarching body through which the IEA interacts with industry. Its work helps inform IEA analysis and remain grounded in real-world solutions. It also establishes a  forum for discussions among ministers and industry leaders on long-term stable policy frameworks needed to stimulate investment in sustainable energy infrastructure. 

  • The International Low-Carbon Energy Technology Platform (Technology Platform) is the  IEA’s chief tool for multilateral engagement on clean technologies among its member and partner countries, the business community and other international organisations.  
  • The Renewable Industry Advisory Board (RIAB), set up in 2011, is made up of private sector entities from OECD member countries and informs the Working Party on  Renewable Energy Technologies and the IEA Secretariat of market-relevant information,  industry advice and data. 
  • The Coal Industry Advisory Board (CIAB), set up in 1979, allows high-level executives from coal-related enterprises to provide information about the current state of their industry. 

Achievements of the International Energy Agency 

  • Though the threat to the new energy crisis reduced with the global recession, oil glut and increased efficiency, the IEA warned against energy conservation “complacency” in the 1980s.  
  • The IEA had been successful in meeting the possible oil crisis in 1990 following the Gulf  War by approving a contingency plan which assured ‘security of supply’ by making available additional 2.5 million barrels of oil per day until the completion of Operation  Desert Storm.  
  • The IEA energy ministers agreed in March 1991 to meet regularly after the Gulf War to discuss environmental concerns and ways to increase energy efficiency with their counterparts in non-IEA countries.  
  • In recent years, the IEA has been increasingly involved in the assessment of nuclear issues, as public and governmental support for use of power-generating nuclear reactors has declined. 

INDIA and IEA 

India became an associate member of IEA in March 2017 but it was in engagement with IEA  long before its association with the organization. India was a party to the Declaration of  Cooperation, signed in 1998 which covered the matters relating to energy security and statistics. India had also signed three joint statements with IEA that covered various areas of mutual interest in the energy arena with major focus to gas and oil security. 

Some of the benefits provided to India for being an associate member of the IEA are:

1. Providing access to India to participate in meetings of working groups, standing groups and committees that constitute the governance structure of IEA. 

2. Allowing India to take lead in the geopolitical platform on climate and energy issues due to IEA’s increasing role in combating climate change. 

3. Helping India to take forward the International Solar Alliance framework to other countries through a greater partnership with IEA. 

4. To help India in achieving its vision of ensuring 24×7 affordable and environment-friendly ‘Power for All’ with increased engagement with IEA. 

5. To enable India in setting up its own robust integrated database on energy. With India as an associate member, IEA now formally covers 70% of the world’s energy consumption.

This blog pertains to UPSC papers on GS 2, International Organisation, Political Science optional paper 2 and Essay Type Question. Also, do check our previous blogs on various topics. Subscribe today so that you don’t miss out on any important topics.


Blog Post written by:
Anurag Trivedi
UPSC Mentor