Paris-based think tank, the International Energy Agency, (IEA) says the rapid deployment and falling costs of clean energy technologies, the growing electrification of energy, the shift to a more services-oriented economy and a cleaner energy mix in China, and the resilience of shale gas and tight oil in the United States are four large-scale shifts that will occur in the global energy system.
These shifts come at a time when traditional distinctions between energy producers and consumers are being blurred and a new group of major developing countries, led by India, moves towards centre stage. These projections are included in its 2017 World Energy Outlook report.
On clean energy, the IEA believes that renewable sources of energy will meet 40 percent of the increase in primary demand and their explosive growth in the power sector will mark the end of the boom years for coal.
Since 2000, coal-fired power generation capacity has grown by nearly 900 gigawatts (GW), but net additions from today to 2040 are only 400 GW and many of these are plants already under construction. In India, the share of coal in the power mix drops from three-quarters in 2016 to less than half in 2040. In the absence of large-scale carbon capture and storage, global coal consumption will decline.
Renewables capture two-thirds of global investment in power plants to 2040 as they become, for many countries, the least-cost source of new generation says the IEA. Rapid deployment of solar photovoltaics (PV), led by China and India, will help solar become the largest source of low-carbon capacity by 2040, by which time the share of all renewables in total power generation reaches 40 percent.
“In the European Union, renewables account for 80 percent of new capacity and wind power becomes the leading source of electricity soon after 2030, due to strong growth both onshore and offshore. Policies continue to support renewable electricity worldwide, increasingly through competitive auctions rather than feed-in tariffs, and the transformation of the power sector is amplified by millions of households, communities and businesses investing directly in distributed solar PV.
On electricity, the IEA forecasts that industrial electric motor systems will account for one-third of the increase in power demand. Rising incomes will mean that many millions of households would add electrical appliances (with an increasing share of “smart” connected devices) and install cooling systems.
Electricity is projected to makes inroads in supplying heat and mobility, alongside growth in its traditional domains, allowing its share of final consumption to rise to nearly a quarter. “A strengthening tide of industry initiatives and policy support pushes our projection for the global electric car fleet up to 280 million by 2040, from 2 million today,” says the report.
Regarding China’s role in the global energy system, the IEA says China’s choices will play a huge role in determining global trends, and could spark a faster clean energy transition. The scale of China’s clean energy deployment, technology exports and outward investment will make it a key determinant of momentum behind the low-carbon transition: one-third of the world’s new wind power and solar PV is installed in China.
The group was quite optimistic in the rise of US shale oil. “In our projections, the 8 mb/d rise in US tight oil output from 2010 to 2025 would match the highest sustained period of oil output growth by a single country in the history of oil markets. A 630 bcm increase in US shale gas production over the 15 years from 2008 would comfortably exceed the previous record for gas
“Expansion on this scale is having wide-ranging impacts within North America, fuelling major investments in petrochemicals and other energy-intensive industries. It is also reordering international trade flows and challenging incumbent suppliers and business models.”
Analysts say this shifts represents a sea change in conception of energy systems decades from now. The IEA believes that oil demand will continue to grow to 2040, albeit at a steadily decreasing pace. Natural gas use rises by 45 percent to 2040 and renewable will shape the world in two decades from now.
ISAAC ANYAOGU
