The International Energy Agency (IEA), the International Energy Forum comprised of 29 industrialized countries under the Organization for Economic Development and Cooperation (OECD) released its 2017 World Energy Outlook on 14 November 2017 in London.
In this first article of a series covering all the 3 parts, we will focus on and summarize the first part, that is the global energy trends.
The WEO 2017 estimates that the global population will rise to more than 9 billion people in 2040. Such an inrease in population would need an additional 30% of energy demand. Compared to the 13 760 million tons of oil equivalent (mtoe) Energy consumption in 2016, the energy demand in 2040 is expected to rise to 17 584 mtoe (which means a yearly average demand rise of 1%). Put another way, in the New Policies Scenario, the world is set to add the equivalent of today’s China plus India to its energy demand by 2040.
In the 2017 Outlook, global GDP is assumed to grow at a compound average rate of 3.4% per year while the world population is assumed to rise from 7.4 billion in 2016 to 9.1 billion in 2040.
The price of energy and the costs of key energy technologies are expected to evolve differently in the various scenarios, depending on levels of deployment and on supply-demand balances. However, costs for key low-carbon technologies – notably solar, wind and batteries – continue to fall between 2016 and 2040, with major implications for investment trends. The outlook for nuclear has meanwhile dimmed somewhat, in response to signs of waning support in some countries.
Prices for oil and Natural gas both are expected to rise from today’s levels. Downward pressure on prices is largely due to higher US production of Tight oil and Shale gas, for which costs have come down and resource estimates have increased.
According to the IEA, there are four large-scale shifts foreseen to be happening in global energy scene:
Solar PV is on track to be the cheapest source of new electricity in many countries Renewable energy sources is expected to supply more than 40% of the incremental primary energy demand to 2040 in the New Policies Scenario, more than any other fuel. Renewables growth will not be limited to the power sector since the direct use of renewables for heat and transport doubles to 2040. China remains the world leader in renewable energy use, followed by the United States, the European Union and India.
China’s new drive to “make the skies blue again” is recasting its role in energy. China is significantly trying to increase the share of renewables in it’s energy mix and reducing the extremely high stake of coal. As the world’s biggest energy consumer, China’s new driving role will now drive the global energy markets in a different but significant way. While China’s demand growth continues with a slower pace, India takes the lead.
Electricity demand is foreseen to rise by 60% to 2040 in the New Policies Scenario, with over 85% of global growth occurring in developing economies. Motor systems, appliances, cooling, and information and communication technologies (ICT) make up almost 75% of the global increase in electricity demand.
If the Sustainable development scenario could be achieved with a worldwide concensus by 2040 we could have 875 million Electric vehicles on the roads (compared to 275 million in the New Policies Scenario), twice more efficient Energy consumption compared to 2016, and a 3250 Gigawatt Solar Photovoltaic (PV) capacity. Wouldn’t it be a brighter and sustainable World?