EIA Projects Massive Growth for Renewables, Nuclear Power Through 2040

The U.S. Energy Information Administration’s (EIA’s) International Energy Outlook 2013 (IEO2013) released today projects that renewable energy and nuclear power will each increase 2.5% per year through 2040, but fossil fuels will continue to supply almost 80% of world energy use by 2040.

According to the new IEO2013, energy consumption around the world is set to grow by 56% between 2010 and 2040, mostly in developing countries. World energy consumption will rise from 524 quadrillion British thermal units (Btu) in 2010 to 630 quadrillion Btu in 2020 and to 820 quadrillion Btu in 2040, the EIA forecasts. Energy use in countries outside the Organization for Economic Cooperation and Development (OECD) will grow 90% while in OECD countries, growth will spurt a moderate 17%.

World net electricity generation is, meanwhile, forecast to increase by 93% in the IEO2013 Reference case, from 20.2 trillion kWh in 2010 to 39.0 trillion kWh in 2040. Total net electricity generation in non-OECD countries increases by an average of 3.1% per year in the Reference case, led by non-OECD Asia (including China and India), where annual increases average 3.6% from 2010 to 2040. In contrast, total net generation in the OECD nations grows by an average of 1.1% per year from 2010 to 2040.

The IEO2013 Reference case projects increases for world consumption of marketed energy from all fuel sources through 2040. World coal consumption is forecast to rise about 1.3% per year through 2040, reflecting significant increases in China, India, and other non-OECD countries. However, the outlook notes that due to environmentally driven policies, "coal’s share of world energy consumption stops growing in the next decade and gradually declines after 2025"—particularly in the power sector.

For example, the coal-fired share of world electricity generation declines from 40% in 2010 to 36% in 2040, while the renewables share increases from 21% to 25%, the natural gas share from 22% to 24%, and the nuclear share from 13% to 14%.

The report highlights that natural gas will be the fastest growing fossil fuel over the next three decades as global natural gas consumption increases by 1.7% per year, from 113 trillion cubic feet in 2010 to 185 trillion cubic feet in 2040.

"Natural gas continues to be the fuel of choice for the electric power and industrial sectors in many of the world’s regions, in part because of its lower carbon intensity compared with coal and oil, which makes it an attractive fuel source in countries where governments are implementing policies to reduce greenhouse gas emissions," the report says. "In addition, it is an attractive alternative fuel for new power generation plants because of relatively low capital costs and the favorable heat rates for natural gas generation." The EIA projects that industrial and electric power sectors together account for 77% of the total projected world increase in natural gas consumption.

Significantly, the report notes that world natural gas trade, both by pipeline and by shipments of liquefied natural gas (LNG), is poised to increase. LNG’s share of world natural gas trade will more than double, with most increases in liquefaction capacity in Australia, the U.S., and Canada, "where a multitude of new liquefaction projects are expected to be developed, many of which will become operational within the next decade." Pipeline transportation of natural gas will also soar, however, and the outlook includes several new long-distance pipelines and expansions of existing infrastructure through 2040. "The largest volumes of internationally traded natural gas by pipeline currently occur between Canada and the United States, and among a number of OECD and non-OECD countries in Europe. By the end of the projection period, the IEO2013 Reference case also includes large volumes of pipeline flows into China from both Russia and Central Asia."

A Deluge of Hydro, Wind; Carbon, Energy Security Worries Buoy Nuclear Power

At the same time, almost 80% of the projected increase in renewable electricity generation is fueled by hydropower and wind power. Most of the growth in hydroelectric generation (82%) occurs in the non-OECD countries, and more than half of the growth in wind generation (52%) occurs in the OECD countries. "High construction costs can make the total cost of building and operating renewable generators higher than those for conventional plants. The intermittence of wind and solar energy, in particular, can further hinder the economic competitiveness of those resources, as they are not necessarily available when they would be of greatest value to the system. However, improving battery storage technology and dispersing wind and solar generating facilities over wide geographic areas could help to mitigate some of the problems associated with intermittency over the projection period," the EIA projects.

Nuclear power, too, will see significant growth, despite consequences of the March 2011 disaster at Fukushima Daiichi. Electricity generation from nuclear power worldwide increases from 2,620 billion kWh in 2010 to 5,492 billion kWh in 2040 in the IEO2013 Reference case, as "concerns about energy security and greenhouse gas emissions support the development of new nuclear generating capacity." The outlook notes that while, in addition to the four damaged Fukushima Daiichi reactors, Japan’s 50 other nuclear reactors were shut down over the following 14 months, two reactors have returned to service, and "additional reactors are expected to return to service soon." And, though Germany and Switzerland had pledged to phase out nuclear power altogether, substantial increases in nuclear generating capacity are projected for several other countries, including 149 GW in China, 47 GW in India, 31 GW in Russia, and 27 GW in South Korea.

The report notes that the industrial sector continues to account for the largest share of delivered energy consumption, and the world industrial sector still consumes over half of global delivered energy in 2040, the EIA notes. "Given current policies and regulations limiting fossil fuel use, worldwide energy-related carbon dioxide emissions rise from about 31 billion metric tons in 2010 to 36 billion metric tons in 2020 and then to 45 billion metric tons in 2040, a 46-percent increase."

Sources: POWERnews, EIA

Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)