In the next 25 years, the world will turn increasingly to renewables and natural gas to meet energy demand, turning away from coal, according to the International Energy Agency’s (IEA) World Energy Outlook 2017 (WEO).
As in previous years, the report makes predictions based on different scenarios. This year’s include a New Policies Scenario, which “describes where existing policies and announced intentions might lead the energy system,” and a Sustainable Development Scenario, which considers what would need to be done for the world to meet the energy-related aspects of the United Nations Sustainable Development Goals.
The Fall of Coal
Under the New Policies Scenario: “Renewable sources of energy meet 40% of the increase in primary demand and their explosive growth in the power sector marks the end of the boom years for coal,” the report says.
From 2000 to now, coal-fired generation worldwide has grown by about 900 GW, the report notes. In contrast, net additions of coal-fired energy generation capacity through 2040 are expected to total only about 400 GW under the New Policies Scenario.
The mix of renewables is projected to vary regionally. For example, solar is expected to be deployed rapidly in China and India, eventually becoming the world’s largest source of low-carbon capacity. In the European Union, renewables are projected to account for 80% of new capacity with wind becoming the leading source of electricity shortly after 2030.
The New Policies Scenario sees an increase in global energy needs as the population grows and urbanization takes hold. However, according to the report, the projected growth will occur more slowly than in the past and will be largely concentrated in developing countries. “The largest contribution to demand growth – almost 30% – comes from India, whose share of global energy use rises to 11% by 2040 (still well below its 18% share in the anticipated global population),” the report says, going on to note that on a whole, developing nations in Asia alone are projected to account for two-thirds of demand growth. Significant demand growth is also expected in the Middle East, Africa, and Latin America.
The report also predicts big changes in China, as the nation shifts away from an economy based largely on heavy industry and manufacturing. “The president’s call for an ‘energy revolution,’ the ‘fight against pollution’ and the transition towards a more services-based economic model is moving the energy sector in a new direction. Demand growth slowed markedly from an average of 8% per year from 2000 to 2012 to less than 2% per year since 2012, and in the New Policies Scenario it slows further to an average of 1% per year to 2040,” the report explains.
The Sustainable Development Scenario is a new feature of the WEO. The IEA considered first the energy-related portions of the UN’s Sustainable Development Goals, and then worked backward to determine what would be needed to reach these goals.
The portions of the Sustainable Development Goals related to the energy sector are: determined action on climate change; universal access to modern energy by 2030; and a dramatic reduction in air pollution. “Central to these outcomes is the achievement of an early peak in CO2 emissions and a subsequent rapid decline, consistent with the Paris Agreement. A key finding is that universal access to electricity and clean cooking can be reached without making this task any more challenging,” according to the WEO.
In this scenario, power generation is nearly decarbonized by 2040, with renewables accounting for more than 60% of the mix, followed by nuclear at 15%, and power generation with carbon capture and storage contributing 6%. Coal demand goes into an immediate decline. Natural gas consumption rises by nearly 20% to 2030 and then more or less flat-lines, though the report warns against relying too heavily on the fuel unless action is taken to minimize methane leaks.
“In energy systems heavily reliant on coal (as in China and India), where renewable alternatives are less readily available (notably in some industrial sectors), or where seasonal flexibility is required to integrate high shares of variable renewables, gas plays an important role. Stepping up action to tackle methane leaks along the oil and gas value chain is essential to bolster the environmental case for gas,” the report says of the future of natural gas under the Sustainable Development Scenario.
—Abby L. Harvey is a POWER reporter.