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Renewable energy to become world's second-largest power generation source by 2015, says IEA

Nov 12, 2012 -

The global energy map is changing “in dramatic fashion”, the International Energy Agency (IEA) said today, as it launched the 2012 edition of its World Energy Outlook.

While it's America’s push on oil and gas production, rather than renewable energy, making the most impact globally, the agency predicts that renewables will become the world's second-largest source of power generation by 2015 and close in on coal as the primary source by 2035.

However, this rapid increase in the role of renewable energy for power generation “hinges critically on continued subsidies”. In 2011, subsidies for renewables (including for biofuels) amounted to $88 billion - over the period to 2035 they need to increase to $4.8 trillion, the IEA says. Over half of this has already been committed to existing projects or is needed to meet 2020 targets.

Greenpeace quickly picked up on the fact that the IEA’s forecast “shows more work [is] needed to avoid catastrophic climate change”. Government ambition on developing renewable energy is “seriously inadequate” to meet their promises to hold the average global temperature increase to 2 degrees Celsius, said Sven Teske, energy campaigner with Greenpeace International.

“Renewable energy must grow to 65% of electricity production and energy efficiency must increase by 2035 to reduce the impact of climate change. Otherwise, based on this forecast, the world is still headed for a catastrophic temperature increase of 4 to 6 degrees Celsius,” he said.

The IEA's new policy scenario, the main analytical scenario underpinning its World Energy Outlook, shows that by 2035:

Global electricity consumption would grow by 15,000TWh with 7000TWh covered by renewables.

3400TWh of wind and solar powered generation would be added, more than the entire electricity consumption of the European Union.

The Greenpeace Energy [R]evolution 2012 scenario for replacing fossil fuels with renewable energy, shows:

Double the new renewables of the IEA forecast are required, coupled with increased energy efficiency, to address climate change adequately,

Renewable energy can reach 65% of global electricity production with the right government programmes and incentives.

Teske added: "Without increased ambition on renewables, the IEA shows that almost 700 new, dirty coal-fired power plants could be developed by 2025, a disaster for the climate and for precious water resources."

Water use for electricity generation

The IEA also notes that the energy sector already accounts for 15% of the world's total water use. “Its needs are set to grow, making water an increasingly important criterion for assessing the viability of energy projects”, it says.

In some regions, water constraints are already affecting the reliability of existing operations and they will introduce additional costs. It adds that expanding power generation and biofuels output underpin an 85% increase in the amount consumed (the volume of water that is not returned to its source after use) through to 2035, a point also stressed by Synapse Energy Economics recently.

Meantime, while ambitions for nuclear have been scaled back as countries have reviewed policies following the accident at Fukushima Daiichi, capacity is still projected to rise, led by China, Korea, India and Russia. But it is America’s drive on fossil fuels which will “recast expectations about the role of different countries, regions and fuels in the global energy system over the coming decades”, the IEA stressed.

"North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency," said IEA Executive Director Maria van der Hoeven. "This year's World Energy Outlook shows that by 2035, we can achieve energy savings equivalent to nearly a fifth of global demand in 2010. In other words, energy efficiency is just as important as unconstrained energy supply, and increased action on efficiency can serve as a unifying energy policy that brings multiple benefits."

Fossil fuel growth

The WEO finds that the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows. In the new policies scenario, the US becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035. North America emerges as a net oil exporter, accelerating the switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035.

While regional dynamics change, global energy demand will push ever higher, growing by more than one-third to 2035, the IEA continues. China, India and the Middle East account for 60% of the growth; demand barely rises in the OECD, but there is a pronounced shift towards gas and renewables.

Fossil fuels will remain dominant in the global energy mix, supported by subsidies that, in 2011, jumped by almost 30% to $523 billion, due mainly to increases in the Middle East and North Africa. Global oil demand grows by 7 mb/d to 2020 and exceeds 99 mb/d in 2035, by which time oil prices reach $125/barrel in real terms (over $215/barrel in nominal terms). A surge in unconventional and deepwater oil boosts non-OPEC supply over the current decade, but the world relies increasingly on OPEC after 2020. Iraq accounts for 45% of the growth in global oil production to 2035 and becomes the second-largest global oil exporter, overtaking Russia.

While the regional picture for natural gas varies, global demand increases by 50% to 5 trillion cubic metres in 2035. Nearly half of the increase in production to 2035 is from unconventional gas, with most of this coming from the United States, Australia and China. Meantime, whether demand for coal carries on rising strongly or changes course radically will depend on the strength of policy decisions around lower-emissions energy sources and changes in the price of coal relative to natural gas. In the new policies dcenario, global coal demand increases by 21% and is heavily focused in China and India.


Updated: 2016/06/30

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