The world’s frenzied economic growth through 2040 won’t be matched by electricity demand growth, the Energy Information Administration (EIA) says in the International Energy Outlook 2016 (IEO2016 ) released on May 11.
World net electricity generation will jump 69% by 2040, the IEO2016 reference case projects, but that is still well below “what it would be if economic growth and electricity demand growth maintained the same relationship they had in the recent past,” the agency’s biannual forecast says.
According to the EIA, from 2005 to 2012, world gross domestic product (GDP) increased by 3.7% per year while world net electricity generation rose by 3.2% per year. The IEO2016reference case suggests that between 2012 and 2040, while world GDP will sprout by 3.3% per year, but world net electricity generation will grow only about 1.9% per year.
The lowered demand growth projections hinge on actions that many countries may take to improve efficiency. Most members of the Organisation for Economic Co‑operation and Development (OECD) are also pursuing policies and rules that could force generators to curb their carbon dioxide emissions.
The IEO2016 reflects newly introduced clean energy policies, including China’s target to get 15% of its electricity from renewables by 2020, the European Union’s 2030 Energy Frameworkobjectives, and India’s ambitious wind and solar initiatives. It does not, however, include the effect of the August 2015–finalized Clean Power Plan (though effects of the proposed rule are considered).
A Shadow on Coal Generation, a Spotlight on Natural Gas, Renewables, Nuclear
Among its notable findings [SLIDESHOW] is that coal’s share of world generation, which has typically hovered between 37% and 40% since the 1980s, will drop from 40% in 2012 to 29% in 2040—even as world coal-fired generation increases by 25% through 2040. These echo findings by the International Energy Agency in its November 2015–released World Energy Outlook (WEO-2015), which projects that coal’s share will drop from 41% in 2013 to 30% in 2040.
And despite current low oil prices, the use of petroleum and other liquid fuels for power generation is also expected to fall. The EIA projected that oil prices will be higher in the long term, and generation from liquid fuels will fall from 5% in 2012 to 2% in 2040.
Comparatively, the IEO2016 foresees a tremendous expansion for both the shares of renewables and natural gas generation. Renewables’ share is expected to grow from 22% in 2012 to 29% in 2040—mostly from hydropower, but also substantially from nonhydropower renewables. The share of nonhydropower renewables is projected to shoot up from 5% in 2012 to 14% in 2040 in the IEO2016 reference case. In developing countries, solar’s forecast growth—at an average 15.7% per year over the period—is expected to overshadow wind’s 7.7% and geothermal’s 8.6% per year growth. In the OECD region, wind, solar, and geothermal generation is predicted to grow at comparable rates of about 4.5% per year.