The latest World Energy Outlook from the International Energy Agency (IEA) finds that solar power is quickly becoming the cheapest source of new electric generation. The report also found that the world’s energy demand will be 30 percent higher by 2040 but would be almost twice as high if without energy efficiency improvements.
Overall the the outlook observed that four things will drive changes in the global energy system going forward. Renewable energy cost reductions are driving international deployment. China’s new economic strategy will take it on a pathway to cleaner energy. The US will become the world’s leader in oil and gas thanks to shale oil production. Also, the amount of electric generation in the world’s energy mix is growing.
“Solar is forging ahead in global power markets as it becomes the cheapest source of electricity generation in many places, including China and India,” said Dr Fatih Birol, the IEA’s executive director. “Electric vehicles (EVs) are in the fast lane as a result of government support and declining battery costs but it is far too early to write the obituary of oil, as growth for trucks, petrochemicals, shipping and aviation keep pushing demand higher. The US becomes the undisputed leader for oil and gas production for decades, which represents a major upheaval for international market dynamics.”
While China and India will lead the world in solar deployments, wind will be leading source of electricity in the European Union after 2030. China is looking to improve its air quality. As such its moving to cleaner energy technologies as it moves from coal to wind, solar, nuclear and electric vehicles. The outlook said that it will account for more than a quarter of projected growth in natural gas consumption.
The outlook found that the boom years for coal are over. The demand for oil is slowing down but will won’t fall before 2040 even as the demand for EVs goes up.
Given the growth in China and India, Asia is expected to account for more than 70 percent of global oil and gas imports by 2040. The US will be become a major exporter of natural gas and oil. Trucks, aviation and shipping demands will drive oil use even though vehicles are more efficient than and are becoming increasingly electrified.Tweet