World energy outlook, predictions and resources

Yes we can, says the IEA. But it’ll be our biggest achievement 

The International Energy Agency put out its latest energy outlook thinking a few days ago.

It makes bleak reading but contains some chinks of light.

The message I take from it is: Yes we are in a right mess, but it’s by no means impossible to escape from our current situation, if we can engage in the systems change and beat the short term thinking that dominates today’s political culture world-wide.

That’s a big if. But it’s where business will play a key role.

Here’s some extracts that may be of interest. There’s a fair bit here, but then this is complex and very important stuff, so you should read it. And so should all your colleagues, CEO, board and everyone down to the company cat.

Overall headlines:

  1. “Global primary energy demand rebounded by a remarkable 5% in 2010, pushing CO2 emissions to a new high. 
  2. Subsidies that encourage wasteful consumption of fossil fuels jumped to over $400 billion. 
  3. The number of people without access to electricity remained unacceptably high at 1.3 billion, around 20% of the world’s population. 
  4. Despite the priority in many countries to increase energy efficiency, global energy intensity worsened for the second straight year.
  5. Non-OECD countries account for 90% of population growth, 70% of the increase in economic output and 90% of energy demand growth over the period from 2010 to 2035.
  6. China consolidates its position as the world’s largest energy consumer: in 2035 it consumes nearly 70% more energy than the United States, the second-largest consumer, even though, by then, per-capita energy consumption in China is still less than half the level in the United States. 
  7. The rates of growth in energy consumption in India, Indonesia, Brazil and the Middle East are even faster than in China.

Fossil fuels, power and six degrees of climate change
  1. The age of fossil fuels is far from over, but their dominance declines. Demand for all fuels rises, but the share of fossil fuels in global primary energy consumption falls slightly from 81% in 2010 to 75% in 2035.
  2. Natural gas is the only fossil fuel to increase its share in the global mix over the period to 2035. 
  3. In the power sector, renewable energy technologies, led by hydropower and wind, account for half of the new capacity installed to meet growing demand. 
  4. In the New Policies Scenario (one of the IEA’s scenarios for energy), the world is on a trajectory that results in a level of emissions consistent with a long-term average temperature increase of more than 3.5°C. 
  5. Without these new policies, we are on an even more dangerous track, for a temperature increase of 6°C or more.
  6. Four-fifths of the total energy-related CO2 emissions permissible by 2035 in the 450 Scenario are already “locked-in” by our existing capital stock  (power plants, buildings, factories, etc.). 
  7. If stringent new action is not forthcoming by 2017, the energy-related infrastructure then in place will generate all the CO2 emissions allowed in the 450 Scenario up to 2035, leaving no room for additional power plants, factories and other infrastructure unless they are zero-carbon, which would be extremely costly. 
  8. Delaying action is a false economy: for every $1 of investment avoided in the power sector before 2020 an additional $4.3 would need to be spent after 2020 to compensate for the increased emissions.
  9. All of the net increase in oil demand comes from the transport sector in emerging economies, as economic growth pushes up demand for personal mobility and freight. Oil demand (excluding biofuels) rises from 87 million barrels per day (mb/d) in 2010 to 99 mb/d in 2035. The total number of passenger cars doubles to almost 1.7 billion in 2035. 
  10. Natural gas is the cleanest of the fossil fuels, but increased use of gas in itself (without carbon capture and storage) will not be enough to put us on a carbon emissions path consistent with limiting the rise in average global temperatures to 2°C.
Rewewables and the importance of Carbon Capture and Storage (CCS)
  1. The share of non-hydro renewables in power generation increases from 3% in 2009 to 15% in 2035, underpinned by annual subsidies to renewables that rise almost five-times to $180 billion. China and the European Union drive this expansion, providing nearly half of the growth
  2. The contribution of hydropower to global power generation remains at around 15%, with China, India and Brazil accounting for almost half of the 680 gigawatts of new capacity.
  3. Maintaining current policies would see coal use rise by a further 65% by 2035, overtaking oil as the largest fuel in the global energy mix. 
  4. In the New Policies Scenario, global coal use rises for the next ten years, but then levels off to finish 25% above the levels of 2009. 
  5. Realisation of the 450 Scenario requires coal consumption to peak well before 2020 and then decline.
  6. China’s consumption of coal is almost half of global demand and its Five-Year Plan for 2011 to 2015, which aims to reduce the energy and carbon intensity of the economy, will be a determining factor for world coal markets.
  7. If CCS is not widely deployed in the 2020s, an extraordinary burden would rest on other low-carbon technologies to deliver lower emissions in line with global climate objectives.

Investment headlines and the need for government action
  1. We estimate that, in 2009, around $9 billion was invested globally to provide first access to modern energy, but more than five-times this amount, $48 billion, needs to be invested each year if universal access is to be achieved by 2030. 
  2. Providing energy access for all by 2030 is a key goal announced by the UN Secretary-General. Today, 1.3 billion people do not have electricity and 2.7 billion people still rely on the traditional use of biomass for cooking. 
  3. The investment required is equivalent to around 3% of total energy investment to 2030. Without this increase, the global picture in 2030 is projected to change little from today and in sub-Saharan Africa it gets worse. Some existing policies designed to help the poorest miss their mark. Only 8% of the subsidies to fossil-fuel consumption in 2010 reached the poorest 20% of the population.
  4. More finance, from many sources and in many forms, is needed to provide modern energy for all, with solutions matched to the particular challenges, risks and returns of each category of project. 
  5. Private sector investment needs to grow the most, but this will not happen unless national governments adopt strong governance and regulatory frameworks and invest in capacity building. 
  6. The public sector, including donors, needs to use its tools to leverage greater private sector investment where the commercial case would otherwise be marginal. 
  7. Universal access by 2030 would increase global demand for fossil fuels and related CO2 emissions by less than 1%, a trivial amount in relation to the contribution made to human development and welfare.”

Further reading:

Here’s a few niche energy industry websites I’ve had a hand in setting up in the last few years that may be of interest to you.

Each has an experienced editor and freelance writers all over the world.

They are all free to read and to sign up to.

windenergyupdate.com (Wind energy analysis and news)
csptoday.com (Concentrated solar power analysis and news)
pv-insider.com (Photovoltaic industry analysis and news)
nuclearenergyinsider.com (Nuclear industry, obviously)
tidaltoday.com (tidal, marine and wave power analysis and news)
evupdate.com (Electric vehicle industry analysis and news)
smartgridupdate.com (Smart Grids, as you’d imagine from the name)

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