International Energy Administration (IEA) release their World Energy Outlook 2017 (WEO), highlighting four major shifts in global energy projected over the next 25 years. They include:
The elasticity of shale oil and gas in the US
The shale revolution and new technology lead to new resources being economically produced to help make US oil and gas output reach a level 50% higher than any other country has ever managed. The US will become a net oil exporter and the largest liquefied natural gas exporter by the late 2020’s. Major petrochemicals and other energy-intensive businesses will increase, as international trade flows will change. The Outlook projects that, with continued improvements on fuel economy, North America can be a major source of crude oil to the international market, with close to 70% of the world’s oil trades going to Asian markets by 2040.
Rapid utilization and decreasing costs of clean energy technologies
The way the world meets its growing energy needs will change greatly moving forward, as natural gas, renewables and energy efficiencies are major factors. Renewable energy sources will meet 40% of the increased primary energy demand. Serving as the least-cost source of energy, renewables are projected to lead the global investment in power plants, sharing in 40% of the total power generation by 2040. China and India aid in having solar photovoltaics (PV) become the largest source of low-carbon capacity in this period. The European Union may have 80% of new capacity due to renewables, with wind power the leading source of electricity. Renewables used for heat and transportation will also see an increase.
Growing electricity consumption
Forty percent of the rise in final energy consumption by 2040 will be due to electricity use, with 1/3 of that coming from industrial electric motor systems. As more new electricity consumers are added, increased household incomes allow for cooling systems, especially in China. As countries phase out sales of conventional gas and diesel vehicles, the global electric car fleet will increase to 280 million, up from the 2 million electric vehicles today.
Global investment in electricity overtakes that of oil and gas for the first time in 2016, due to the scale of future electricity needs and the trend toward decarbonizing power supplies. Adequate investments in electricity networks and a variety of generation technologies are needed to provide flexibility for meeting power system needs.
China’s shift to a more services-oriented economy and cleaner energy mix
China’s evolution of heavy industry, manufacturing exports, and infrastructure buildout decreased the country’s poverty, but provided environmental issues and a coal-dominated energy system. This is projected to change with the president’s call for an energy revolution, a decrease in pollution, and a more services-based economy. Demand growth is expected to slow down greatly from the 8% per year growth from the first decade of this century to about 1% per year by 2040. China will have a major role in determining global trends and could possibly lead to a faster transition to cleaner energy. The scenario outlined in the Outlook attributes 33% of the world’s new wind power and solar PV to China as well as 40% of the global investment in electric vehicles. Twenty-five percent of the global gas demands are expected to come from China, who will overcome the US as the largest oil consumer in 2030.
The Executive Summary or additional information on the World Energy Outlook can be found on the IEA website. IEA is a self-governing agency whose goals are to promote energy security amongst its 29 country members and to provide research and analysis on ensuring reliable, affordable and clean energy.