The International Energy Agency is urging world leaders to refrain from distractions in tackling the longer-term signs of stress that are emerging in the world energy system according to the newest World Energy Outlook (WEO-2014).
The IEA has mapped up new scenarios and predictions for what the global energy reality will be in 2040. In the central scenario of WEO-2014, world primary energy demand is 37 percent higher in 2040, putting more pressure on the global energy system. By that time, the world’s oil supply is expected to reach 104 million barrels per day (mb/d). The EIA claims that tight oil output in the United States will level off by the 2020’s along with other non-OPEC oil-producing countries falling back. In addition, growth in world oil demand will come to a near halt due to the largest consumers continuing a long-term decline.
A well-supplied oil market in the short-term should not disguise the challenges that lie ahead, as the world is set to rely more heavily on a relatively small number of producing countries,” said IEA Chief Economist Fatih Birol. “The apparent breathing space provided by rising output in the Americas over the next decade provides little reassurance, given the long lead times of new upstream projects.”
The only fossil fuel anticipated to be in high demand 25 years from now is natural gas. According to the WEO-2014, demand for gas is more than 50 percent higher in 2040, and the United States will remain the largest global gas producer, although production levels off in the late-2030s as shale gas output starts to recede.
By 2040, the IEA expects world energy sources to divide into four almost equal parts that include low-carbon sources (nuclear and renewables), oil, natural gas and coal. However, growing sources such as nuclear power face major challenges in competitive markets where there are significant market, storage waste and regulatory risks. Also, public acceptance for nuclear power remains a critical issue worldwide, and nearly 200 currently operating plants will be offline within 25 years.
The best hope to take over where petroleum will leave off could come from solar and wind power. But as the share of wind and solar power quadruples in terms of world energy supply, their integration will become more challenging both from a technical and market perspective. Nonetheless, IEA Executive Director Maria van der Hoeven feels renewable and budding energy-related technologies will keep the earth’s lights on in our near future. “As our global energy system grows and transforms, signs of stress continue to emerge,” stated van der Hoeven. “But renewables are expected to go from strength to strength, and it is incredible that we can now see a point where they become the world’s number one source of electricity generation.”
The IEA report also states that a critical “sign of stress” is the failure to transform the energy system quickly enough to stem the rise in energy-related CO2 emissions. In the central scenario, the entire carbon budget allowed for on a long-term global temperature increase of 2°C climate trajectory is consumed by 2040.
You can read a full recap of the IEA’s findings here.