Renewables to become leading source of new energy

10th November 2015


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  • Mitigation ,
  • Generation ,
  • Fossil fuels

Author

Adam Brennan

Renewables contributed almost half of the world's new power generation capacity last year and are now the second largest source of electricity after coal, the International Energy Agency (IEA) said today.

Publishing its annual World Energy Outlook (WEO) report, the IEA forecast that renewables would be the leading source of new energy supply worldwide from now to 2040.

Deployment is forecast to grow worldwide, particularly in the power sector, with renewables expected to overtake coal as the largest source of electricity generation by the early 2030s.

By 2040, renewables will generate half the electricity consumed in the EU, around 30% in China and Japan, and more than 25% in the US and India, the IEA predicts.

Although individual country carbon reduction pledges ahead of the Paris climate summit will give new impetus to a low carbon and more efficient energy system, the agency says they will do little to rein in energy demand.

Energy use worldwide is set to grow by one-third between now and to 2040, driven entirely by non-OECD countries, primarily India, China, Africa, the Middle East and those in Southeast Asia. Energy consumption will continue to fall in OECD countries, says the agency, led by the EU (-15% to 2040), Japan (-12%) and the US (-3%).

The agency forecasts that $7.4 trillion will be invested by 2040 in renewable energy, but said this represents only around 15% of total expenditure on global energy supply. Steady decarbonisation of electricity will not be matched by a shift in end use, where it is more difficult and expensive to replace coal and gas as fuels for industry, or oil as a transport fuel, the agency predicts.

The WEO concludes that the world is on course for a temperature increase of 2.7°C by 2100 and supports measures proposed through UN talks for progressively stronger commitments over time.

"The IEA stands ready to support the implementation of an agreement reached in Paris with all of the instruments at our disposal, to track progress, promote better policies and support the technology innovation that can fulfil the world's hopes for a safe and sustainable energy future," said IEA executive director Fatih Birol.

Other IEA predictions for 2040:

  • Energy efficiency will limit world energy demand growth to one-third, while the economy grows by 150%. Mandatory targets in China and India have increased global coverage of efficiency regulation in industry from 3% in 2005 to more than one third today. In OECD countries, efficiency measures will reduce demand growth to 60% of what would otherwise be expected.
  • China's total energy demand will be almost double that of the US. However, each unit of future economic growth will require 85% less energy than has been the case in the past 25 years due to the economy shifting from heavy industry to services. China's CO2 emissions are expected to peak around 2030.
  • India will contribute the largest share of growth in global energy demand, at around 25%. A modernisation programme, manufacturing expansion, a rise in population and incomes will see India enter a sustained period of rapid growth in energy consumption. India will become the largest source of growth in both coal and oil use. Low-carbon energy generation will rise, mostly through solar and wind power.
  • Natural gas will be the fastest-growing fossil fuel, with a rise in consumption of almost 50%. China and the Middle East will drive this growth, both becoming larger consumers than the EU, where gas use does not return to the peak reached in 2010.
  • Coal will only meet around 10% of growth in energy demand, mainly in India and Southeast Asia. Consumption in OECD countries is projected to drop by 40%, while in the EU it will fall to around a third of current levels, mainly due to environmental policies.
  • Fossil fuel subsidies totalled around $490 billion in 2014 globally, though this is less than the $610 the IEA predicts would have been spent without reforms since 2009. Renewable energy subsidies in the power sector were $112 billion in 2014, and $23 billion for biofuels.

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