World energy consumption will increase by 48% over the next three decades, with natural gas remaining a dominant source of that energy, but renewables will be the fastest-growing, the Energy Information Administration (EIA) said Wednesday.
"Developing Asia accounts for more than half of the projected increase in global energy use through 2040," said EIA Administrator Adam Sieminski. "This increase will have a profound effect on the development of world energy markets."
Global energy use is projected to increase an average 1.4% per year, from 549 quadrillion Btu in 2010 to 815 quadrillion Btu in 2040, according to EIA's International Energy Outlook 2016 (IEO). The increase mainly occurs in the developing world, driven by long-term growth in economies and populations.
The projection is 5 quadrillion Btu higher than EIA had forecast in its previous IEO, which was released three years ago, when the agency forecast world energy consumption would reach 820 quadrillion Btu in 2040 (see Daily GPI, July 26, 2013). The difference is due to a variety of things, including tumbling oil and gas prices and more detailed modeling used in the reference case, Sieminski said.
Perhaps counter-intuitively, EIA expects the world's population to grow somewhat slower than the forecast energy growth. But industrial energy consumption will push total energy consumption higher, Sieminski said.
"Industrial consumption is continuing to go up, and industry uses a lot of energy of all kinds," he said. "It still accounts for over half -- 53-54% -- of total energy consumption. As economies and populations grow, people want manufactured goods, and so industrial use rises."
The IEO reference case projects renewables as the world's fastest-growing energy source, increasing by an average 2.6% per year through 2040, but fossil fuels still supply more than three-quarters of world energy use. Although petroleum and other liquids remain the largest source of energy, the liquid fuels share of world marketed energy consumption is projected to fall from 33% in 2012 to 30% in 2040.
Natural gas is the fastest-growing fossil fuel in the outlook. Global natural gas consumption is expected to grow by an average 1.9% per year.
"Abundant natural gas resources and robust production -- including rising supplies of tight gas, shale gas, and coalbed methane -- contribute to the strong competitive position of natural gas," EIA said.
Coal, on the other hand, will be the world's slowest-growing energy source, rising by 0.6% per year through 2040. And by 2030, natural gas is expected to surpass coal to become the world’s second-largest energy source after liquid fuels. The top three coal-consuming countries -- China, the United States, and India -- together account for more than 70% of the world's coal use in the reference case.
By 2040, EIA expects coal, natural gas and renewable energy sources will provide roughly equal shares (28-29%) of world electricity generation. That's a significant change from 2012, when coal provided 40% of all power generation. Hydropower and wind are expected to be the two largest contributors to the increase in world electricity generation from renewable energy sources, together accounting for two-thirds of the total increase by 2040.
Worldwide electricity generation from nuclear power is expected to increase from 2.3 trillion kWh in 2012 to 4.5 trillion kWh in 2040, as concerns about energy security and greenhouse gas emissions support the development of additional nuclear generating capacity. Virtually all of the projected net expansion in the world's installed nuclear capacity occurs in the developing world, led by China’s addition of 139 GW of nuclear capacity from 2012 to 2040.
Countries that are not part of the Organisation for Economic Co-operation and Development (OECD) “will account for a significant portion -- three-quarters -- of the growth in natural gas consumption," Sieminski said. "A lot of this has to do with the transition away from coal, and electricity generation. This will happen in many places around the world, and it will reduce carbon dioxide emissions by a significant amount."
Increasing natural gas production is likely to come out of China, non-OECD Asia, Iran, Saudi Arabia, Russia and shale plays in the United States.
"The big player is and will continue to be the United States in terms of production of shale gas, tight gas [and] coalbed methane," he said.
And the United States is expected to become a net exporter of natural gas late this year or early in 2017, Sieminski said.
"It will be through a combination of LNG [liquefied natural gas] and pipeline gas exports to Mexico that the U.S. becomes a net exporter of gas. That was something that most people would have thought impossible just 10 years ago."
The industrial sector continues to account for the largest share of delivered energy consumption in the reference case, using more than half of global delivered energy in 2040. And worldwide energy-related carbon dioxide emissions rise from 32 billion metric tons in 2012 to 36 billion metric tons in 2020, and then to 43 billion metric tons in 2040, a 34% increase from 2012 to 2040.
Release of the IEO is a prelude to EIA's Annual Energy Outlook (AEO), a yearly analysis of the U.S. energy markets and outlook. The next iteration of the AEO is due in June.