The IEA (International Energy Agency) released its World Energy Outlook 2015 on 10 November. The highly regarded and anticipated annual publication makes the following key points in 2015, with its projections reaching out to 2040:
- Lower oil prices trigger energy-security concerns by heightening reliance on a small number of low-cost producers(for example in the Middle-East). In the central scenario* of WEO 2015, a tightening oil balance leads to a price around $80 per barrel by 2020, and not return to $100 before 2040.
- Gas will become the fastest growing fossil fuel over the next 35 years, with demand focused on China and the Middle East.
- China’s coal use reaches a plateau at close to today’s levels, as its economy rebalances and overall energy demand growth slows, then declines. India is the subject of an in-depth focus – and is projected to move centre stage in global energy, with high levels of economic growth, a large, growing population and low but increasing levels of energy use per capita ultimately pushing energy demand to two-and-a-half-times current levels.
- There will be a decoupling of economic growth and energy demand in developed countries. Energy-related emissions are expected to rise by 0.6 per cent per year until 2020 and 0.5 per cent annually in the 2020s and 2030s - well below projected global economic growth rates.
- Renewables are set to become the leading source of new energy supply from now to 2040. They made up half of new capacity additions in 2014, which installed 130GW of new renewable electricity capacity, outstripping any other form of new power capacity. From 2015 to 2040 the world is expected to deploy 3,600GW of new renewable energy capacity. Renewables-based generation reaches 50% in the EU by 2040, around 30% in China and Japan, and above 25% in the United States and India.
- If countries fulfil their climate change pledges (INDCs), the world is on course for 2.7C global warming. The IEA's central scenario shows energy related CO2 emissions increase to 36.6Gt in 2040, which is 16 per cent higher than 2013 levels. The report warns only 40 per cent of INDCs include plans to increase renewable energy deployment and only one third include plans to reduce energy wastage. WEO-2015 central scenario is that the growth in energy-related emissions slows dramatically, but the emissions trajectory implies a long-term temperature increase of 2.7C by 2100
*The IEA’s Central Scenario reflects commitments made by governments to date (such as their Intended Nationally Determined Contributions under the UN Framework Convention on Climate Change process), but not necessarily yet fully implemented.
As with all projections and outlooks, the IEA makes a series of assumptions to derive all of these figures.
- 24 November 2015