EIA: Global energy demand to rise, carbon intensity fall by 2040

Renewable energy’s share of global electricity generation will match coal-fired power by 2040, according to the new international outlook by the U.S. Energy Information Administration.

Yet both will lag somewhat behind the fast rise of natural gas, the report shows.

The EIA’s latest long-term outlook, released Thursday morning, anticipates that renewable energy will account for 31 percent of worldwide electricity output—same as coal—as wind and solar gain market share. Coal’s overall usage, however, will remain at just more than 150 quadrillion BTU per year for the next few decades.

The changing mix will bring down the carbon intensity of energy output both for OECD (Organization for Economic Co-operation and Development) nations and less developed nations, as China begins moving away from coal and others embrace lower-emitting natural gas and non-emitting clean energies, according to the EIA.

“Energy intensity has been decreasing for a while,” said Ian Maule, who headed up the analysis for the EIA. “What’s different going forward is that carbon intensity associated with the non-OECD world is also dropping.”

The report shows that the carbon intensity of non-OECD energy use will fall from the current 65 metric tons per billion British thermal units (Btu) to less than 60 tons per billion Btu by 2040. OECD-based carbon intensity also will fall from almost 60 to less than 50 tons per billion Btu in the same period.

This happens despite the EIA’s projection that overall energy demand will rise 28 percent globally from the 2015 baseline to 2040. Fast-moving economic development in China and India will account for much of this growth rate.

China will slowly begin ramping down its coal portion of generation beginning 2030, the EIA predicted. The nation’s 13th five-year plan set a goal of capping coal capacity at 1,100 GW by 2020 and cancelled approximately 120 GW of previously planned coal generation projects.

Hydropower’s dominant share of renewable generation is expected to fall from 71 percent two years ago to 53 percent in 2040. Resource availability and other concerns will likely limit the number of new projects.

Renewable energy will boast the biggest percentage increase in its share of the generation mix—starting from a smaller baseline, of course—but natural gas will be the preeminent driver of new electricity capacity in coming decades, according to the EIA>

Worldwide natural gas consumption will rise 43 percent through 2040 as both developed and non-developed nations utilize the cheaper, cleaner (compared to coal) and more abundant fuel. The electric power and industrial sectors will account for nearly 75 percent of gas-fired capacity addition during that period.

“Natural gas-fired generation is attractive for new power plants because of low capital cost, favorable heat rates and relatively low fuel cost,” Maule said.

Electricity use in buildings worldwide will grow about 2 percent annually. Economic growth and infrastructure buildouts in non-OECD accounts for a higher portion of that increase, as India moves toward urbanization, in particular.

Residential energy use in developed nations remains flat through 2040, but non-OECD Asia will almost double to 20 quadrillion BTUs, according to the report.

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