Coal faces a “reversal of fortune,” clean power will make big strides, and India will become the new center of energy growth in 2040. These and other predictions appear in a new report on the future of energy.
The International Energy Agency released its World Energy Outlook Tuesday, three weeks before high-stakes climate talks begin in Paris.
Leaders at the UN-led summit will be pressed to slash the emissions that currently threaten to warm the globe more than 2 degrees Celsius, the point at which scientists say the worst effects of climate change will take hold.
Here are four highlights from the report:
Don’t Get Used to Low Oil Prices.
But you knew that, right? The price of crude, now around $45 per barrel, will likely be back to $80 by 2020, and just keep going up from there, IEA says. While production in the United States “resumes its upward march” after a short-term slowdown, demand for oil in the U.S., European Union, and Japan will drop in the coming decades.
IEA says there’s a chance oil prices will stay low—close to $50 per barrel—through the end of the decade, but only if there’s a “more stable” Middle East and continued high output from that region.
“Lower prices are not all good news for consumers,” the IEA points out, even though it might not feel that way for drivers at the gas pump. A longer period of relatively cheap oil would mean increased dependence on imports from OPEC producers. It would also mean “the world misses out on almost 15 percent of the energy savings,” worth $800 billion, that would otherwise happen with pricier oil, the report says.
Only One Fossil Fuel Will Have a Bigger Share of the Energy Pie.
The world’s energy use will grow one-third by 2040, driven in part by the roughly 400 million people who will gain access to electricity in the next 15 years.
While most of the demand will be met by fossil fuels, only natural gas, which burns cleaner than coal, will see its share of the energy mix grow. Natural gas use will go up almost 50 percent, but just how far the expansion continues beyond that will depend on the extent of competition from renewable energy and coal, the report says.
There’s another caveat. Leaks of methane, the powerful greenhouse gas, in the supply chain could undercut the environmental benefits of natural gas, the report says. Indeed, efforts by U.S. President Barack Obama to rein in those leaks have met with a mixed response, with environmentalists saying the action isn’t enough and industry saying proposed rules will hurt profitability.
Coal's share of the global energy mix grew from 23 to 29 percent over the last 15 years, but it now faces a “reversal of fortune,” the report says. Hobbled in the U.S. and elsewhere by regulations aimed at encouraging cleaner energy, the coal industry will be challenged to meet carbon dioxide emissions targets while keeping costs down.
Four out of five metric tons of coal will be burned in Asia by 2040, IEA says. Use will drop by 40 percent in a group of 34 countries that includes the U.S., Canada, and Australia.
Higher oil prices and coal's slowing growth are good news for clean energy, which will become ever more competitive as prices for wind and solar continue to drop. Renewable energy, not including hydroelectricity, is expected to provide between 30 and 41 percent of all power by 2040.
“This report shows how economic forces and new climate plans have positioned renewable energy as a dominant force in the global energy market,” says Jennifer Morgan, global director of the climate program at the World Resources Institute, an environmental research organization. “Combined with strong signals from the Paris climate agreement, renewable energy is poised to surge ahead even faster.”
India Will Eclipse China as the Growing Nation to Watch.
“China carries huge weight in the world of energy,” IEA says. It will still be the biggest coal consumer through 2040, and will also add the most renewably sourced power to its electric grid. By the 2030s, it will use the most oil, and will be on track to use almost twice as much energy as the U.S.
However, each step of economic growth in China will need less and less energy, and by 2030, the country’s emissions will peak.
That means India “seizes the center of the world energy stage” over the next 25 years, IEA says. India will account for most of the world’s growth in coal use, and its demand for oil will grow more than any other nation’s.
In its drive to provide power to the 240 million residents who lack it, India will also push for large, low-carbon sources such as hydropower and nuclear, but with the timeline for those uncertain, IEA says, India will need to focus harder on energy from the sun and wind.
We’re Still Not on Track to Make the Two-Degree Target.
The current trends, while encouraging, simply aren’t enough, IEA warns: Nations will need “progressively stronger climate commitments over time if the world is to keep to an emissions trajectory consistent with the 2 °C goal.”
What more can be done? The agency highlights five key steps: curbing methane emissions from the oil and gas industry; phasing out government subsidies for fossil fuels; increasing investments in renewable energy for electricity; ramping down the dirtiest coal power plants; and boosting energy efficiency for buildings, industry and transportation.