Share of renewables to remain small to 2030

LONDON, England,

2004-11-03

Refocus Weekly

Global production of non-hydro renewables will treble by 2030, but will supply only 6% of the world’s electricity, according to the latest World Energy Outlook from the International Energy Agency.

Primary energy demand will rise 59% by 2030 under the ‘reference scenario’ that assumes no new government policies or accelerated deployment of new technology. Coal, oil and natural gas will meet the need for 85% of that increased demand, with two-thirds of demand coming from China, India and other countries in the developing world.

“It is clear from our analysis that achieving a truly sustainable energy system will call for technological breakthroughs that radically alter how we produce and use energy,” explains the 600-page report. Under the ‘alternative scenario,’ government actions could slow emissions of CO2 “but they could not reduce them significantly using existing technology.”

Although primary energy demand will expand, the projected growth will be 1.7% a year, slower than the 2% average annual increases of the past three decades. Oil will remain the single largest primary energy fuel, while consumption of natural gas will almost double due to strong demand from power generators. The share of coal will fall slightly but remain the leading fuel for electricity generation, while the share of nuclear will decline.

“Advanced nuclear-reactor designs or breakthrough renewable technologies could one day help free us from our dependence on fossil fuels,” but that is unlikely to happen before 2030, it adds. “The pace of technology development and deployment in these and other areas is the key to making the global energy system more economically, socially and environmentally sustainable in the long term.”

The share of hydroelectricity will decline for electricity generation, but other renewables will rise from the 2% level in 2002 to 6% in 2030. Most of the increase will be in wind and biomass, with wind becoming the second-largest source of green power by 2030 despite the fact that “finding good sites for land-based wind turbines is becoming more difficult in some areas.” The largest increases in renewables will occur in European countries of the OECD, where they enjoy strong government backing.

Developing countries will account for almost half of total energy demand by 2030, and their share of global demand will increase for all primary energy sources except non-hydro renewables. Their share of nuclear will increase quickly due to strong demand in China and other regions of Asia, and their share of coal consumption will also increase sharply.

Consumers must be willing to pay the full cost of energy (including environmental costs) before renewable energy technologies can become competitive, and governments must “decide today” to accelerate that process, says the report. Carbon capture and storage technologies are not considered in either the reference or alternative scenario, but they “hold out the tantalising prospect of using fossil fuels in a carbon-free way.”

Meeting the projected demand for energy will require investments of US$16 trillion by 2030, or $568 billion per year, with the electricity sector absorbing the majority and developing countries needing half. World demand for electricity will double and, by 2030, generation facilities will consume half of world natural gas.

“What this analysis shows very clearly, is that achieving a truly sustainable energy system will depend on technological breakthroughs that radically alter how we produce and use energy,” says Claude Mandil of IEA. “Our analysis shows that more vigorous government action could steer the world onto a markedly different energy path.”

Although energy resources are “more than adequate” to meet world demand during the period of the outlook and “well beyond,” the report says it is not possible to estimate how much it will cost to extract and deliver conventional fuels. “Serious concerns about energy security emerge from the market trends” as vulnerability to supply disruptions will grow.

“Energy is a prerequisite to economic development,” and electrification rates will rise while the total number of people without electricity will fall to 1.4 billion in 2020 from the 1.6 billion in 2002. “The number of people using only traditional biomass for cooking and heating in unsustainable ways will continue to grow, from just under 2.4 billion in 2002 to over 2.6 billion in 2030.”

The ‘alternative scenario’ depicts a “more efficient and more environment-friendly energy future” if countries were to implement a “set of policies and measures that they are currently considering or might reasonably be expected to adopt” that foster the faster deployment of cleaner technologies. Under this scenario, global primary energy demand would be 10% lower by 2030 than the ‘reference scenario’ with a larger reduction in demand for fossil fuels “thanks largely to policies that promote renewable energy sources.”

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