US EIA Predicts 28% Increase In World Energy Use By 2040, Declining Role For Coal, Increased Renewables

The US Energy Information Administration last week published figures which project that world energy consumption will increase by 28% between 2015 and 2040, that coal demand will remain flat, and renewable energy will be the world’s fastest-growing energy source.

For outsiders looking in on American politics, it sometimes feels as if the left hand doesn’t know what the right hand is doing — and that nobody knows what the gallbladder is doing, or really why it’s there in the first place. (Author’s note: In this scenario, the gallbladder — “where bile is stored and concentrated before it is released” – Wikipedia — refers to US President Donald Trump, just in case it wasn’t clear.) There has obviously been a lot of vitriol and lies spouted by the US President and many of his cronies against renewable energy and in favor of coal. However, it seems that not everyone currently serving in the US Government agrees with the top-down view of renewables and coal.

The US Energy Information Administration (EIA) published its latest International Energy Outlook 2017 (IEO2017) report last week — not necessarily out of the ordinary, in and of itself, but the key findings were definitely interesting — accurate, in line with all current evidence, but nevertheless interesting and surprising.

Specifically, the EIA projects that world energy consumption is going to grow by 28% between 2015 and 2040, with most of that growth stemming from countries outside the Organization for Economic Cooperation and Development (OECD). The EIA predicts that nonOECD Asia — which includes China and India — will drive more than 60% of the world’s total increase in energy consumption during the projected period.

The IEO2017 also concluded that there will be widespread consumption of marketed energy from all fuel sources except for coal, which the EIA predicts will remain essentially flat across the projected period.

More importantly, however, the EIA predicts that “Renewables are expected to be the fastest-growing energy source” across the projected period, with consumption increasing on average by 2.3% per year between 2015 and 2040. Nuclear energy is expected to be the second fastest-growing source, with an average increase of 1.5% per year.

Of course, renewable energy has a long way to go to catch up in terms of sheer overall capacity, and even though it will grow the fastest, fossil fuels will nevertheless account for more than three-quarters of all world energy consumption through 2040. Thankfully, to search desperately for a silver lining out of this, natural gas will be the fastest-growing fossil fuel during the forecast period, growing on average 1.4% per year — the silver lining being that natural gas has a lower carbon intensity than coal.

The most important takeaway from the IEO2017 report was the EIA’s prediction that global coal use will remain flat over the next 20 years — thanks to it being increasingly replaced by natural gas and renewable energy. Further, the EIA predicts that demand for coal in industrial processes is also expected to slow, further hampering the coal industry’s ability to rebound.

In terms of coal consumption, China’s use of coal — always the coutry most often put under the microscope — is expected to decrease by 0.6% per year, matched in OECD countries. Overall, coal’s share of global energy consumption is expected to decline from 27% in 2015 to 22% in 2040.