Tag Archives: IEA World Energy Outlook

IEA world energy outlook 2014

By 2040 three quarters of our energy will still come from fossil fuels, with global energy demand increasing by 37% and emissions increasing by 20%, according to the IEA world energy outlook 2014. IEA Chief Economist Fatih Birol:

The International Energy Agency estimates the planet is on track to warm by 3.6 degrees Celsius. Investment in renewables needs to quadruple to an average of $1.6 trillion every year through 2040 to meet the 2-degree target.

Taking the world’s CO2 budget to limit warming to 2°C as 2,300 Gt of CO2 from 1900, we have 1,000 Gt left from 2014, and are set to use all of it by 2040:

CO2 budget_dropped

Overall energy demand is set to grow by 1% pa, about half the growth experienced in recent decades. Demand is flat in the OECD, slowing in China, but growing vigorously in the rest of the world:


By 2040, the world’s energy supply mix will divide into four almost-equal parts: oil, gas, coal and low-carbon sources, including renewables, hydro and nuclear. Growth in oil and coal will taper to nothing, but gas will grow vigorously, with demand increasing by 50% by 2040.


World oil supply rises to 104 million barrels per day (mb/d) in 2040, but hinges critically on investments in the Middle East. As tight oil output in the United States levels off, and non-OPEC supply falls back in the 2020s, the Middle East becomes the major source of supply growth. Growth in world oil demand slows to a near halt by 2040: demand in many of today’s largest consumers either already being in long-term decline by 2040 (the United States, European Union and Japan) or having essentially reached a plateau (China, Russia and Brazil). China overtakes the United States as the largest oil consumer around 2030 but, as its demand growth slows, India emerges as a key driver of growth, as do sub-Saharan Africa, the Middle East and Southeast Asia.

The changes in supply are shown graphically below:


Concern is expressed that ISIS is deterring investment in production in Iraq.

Oil prices are likely to rebound, averaging $82.50 a barrel in 2015 and rising to near $100 in the coming years.


Global coal demand will grow by 15% to 2040, but almost two-thirds of the increase will occur over the next 10 years.

Chinese coal demand plateaus at just over 50% of global consumption, before falling back after 2030. Demand declines in the OECD, including the United States, where coal use for electricity generation plunges by more than one-third. India overtakes the United States as the world’s second-biggest coal consumer before 2020, and soon after surpasses China as the largest importer.

Australia will pass Indonesia to once again become the largest exporter by 2030.

The graph shows the importance of China in the global market:


The graph also highlights the folly of India and developing countries polluting their way to prosperity.


The key uncertainty – outside North America – is whether gas can be made available at prices that are attractive to consumers while still offering incentives for the necessary large capital-intensive investments in gas supply; this is an issue of domestic regulation in many of the emerging non-OECD markets, notably in India and across the Middle East, as well as a concern in international trade.

If these uncertainties are met the world gas market will be transformed with Australia a major beneficiary:


60% of gas will be ‘unconventional’, meaning shale and coal seam.

There is uncertainty about the $900 billion per year in upstream oil and gas development needed by the 2030s to meet projected demand.


The IEA sees global nuclear power capacity increasing by almost 60%. However, its share of global electricity generation will rise by just one percentage point to 12%.

Some 38% of existing capacity will be retired. Once again the importance of China is seen in this graph of the changes in capacity of the key players:



Renewables will account for almost half of the increase in total electricity generation to 2040.

The share of renewables in power generation increases most in OECD countries, reaching 37%, and their growth is equivalent to the entire net increase in OECD electricity supply. However, generation from renewables grows more than twice as much in non-OECD countries, led by China, India, Latin America and Africa. Globally, wind power accounts for the largest share of growth in renewables-based generation (34%), followed by hydropower (30%) and solar technologies (18%).

Global subsidies amount to $120 billion compared to $550 billion for fossil fuels.

The growth in hydropower is an ecological concern.

Paris and prices

The Executive Summary leads with a statement about the uncertainty of energy futures in very troubled times, so the IEA forecasts must be seen in this light. The IEA is urging strong intervention by decision makers in the UNFCCC conference in Paris in December, to avoid a climate catastrophe. They call it the last chance. Worth noting here is that the 2011 World Energy Outlook found that all new power supply built after 2017 would need to be zero carbon.

I’m not sure the IEA is fully aware of how cheap renewable technologies are becoming, and how disruptive these technologies will be. Nevertheless their mainstream future, dubbed the “central scenario”, already has renewables comprising about half of new capacity. The changing pattern in power supply is captured as follows:

Power capacity by source_cropped_600

Clearly we are relying too much on gas and coal for new supply, and we need to retire more dirty power, especially brown coal.


Unfortunately one can’t read the full report without buying it so I’ve had to make do with links, mostly from this page. The Executive Summary provides the story in words, the pictures all come from the London presentation.

See also Peter Hannam at the SMH, my 2011 post on the 2011 report and Climate clippings 103, Item 4 for a brief treatment of World Energy Investment Outlook 2014.

Also relevant is Mark Diesendorf’s plan for 100% renewable energy in Australia.

BP’s vision

Finally, BP has taken a look at the future. What they find is not dissimilar to the IEA, just heading down the crapper a bit faster. They see global energy consumption in 2035 as 37% greater than now and CO2 emissions 25% more. They see a clear role for themselves to make a buck while cooking the planet.

The folly of Galilee basin coal

In Climate clippings 115 I cited an article from The Conversation which suggested that Australia’s coal and gas exports are being left stranded.

Just four countries account for 80% of Australia’s fossil fuel exports – China, Japan, Korea and India.

China is on the verge of “peak coal”, rebalancing the economy away from energy intensive industry and introducing a national emissions trading scheme.

Japan is on an energy efficiency drive to reduce its fuel import bill.

Korea has introduced a tax on coal of AU$18 per tonne and is finalising an emissions trading scheme.

India has doubled its tax on coal which funds renewable energy projects and has signalled its intention to stop importing coal within 2-3 years.

Yet the Queensland Government has signed off on a $16 billion development of a huge Galilee Basin mine and is prepared to chip in with a few hundred million to enable the infrastructure to be built.

Premier Campbell Newman said that “the State Government would work with resource companies to make strategic investments that could create up to 28,000 new Queensland jobs.”

At the same time the Queensland Government has introduced water reform legislation which seems squarely targeted at providing unlimited water to the Galilee Basin mining operation. This is being done in a reckless manner at the possible expense of graziers and towns in the area. Indeed careless disregard is being shown for the integrity of the Great Artesian Basin itself.

Tristan Edis at Climate Spectator has taken a look at the folly of official of the official Bureau of Resource and Energy Economics forecasts on fossil fuel energy production. Edis looks at the Australian Energy White Paper, a paper from BZE (Beyond Zero Emissions) entitled A fossil economy in a changing world and the IEA World Energy Outlook 2014. I recommend reading Edis’s article in full but two graphs tell much of the story. First the Australian Energy White Paper fossil energy production projection:


That is the glorious future envisioned by our Tea Party governments in Canberra and Brisbane. Here they are being mugged by reality. The dotted line represents the improved cost of coal production. The continuous line represents the price trajectory:


I would just point out that the author of the BZE report and the article from The Conversation linked at the top of the post is Stephen Bygrave, who is CEO of Beyond Zero Emissions and Adjunct Professor in the Faculty of Science at UNSW Australia.

Finally John Quiggin at The Conversation takes a look at the economic case for fossil fuel divestment. As he says at his blog, the bottom line is:

Leaving aside the ethics of divestment and pursuing a purely rational economic analysis, the cold hard numbers of putting money into fossil fuels don’t look good.

Unless universities are willing to bet on the destruction of the planet they have committed themselves to understanding and preserving, divestment from fossil fuels is the only choice they can make. Forward-thinking investors of all kinds would be wise to follow suit.

In blunt terms we are dealing with stranded assets here. Beyond that Abbott, Newman and their acolytes should be arrested for treason. Or something!

I’m wondering too whether Clive Palmer’s Galilee Basin holdings will prick his financial bubble.

Climate clippings 60: 2011 review edition

The year in review

For me the year began with the post Climate crunch: the fierce urgency of now, wherein we were reminded that the time for significant action on climate change was now and that postponing such action would make things quite a lot harder.

This message was reinforced by the Climate Commission’s report The Critical Decade with the following message:

“This decade is critical. Unless effective action is taken, the global climate may be so irreversibly altered we will struggle to maintain our present way of life.” “Without strong and rapid action there is a significant risk that climate change will undermine our society’s prosperity, health, stability and way of life.

Continue reading Climate clippings 60: 2011 review edition

IEA and the energy crunch of 2017

The International Energy Association’s (IEA) World energy Outlook 2011 had only just hit the deck when it generated a political stoush, this time between Labor and The Greens.

Greens deputy leader Christine Milne told The Age the report showed that there was no longer time to use gas – which is a cleaner-burning fuel than coal – as a stepping stone to renewable energy such as wind, solar and geothermal. ”[The outlook] is basically saying to the investment community, ‘You are going to be gambling on how long gas has got as any kind of transitional fuel’.”

However, Mr Ferguson told The Age: ”The flexibility of gas-fired technology and the fact it is the cleanest fossil fuel make it an attractive investment option.

”In addition to gas, the message I am getting firsthand out of China and India … is that coal-fired power will increase and Australia is well placed to supply coal to fuel their growing economies.”

I picked that one up in Queensland Country Life, a Fairfax paper in which they reprint articles from The Age and the SMH.

But who’s right?

Not Christine Milne, I’m afraid. She has her eye on the IEA’s 450 Scenario, but even here we find this in the IEA Factsheet:

The share of fossil fuels in the global energy mix falls from 81% in 2009 to 62% in 2035. Global demand for both coal and oil peak before 2020, and then decline by 30% and 8% respectively by 2035, relative to their 2009 levels. By contrast, natural gas demand grows by 26%, though it plateaus by around 2030.

Ferguson has his eye on what the world is actually doing.

In the Current Policies Scenario, demand [for coal] carries on rising after 2020, increasing overall by nearly two-thirds to 2035. But in the 450 Scenario, coal demand peaks before 2020 and then falls heavily, declining one-third between 2009 and 2035.

Under the New Policies Scenario (see below) coal increases to the early 2020s and then remains broadly flat. Nevertheless the increase in 2035 over 2009 is a healthy one quarter.

I’ll outline some basic concepts first, then link to some sources, followed by some discussion. Continue reading IEA and the energy crunch of 2017