The world needs power - and a lot more of it. Guy Isherwood, Editor-in-Chief, WorldPower, highlights key findings from the International Energy Agency's WorldEnergy Outlook 1 for power markets.
By Guy Ishwerwood, Editor, WorldPower.
World power energy demand is expected to grow by 1.7% per year from 2000 to 2030 according to the International Energy Agency's (IEA) World Energy Outlook - reaching 15.3 billion tonnes of oil equivalent (Mtoe) - two thirds of current demand. And fossil fuels will account for 90% of this increase. This implies that carbon dioxide emissions will increase by 1.8% per year reaching 38 billion tonnes in 2030 - 70% above current levels and with two thirds coming from developing countries.
Electricity demand will grow faster than any other end-use energy source - by 2.4% per year to 2030 - effectively doubling over the period (with its proportion of final energy consumption demand rising from 18% to 22%).
As a consequence, demand for natural gas as a fuel source of choice will also double between now and 2030, with new power stations taking over 60% of the increase in gas supplies over the next three decades. Most of these stations will use combined-cycle gas turbine technology, favoured for its comparatively high energy conversion efficiency and low capital costs.
Other electricity fuel sources will also grow. Whilst oil consumption will rise about 1.6% per year to 125 mb/d in 2030, three quarters of this demand will come from the transport sector.
Total coal demand, whilst growing more slowly than that for oil and gas, will become increasingly concentrated in power generation where it will remain the dominant fuel. Coal-fired generation currently has a 40% share of electricity output and will increase from 5,989 TWh in 2000 to 11,590 TWh in 2030. China and India alone will account for two thirds of the increase in world coal demand to 2030.
China is the world's largest consumer of coal (28%) which meets 70% of its primary energy requirements (as the second largest energy consumer behind the US). Coal demand will continue to grow at an annual rate of 2.2% reaching 2 billion tonnes by 2030 with most of the increase for power generation.
Similarly, India will become an increasingly important player on the world energy stage. Whilst natural gas could play a much bigger role in its energy mix, coal demand is expected to increase 2.4% per annum (with total energy demand likely to increase at 3.5% per annum). 75% of India's coal demand currently goes to power generation and is expected to increase to 350 Mtoe by 2030, (see page 150 of this edition).
Nuclear power production, whilst increasing slightly over the period, will decline markedly as a share of total generation, say the IEA. With few new reactors scheduled for build and retirement rates accelerating, nuclear production will peak at the end of this decade before declining gradually to account for roughly 5% of primary energy demand by 2030 (from 17% of total world electricity supply today to 9%). Only Asia will see an increase in nuclear output, (see page 164 of this edition).
Thankfully, renewable energy will play an increasing role in the world's primary energy needs. Whilst hydropower has long been a major source of electricity production, its share of electricity generation will fall. Non-hydro renewables are expected to grow faster than any other primary energy source - 3.3% per annum - with wind and biomass growing the most rapidly.
Unfortunately, non-hydro renewables will only make a small contribution to overall global energy demand with the most growth coming from OECD nations that promote this increasingly necessary fuel source.
The developing world will account for 60% of the increase in primary energy demand, particularly Asia. These countries share of world demand will grow from 30% to 43% of total demand to 2030.
As electricity growth will be faster than any other energy source, power generation will contribute almost half the increase in global emissions during the period, principally from coal fired generation. Whilst emissions per unit of electricity are expected to decrease over time, regional differences will remain marked unless power plant efficiency in the developing world is addressed.
Given this outlook, geographical sources of new emissions will shift drastically from the industrialised to the developing world. The developing world's share of emissions will jump from 34% today to nearly 50% by 2030, with China alone contributing one quarter of the increase.
Whilst fuel cell technologies are likely to make a marked contribution to global energy supply, their effects are unlikely to be felt until after the outlook period - and their most immediate effect is likely to be in the transport sector. Similarly, carbon sequestration and storage technologies are not expected to be deployed on a large scale before 2030. But if their costs could be lowered more quickly than most envisage, their impact on energy supply requirements could be substantial.
5,000 GW of generating capacity is expected to be built worldwide by 2030 with almost two thirds of installed capacity built after 2000 - 40% of it gas fired. This equates to projected capacity requirements costing between $4-5 trillion in current dollars. Big increases are expected in the transition economies and developing countries, but it remains uncertain whether these countries will be able to find the capital required to build the infrastructure - including upstream facilities pipelines and LNG terminals to support new gas fired projects.
Last, but not least, without major new international initiatives to combat poverty, 1.4 billion people (18%) of the world's population will be without direct access to electricity by 2030 - exacerbating poverty and contributing to its continuation.
Guy Isherwood is Editor of WorldPower & Commodities Now magazine. If you would like to contact us regarding a possible contribution to the next edition of WorldPower contact: E: gish@commodities-now.com T: + 44 (0) 20 7402 3900 www.commodities-now.com
