The U.S. Energy Information Administration (EIA) has just released its International Energy Outlook 2016 (IEO2016). IEO2016 projects that world energy consumption will increase by 48% between 2012 and 2040. China and India are expected to account for more than half of the world's total increase in energy consumption over the projection period.
In the IEO2016 Reference case, world net electricity generation is projected to increase 69% by 2040, from 21.6 trillion kilowatthours (kWh) in 2012 to 25.8 trillion kWh in 2020 and 36.5 trillion kWh in 2040. Electricity is projected to continue to be the world’s fastest-growing form of end-use energy consumption. In 2012, electricity generation in non-OECD countries was about one-half of world electricity demand. The non-OECD share of world electricity generation is projected to double to reach 61% of global electricity demand by 2040.
The IEO2016 Reference case analysis incorporates revised regulations and national energy policies that affect renewable energy including China’s target of 15% renewable electricity by 2020, the European Union’s 2030 Energy Framework objectives, and India’s megawatts-to-gigawatts renewable energy commitment.. The effect of the Environmental Protection Agency's (EPA) Clean Power Plan (CPP) regulations in the United States is not included in the IEO2016 Reference case.
The IEO2016 Reference case also includes the impacts of broader policies to constrain energy-related carbon dioxide (CO2) emissions such as the Intended Nationally Determined Contributions (INDCs) for addressing CO2 emissions reductions as part of the 21st Conference of Parties (COP21) meetings. Where the objective is clear but specific policy mechanisms are not yet known, judgment was applied to determine the likelihood that the intended outcomes would be achieved.
The IEO2016 Reference case assumes that economic activity will continue to drive electricity demand growth, but economic growth is projected to continue to decouple from electric power generation. From 2005 to 2012, world GDP increased by 3.7%/year, while world net electricity generation rose by 3.2%/year. In the IEO2016 Reference case, from 2012 to 2040 world GDP is projected to grow by 3.3%/year, while world net electricity generation is expected to increase by only 1.9%/year. The estimated 69% increase in world electricity generation through 2040 is projected to produce much greater economic growth per unit of electric power than in the past.
Renewables are projected to be the fastest-growing source of energy for electricity generation increasing by 2.9% per annum from 2012 to 2040. Natural gas and nuclear power are the next fastest-growing sources of electricity generation, increasing by 2.7%/year and 2.4%/year, respectively. Over the projection period coal-fired generation is projected to continue to increase but by only 0.8%/year. By 2040 renewable generation (including hydropower resources) is projected to become the world’s largest source of energy for electricity generation.
Non-OECD Asia remains the fastest-growing region in the world, with projected GDP growth of 4.7%/year through 2040.
China remains one of the world's fastest-growing economies in the IEO2016 Reference case. Its total net electricity generation is expected to double from 4.8 trillion kWh in 2012 to 9.4 trillion kWh in 2040, at an average annual growth rate of 2.5%. In June 2015, China outlined the specific steps needed to achieve a decline in its CO2 emissions beginning in 2030. The government’s INDC policy includes the following energy-related targets for China:
- Lower carbon intensity (CO2 per unit of GDP) by 60% to 65% compared with 2005 levels
- Increase the share of non-fossil fuels in the primary energy mix to approximately 20%
India has one of the fastest-growing electricity sectors in the world. Between 2005 and 2012, India’s net electricity generation increased by an average 6.6%/year. In the IEO2016 Reference case, net electricity generation in India is projected to more than double from 1,052 billion kWh in 2012 to 2,769 billion kWh in 2040; at 3.5%/year. This is the fastest growth of any IEO2016 region over the projection period.
India also is also concerned about the environmental effects of rapid development. In October 2015, India issued an Intended Nationally Determined Contribution which set the national goals for emissions reduction.
- Reduce CO2 emissions intensity by 33% to 35% from 2005 levels by 2030
- Nearly triple renewable energy capacity from 2012 levels by 2022
- Increase the share of zero-carbon electricity generating capacity to 40% of the total by 2030
In March 2015, the United States submitted its Intended Nationally Determined Contribution (INDC) for GHG emissions reduction to the United Nations Framework Convention on Climate Change.
- Emissions reduction of 26% to 28% below 2005 levels by 2025
The U.S. Environmental Protection Agency (EPA) published the final version of the U.S. Clean Power Plan rule in August 2015. The effect of that rule was not included in the baseline for U.S. projections in IEO2016 because of the timing of its release.
From 2012 2040 the energy intensity of economic output is projected to drop in all regions. In the non-OECD countries, energy intensity of output is expected to decrease by 2.2%/year, compared with a decrease of 1.4%/year in OECD countries.
Carbon intensity of energy supply is also projected to decline in all IEO2016 regions. The decrease in carbon intensity for non-OECD countries 0.5%/year is projected to be slightly larger than the decrease for OECD countries 0.3%/year. With the effects of the U.S. CPP included, the rate of decline in carbon intensity for OECD countries us estimated to be 0.4%/year.
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