Despite this, coal will continue to be the dominant source of power as the world’s energy needs grow by a third by 2035.
This prediction comes from the International Energy Agency (IEA) in the 2013 edition of its annual report, “World Energy Outlook”, which covers the expected development of the energy market over the next twenty years.
Today’s share of fossil fuels in total energy production is 82 per cent, and renewable energy sources will reduce that figure to 76 per cent by 2035, according to this report compiled by experts from the member countries of the OECD. It forms an important basis for decision-makers and politicians.
“The content of the annual report forms an important basis for the ongoing energy debate,” says Bo Nelson, analyst at Vattenfall.
So what is highlighted in this year’s report?
“The world’s economic centre of gravity is shifting from the West to Asia while the conditions for both energy production and use are changing. By extracting shale gas with fracking technology, the USA has gained access to new, cheap energy, giving a boost to its industry. However, the expectations on fracking have been downgraded in this year’s report.”
“It has proved to be more difficult than expected to copy the technology in other parts of the world, and the shale gas boom could decline in importance over the next 20 years,” says Bo Nelson.
The increased production, trade and consumption of energy by giants China and India is shifting the geopolitical balance, and this has great significance for developments in Europe over the next few years. Europe has ambitious environmental targets, which are expensive and impact competitive conditions. Europe’s energy-intensive industries could take a beating in relation to the rest of the world, a situation that also affects energy producers in Europe.
“The IEA also suggests how the situation may be evened out,” says Bo Nelson.
That includes increasing energy efficiency: if energy is better utilised, production costs will also be lower. Another aim is to harmonise the world around common international climate targets.
“It will no longer pay to move production to other parts of the world with less ambitious climate legislation,” says Bo Nelson.
The IEA’s future scenario is based on conditions that exist today and on decisions that are currently being made.
The IEA also outlines what is needed for the world to achieve the avowed climate aim of ensuring that global warming does not exceed two degrees.
World Energy Outlook