IEA’s World Energy Outlook 2016 Released, Main Scenario Sees Renewables Making Up 60% of New Power Gen Through 2040

The International Energy Agency just released its long-term, World Energy Outlook 2016, and overall it’s very bullish on clean energy. Some of the key findings of the report include:

      • The world needs to a clean energy transition to meet climate goals; these changes are underway. “Transformative change in the energy sector, the source of at least two-thirds of greenhouse-gas emissions, is essential to reach the objectives of the [Paris Climate] Agreement.” Fortunately, these changes are “already underway in the energy sector, demonstrating the promise and potential of low-carbon energy.”
      • Carbon Dioxide emissions growth has stalled. “Growth in energy-related CO2 emissions stalled completely in 2015. This was mainly due to a 1.8% improvement in the energy intensity of the global economy, a trend bolstered by gains in energy efficiency, as well as the expanded use of cleaner energy sources worldwide, mostly renewables.”
      • Fossil fuel subsidies are falling. “The value of fossil-fuel consumption subsidies dropped in 2015 to $325 billion, from almost $500 billion the previous year, reflecting lower fossil-fuel prices but also a subsidy reform process that has gathered momentum in several countries.”
      • Through 2040, renewable energy is expected to see “by far the fastest growth,” followed by natural gas, as growth in coal use “essentially grinds to a halt.”
      • Massive shifts in investment flows will be needed. “A cumulative $44 trillion in investment is needed in global energy supply in our main scenario, 60% of which goes to oil, gas and coal extraction and supply, including power plants using these fuels, and nearly 20% to renewable energies. An extra $23 trillion is required for improvements in energy efficiency.”
      • China moves off of coal, as does India. “Almost all the growth in China’s power generation comes from sources other than coal, whose share in the power mix falls from almost three-quarters today to less than 45% in 2040…In India, coal’s share in the power mix drops from 75% to 55% over the period to 2040, a major shift in a country that sees electricity demand more than triple.”
      • Electric cars reach 150 million by 2040. “The worldwide stock of electric cars reached 1.3 million in 2015, a near-doubling on 2014 levels. In our main scenario, this figure rises to more than 30 million by 2025 and exceeds 150 million in 2040, reducing 2040 oil demand by around 1.3 mb/d. Although battery costs continue to fall, supportive policies – which are far from universal for the moment – are still critical to encourage more consumers to choose electric over conventional vehicles.”
      • Unsubsidized renewables increasingly competitive. “[I]n our main scenario comes from renewables and, by 2040, the majority of renewables-based generation is competitive without any subsidies.”
      • Clean energy could hit 60% of power generation by 2040. “In the 450 Scenario, nearly 60% of the power generated in 2040 is projected to come from renewables, almost half of this from wind and solar PV.”
      • Changes to power system required. “Structural changes to the design and operation of the power system are needed to ensure adequate incentives for investment and to integrate high shares of variable wind and solar power.”
      • In “450 Scenario,” only natural gas grows among fossil fuels. “While all fossil fuels see continued growth in our main scenario, by 2040 oil demand returns to the levels of the late 1990s in the 450 Scenario, at under 75 mb/d; coal use falls back to levels last seen in the mid-1980s, at under 3 000 million tonnes of coal equivalent per year; only gas sees an increase relative to today’s consumption level.”
      • Coal use plummets in Europe and the U.S. “Coal demand in the European Union and the United States (which together account for around one-sixth of today’s global coal use) falls by over 60% and 40%, respectively, over the period to 2040.”
      • The water/energy nexus is crucial. “The inter-dependencies between energy and water are set to intensify in the coming years, as the water needs of the energy sector – and the energy needs of the water sector – both rise…Managing energy-water linkages is pivotal to the prospects for successful realisation of a range of development and climate goals.”