The International Energy Outlook 2016 (IEO2016) recently released by the US Energy Information Agency (EIA) projects that world energy consumption will rise from 549 quadrillion BTU in 2012 to 815 quadrillion BTU in 2040, an increase of approximately 48%.
The document makes clear that economic growth and population growth are the key determinants of growth of energy demand. In that regard, it is worth noting that the IEA assumes that the world’s GDP will more than double during the next 25 years, growing at an average annual rate of 3.2%. The EIA’s economic growth assumptions are generally in line with recent IMF and World Bank projections.
Renewable energy is expected to be the fastest-growing energy source, increasing by 2.6% per year through 2040, followed by nuclear energy which increases at an average annual rate of 2.3%. Unfortunately, fossil fuel use also increases during this time period. Natural gas consumption is projected to increases at an annual rate of 1.9%. Petroleum and other liquid fuels consumption increases from 90 million barrels per day in 2012 to 121 billion barrels per day in 2040, an average annual increase of approximately 1.1% per year. Coal consumption also continues to increase, albeit at a slower rate of 0.6% per year. The net effect is that fossil fuels will still account for 78% of energy use in 2040.
Because of the increase in fossil fuel use, world energy-related CO2 emissions are expected to rise from 32.2 billion metric tons in 2012 to 43.2 billion metric tons in 2040 – an increase of 34% over the reference period. Continue reading