“Unprecedented efficiencies” created by new technologies and more stringent energy policies will make per capita energy demand peak before 2030, according to projections by the World Energy Council (WEC). The “phenomenal rise of solar and wind energy” is seen to continue, while coal and oil will gradually fade out of the energy mix.
Cleaner energy sources are seen instrumental as overall demand for electricity is set to double by 2060 – driven by urbanisation, rising incomes and the growth of the middle class. In contrast, the fossil fuel share of primary energy could fall by up to 70%.
Investment in power generation assets to 2060 would need to come forward in the range of $ 35-43 trillion, WEC said but cautioned that more stringent carbon emissions rules are likely to promote integrated models and funding mechanisms to better allocate the system costs of renewables.
Wind and solar energy set to compete on cost
Anticipating a continued “phenomenal rise” in renewable energy deployment, analysts refer to the potential of cost reductions greater than 70% for the forecast period. A steep technology learning curve has already seen the cost of wind and solar PV plummet – making the technology increasingly competitive with fossil power.
By 2060, solar and wind energy are forecast to account for 20% to 39% of global power generation - the largest additions are expected in China, India, Europe, and North America. Hence, large-scale pumped hydro and compressed air storage, battery innovation, and grid integration will be needed to provide dependable capacity to balance intermittency.
Nuclear and hydro - the other two non-fossil fuel power sources - will also continue to grow. Hydro is seen as particularly important in Africa and nuclear in East Asia, notably in China.
Peak coal dependent on China, India
The future hunger for coal power in China and India is the biggest source of uncertainty about when demand for coal is set to peak. Falling cost for renewables and emergence of viable energy storage technologies could drive down the share of fossil fuels in primary energy to 70% by 2060.
Much uncertainty surrounds that forecasts of the rate of natural gas growth. Unconventional gas production helps keep a lid on prices, but lower gas trade and reduced technology transfer are likely to make resources more expensive. Analysts also warn that stringent emissions mandates mean gas grows more slowly. In the not too distant future, gas-fired power generation might well loose its green energy credentials.