Global demand for energy is set to increase 40 percent by 2035, the Paris-based agency said today in its annual World Energy Outlook report. Consumption will rise 1.3 percent a year to 16.96 billion metric tons of oil equivalent in 2035, spurred by China and other emerging economies, the IEA said.
The worst atomic accident in 25 years at the Fukushima plant in Japan on March 11 led Germany, Europe’s biggest economy, to close eight of its 17 reactors permanently. Nuclear plants generate power continuously while emitting virtually no greenhouse gases. Without nuclear, keeping world temperature gains at 2 degrees Celsius (3.6 Fahrenheit) will cost an extra $1.5 trillion through 2035, the IEA said.
“If we do not have an international legally binding agreement soon, and if it doesn’t give a boost to a major investment wave of clean energy technologies by 2017, the door to 2 degrees will be closed forever,” Fatih Birol, the IEA’s chief economist in Paris, said in an interview yesterday. A shift away from nuclear power “would definitely be bad news for energy security, for climate change and also for the economics of the electricity price.”
Investment in energy infrastructure of $1.5 trillion a year is needed to meet projected demand through 2035, and even then, “the cost of energy will increase,” Birol said.
The IEA, which advises 28 industrialized consuming nations, forecast crude prices will climb to $120 a barrel in 2035, or a nominal $212. The surge will coincide with oil demand rising to 99 million barrels a day in 2035 from 87 million last year, the agency said.
The Organization of Petroleum Exporting Countries’ share of global oil output will increase to 51 percent in 2035 from 42 percent last year, according to the IEA.
“More than 90 percent of the growth in oil production in the next two decades needs to come from the Middle East and North African countries,” costing $100 billion of investment a year, Birol said. If spending slips to a third of this level, oil prices could jump to $150 a barrel, the IEA said in the 659- page report.
Global coal demand will advance to 4.1 billion tons of oil equivalent from 3.29 billion tons in 2009, or a 24 percent rise over the forecast period, under the IEA’s base case scenario.
“Prospects for coal are especially sensitive to energy policies, notably in China, which today accounts for almost half of global demand,” the IEA said. “More efficient power plants and carbon capture and storage technology could boost prospects for coal, but the latter still faces significant regulatory, policy and technical barriers.”
Natural gas is the only fossil fuel for which demand rises under all three of the IEA’s scenarios, increasing its demand forecast by as much as 5.1 trillion cubic meters a year by 2035 from about 3.1 trillion in 2009.
The use of nuclear energy will increase to 1.2 billion tons of oil equivalent by 2035, or 72 percent, from 703 million tons in 2009, the IEA said.
Renewable energies, excluding hydro power, are projected to account for 15 percent of power generation in 2035 from 3 percent in 2009, the IEA said. The use of renewables will be backed by a five-fold increase in subsidies to $180 billion, driven largely by China and the European Union.
“Global energy demand is set to continue its increase,” IEA Executive Director Maria van der Hoeven said at a press conference in London today. “But this continued heavy reliance on fossil fuels puts the health of the climate in jeopardy.”