World energy consumption is expected to grow by 48% between 2012 and 2040 according to the US Energy Information Administration's (EIA) recently released International Energy Outlook 2016 (IEO2016).
The majority of this growth is anticipated to come from countries that are not in the Organisation for Economic Cooperation and Development (OECD), including countries where demand is driven by strong economic growth, particularly in Asia. Non-OECD Asia, including China and India, accounts for more than half of the world's total increase in energy consumption over the projection period.
According to the EIA, concerns about energy security, effects of fossil fuel emissions on the environment, and sustained, long-term high world oil prices support expanded use of non-fossil renewable energy sources and nuclear power. Renewables and nuclear power are the world's fastest growing energy sources over the projection period. Renewable energy increases by an average 2.6%/yr through 2040; nuclear power increases by 2.3%/yr.
Even though non-fossil fuels are expected to grow faster than fossil fuels (petroleum and other liquid fuels, natural gas and coal), fossil fuels still account for more than three-quarters of world energy consumption through 2040. Natural gas, which has a lower carbon intensity than coal and petroleum, is the fastest-growing fossil fuel in the outlook, with global natural gas consumption increasing by 1.9%/yr. Rising supplies of tight gas, shale gas, and coalbed methane contribute to the increasing consumption of natural gas.
Although liquid fuels – mostly petroleum-based – remain the largest energy source, the liquids share of world marketed energy consumption is projected to fall from 33% in 2012 to 30% in 2040. As oil prices rise in the long term, many energy users adopt more energy-efficient technologies and switch away from liquid fuels when feasible.
Coal is the world's slowest-growing energy source, rising by only 0.6%/yr through 2040. Throughout the projection period, the top three coal-consuming countries are China, the US and India, which together account for more than 70% of world coal consumption. China alone currently accounts for almost half of the world's total coal consumption, but a slowing economy and plans to implement policies to address air pollution and reduce carbon dioxide emissions mean that coal use in China will begin to decline in the later years of the projection period. Coal use in India continues to rise and surpasses US coal consumption after 2030.
Much of the analysis conducted for the IEO2016 was done before the release of the US Environmental Protection Agency's final Clean Power Plan (CPP). For this reason, the IEO2016 Reference case does not include the potential effects of the CPP regulations in the US analysis that shows the potential for significant reductions in US coal consumption and increases in US renewable consumption compared with the Reference case projection. Key tables and figures throughout the report provide results that also include the effects of the CPP where they differ significantly from the IEO2016 Reference case results, based on the EIA's analysis of the preliminary CPP rule.
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