Natural gas, renewable to top energy demand growth by 2040
Experts have said that natural gas and renewable will play a major role in the race to meet energy demand growth by 2040 owing to the major transformations in the global energy system. World Energy Outlook has indicated.
They stated that while investment in oil and gas would relevant and critical to energy development for a long time to come, the growth in renewables and energy efficiency may lessens the call on oil and gas imports in many countries.
According to the report, Fatih Birol, IEA’s executive director observed that in the years leading to 2040, natural gas will stand out as clear winner as energy source while wind and solar will equally replace coal.
“Renewables will make very large strides in coming decades but their gains remain largely confined to electricity generation,” said Birol. “The next frontier for the renewable story is to expand their use in the industrial, building and transportation sectors where enormous potential for growth exists.”
According to the World Energy Outlook report another year of low upstream oil investment would create a significant risk of a shortfall in new conventional supply within a few years.
Doubling of both renewables projects and improvements in energy efficiency over the next 25 years would ensure Natural gas continues to expand its role while the shares of coal and oil fall back.
“Coal consumption would barely grow in the next 25 years, as demand in China starts to fall thanks to efforts to fight air pollution and diversify the fuel mix. The gas market is also changing, with the share of LNG overtaking pipelines and growing to more than half of the global long-distance gas trade, up from a quarter in 2000. In an already well-supplied market, new LNG from Australia, the United States and elsewhere triggers a shift to more competitive markets and changes in contractual terms and pricing”.
The Paris Agreement, which entered into force on 4 November 2016, is a major step forward in the fight against global warming. But meeting more ambitious climate goals will be extremely challenging and require a step change in the pace of decarbonisation and efficiency. Implementing current international pledges will only slow down the projected rise in energy-related carbon emissions from an average of 650 million tonnes per year since 2000 to around 150 million tonnes per year in 2040.
While this is a significant achievement, it is far from enough to avoid the worst impact of climate change as it would only limit the rise in average global temperatures to 2.7°C by 2100. The path to 2°C is tough, but it can be achieved if policies to accelerate further low carbon technologies and energy efficiency are put in place across all sectors.
It would require that carbon emissions peak in the next few years and that the global economy becomes carbon neutral by the end of the century. For example, in the WEO-2016 2°C scenario, the number of electric cars would need to exceed 700 million by 2040, and displace more than 6 million barrels a day of oil demand. Ambitions to further limit temperature gains, beyond 2°C, would require even bigger efforts.
KELECHI EWUZIE with agency report