The latest World Energy Outlook report by the International Energy Agency (IEA) has identified that solar PV, wind power and natural gas will be the clear winners of a revolution that will alter the global energy landscape significantly over the next 25 years.
The IEA’s outlook is based on a detailed analysis of the pledges made for the Paris Agreement on climate change, and concludes that broad transformations in the way the world consumes, sources and supports its energy industries are already underway.
The report stops short of declaring a unanimous victory for renewables, and is at pains to stress that the era of fossil fuels appears far from over as countries take their time in transitioning from centralized, coal-based systems to cleaner, more decentralized energy networks.
However, the IEA adds that the clear energy winners out to 2040 will be wind and solar, which will – alongside natural gas – gradually replace coal as the dominant sources of power generation.
"There is no single story about the future of global energy," stressed IEA executive director Fatih Birol. "In practice, government policies will determine where we go from here." While that may sound ambivalent, the IEA is clear in its belief that renewables can make "very large strides" in the coming decades, with Birol adding: "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."
The report shies away from forecasting any particular growth figures for solar or renewables, with the IEA recently coming in for criticism for low-balling solar’s potential in its last mid-term renewable forecast.
That forecast was accused of heavily underestimating the growth of wind and solar, and despite the IEA publicly revising upwards it projections by 13%, its forecast of 825 GW of renewable capacity added through 2021 is deemed by many industry experts to be far too conservative.
In its latest Outlook, the IEA stats that "the growth in renewables and energy efficiency lessens the call on oil and gas imports in many countries" – an evolution that could aid energy security in a number of regions.
The Outlook expects global oil demand to continue rising out to 2040 chiefly because of a lack of easy alternatives to oil in the heavy haulage, aviation and petrochemicals industries. Passenger car demand for oil is set to contract, however, as the impact of electric vehicles (EVs) is felt.
Perhaps the least surprising takeaway from the IEA’s Outlook is its assessment that coal consumption will flatline over the next 25 years as China’s efforts to tackle pollution and diversify its energy mix – allied to similar progress in India and the U.S. – stunt consumption.