Global energy demand is growing: by 2040, the International Energy Agency estimates a 30 per cent increase in consumption. The end of oil is still far off, but renewables will meet 40 per cent of world demand.
The world of energy is undergoing changes that are profoundly transforming it. Four factors will characterise the transformation over the coming decades: growth in electricity production from renewable sources, an increase in electricity consumption within energy demand (also thanks to the electrification of transport), a shift in China's energy model, and oil which continues to remain – alongside gas – a pillar of the global energy system. These four key points are identified by the International Energy Agency (IEA) in its latest report, the World Energy Outlook 2017, which maps out the trajectory of global energy demand and production and attempts to calculate possible development scenarios.
According to the IEA, we are witnessing a rapid spread of clean technologies whose costs are in constant (and will continue to be in) decline. In 2016, solar photovoltaics grew more than any other form of generation. Since 2010, the costs of solar photovoltaics have fallen by 70 per cent, those of wind by 25 per cent, and those of clean energy storage using batteries by 40 per cent. A direct consequence of this trend is the second point highlighted by the IEA report: electricity is increasingly widespread and used, a tendency that will strengthen in the future. In 2016, consumer spending on electricity came close to spending on petroleum products.
In the world of energy, the transformations under way are also the result of how the largest powers in economic and demographic terms are growing. The IEA highlights in particular the transformation of China: within the country's economy, services are taking on ever greater weight, with a consequent reduction in heavy industry. In energy terms, for an economy that is hungrier for energy than any other in the world and must manage the issues linked to poor air quality, China's new policy is translating into a cleaner energy mix.
The American approach is different: despite the policies of many states and of the US Department of Energy in favour of renewables, the United States will instead consolidate its position as the world's largest producer of oil and gas — a position maintained through the extraction of shale gas and tight oil placed on the market at prices lower than those of conventional gas and oil, and with all the related problems for the environment and local communities.
By 2040 renewable energy sources will meet 40 per cent of energy demand and their growth is already today marking the end of the coal boom years. Among renewables, solar energy will become the cheapest source for generating electricity, especially in China and India, while in Europe the IEA expects an explosion in wind power which, after 2030 and thanks to combined growth in onshore and offshore capacity, should become the main source of electricity in the Union in an energy mix where renewables should rise to 80 per cent.
According to the International Energy Agency's projections, over the next 25 years global energy demand will grow by around 30 per cent. To meet it, recourse will be made primarily to renewables and natural gas, thanks to the lower costs that these sources will require to deploy. But it is still too early to bid a definitive farewell to fossil fuels. The increase in the availability of low-cost oil brought about by the United States will ensure that this source continues to be used primarily for petrochemical production, heavy transport and aviation. The IEA expects oil demand to keep growing until 2020, even if efficiency gains and the growth of electric cars will mitigate that expansion.