International Energy Agency report says China will dominate
energy demand in Asia till 2020, before India takes over as principal
engine of growth
The latest report released by the
International Energy Agency (IEA), which focuses on the new trends in
the global energy market, says that renewable energy will account for
nearly half of the increase in
global power generation in 2035, with
variable sources – wind and solar photovoltaics – making up 45 per cent
of the expansion in renewables.
The annual report, World Energy Outlook 2013 (WEO-2013), was released
last week in London. World Energy Outlook provides an annual assessment
of the developments in global energy markets and analyses the energy
and climate trends in the future.
This year the report focuses on how new technological advances are
opening up unexplored oil reserves, especially in the United States and
Brazil. This has led to reduced dependency on Organization of the
Petroleum Exporting Countries (OPEC) for world’s oil supply. But West
Asia is still the only large source of low-cost oil.
Asian giants
The report also says the majority of world’s energy demand in the
future (IEA scenario 2035) would lie with the emerging economies like
China, India and West Asia. “Major changes are emerging in the energy
world in response to shifts in economic growth, efforts at
decarbonisation and technological breakthroughs,” said IEA executive
director Maria van der Hoeven.
Source: IEA – WEO2013 Presentation * Mtoe--million tonnes of oil equivalent
As per the central scenario of WEO-2013, China will dominate energy
demand within Asia, before India takes over from 2020 as the principal
engine of growth. It reports that India would become the largest
importer of coal by the early 2020s. It will also be the largest single
source of global oil demand growth after 2020. It also shows that Indian
electricity demand would increase by 13 per cent by 2035.
US' shale gas boom
WEO 2013 says that by 2035, US will be able to meet all of its energy
needs from domestic resources because of unconventional technologies
like fracking. It notes that the net North American requirement for
crude imports all but disappears by 2035 and the region becomes a larger
exporter of oil products.
US shale gas boom has brought forth large differences in regional
energy prices. Natural gas in the United States still trades at
one-third of import prices to Europe and one-fifth of those to Japan.
These variations are bound to have enormous impact on industrial
competitiveness, influencing investment decisions and company
strategies. “Lower energy prices in the United States mean that it is
well-placed to reap an economic advantage, while higher costs for
energy-intensive industries in Europe and Japan are set to be a heavy
burden,” said IEA chief economist, Faith Birol.
Decarbonisation trends
On the climate change front, the energy sector will be pivotal in
determining whether or not climate change goals are achieved since this
sector alone is responsible for two-thirds of global greenhouse-gas
emissions. Major improvements made in the direction are the renewed
focus on energy efficiency and renewable energy sector.
Source: IEA – WEO2013 Presentation
It forecasts that power generation from renewables will account for
more than 30 per cent share in the global power mix ahead of natural gas
in the next few years and falling a little short of coal as the leading
fuel for power generation in 2035.
The report presents the fact that the transition to a more efficient,
low-carbon energy sector is more difficult in tough economic times, but
no less urgent. Coal remains a cheaper option than gas for generating
electricity in many regions, but policy interventions to improve
efficiency, curtail local air pollution and mitigate climate change will
be critical in determining its longer-term prospects. The flexibility
and environmental benefits of natural gas compared with other fossil
fuels put it in a position to prosper over the longer term.
