The International Energy Agency has released its 2019 edition of the World Energy Outlook, its “gold standard of energy analysis”, and as usual it is packed with interesting insights and predictions for a complex global energy picture. Three scenarios are modelled:

• A ‘current policies scenario’, which would mean global carbon dioxide-equivalent emissions from energy-related activities of around 42 GT/yr (up from around 33 GT/yr today) by 2040
• A ‘stated policies scenario’, which includes promised policies which have not yet come into being, which would mean emissions of around 36 GT/yr by 2040
• A ‘sustainable development scenario’, which “maps out a way to meet sustainable energy goals in full, requiring rapid and widespread changes across all parts of the energy system”. In this scenario, emissions would fall to around 16 GT/yr by 2040, probably peaking in 2020.

The report states that it will be the actions of governments, as well as the rate at which technology advances, that will determine to which scenario the world’s future reality will be closest. Greatly improved policies around the world will be required to meet the sustainable development scenario. With 62% of the world’s coal fleet under 20 years old (mostly being in Asia), to meet the sustainable development scenario, retrofitting existing plants with carbon capture and storage will be essential, along with repurposing other plants, and retiring a significant proportion of capacity early. The aim of this would be to bring coal’s contribution of around 30% of energy-related carbon dioxide equivalent emissions down to almost zero by 2050. As Fatih Birol, the head of the agency, put it, the world “needs a grand coalition encompassing governments, companies, investors, and everyone who is committed to tackling the climate challenge. In the absence of this, the chances of reaching climate goals will be very slim.”

For the ‘stated policies scenario’, the report sees gas as overtaking coal in having the most installed generation capacity by 2026, being supplanted itself by solar around 2034. (Because of capacity factor considerations, this is unlikely to mean that solar installations produce the most electricity by that time, however.) The report sees a potential for biomethane (produced from organic wastes and residues) to supply as much as 20% of today’s gas demand, and repeats the findings of the IEA’s report from earlier this year that blending low-carbon hydrogen with natural gas would be a way to grow hydrogen as an energy carrier. Both hydrogen and biomethane, the report suggests, would benefit greatly from appropriate carbon pricing.

Meanwhile, oil demand is expected to rise slightly in the short term, and then flatten out, as developing economies in Asia and Africa increase their oil consumption, and long-distance freight, shipping and aviation increases also consume oil, while cars switch to electricity or hydrogen. OPEC’s share of oil production will slowly decrease, ceding ground to the US, though the former will remain highly important.

Electrification will continue, the report projects, though by 2040 it will only have just overtaken oil as the world’s largest energy vector. But increased electrification, along with higher and higher amounts of power generation from renewables, will mean grids will have to be modified to be more flexible. As the summary of the report states, policy makers and regulators “will have to move fast to keep up with the pace of technological change and the rising need for flexible operation of power systems. Issues such as the market design for storage, the interface between electric vehicles and the grid, and data privacy all have the potential to expose consumers to new risks.”

Perhaps the largest need for change the report highlights is in terms of energy and material efficiency. In 2018, the energy intensity of the global economy improved by 1.2%, but this was around only half the rate of previous years, and well below what the IEA calculates as being economically viable – a 3% rate of improvement. Getting to such a rate would be the “single most important element” in achieving the sustainable development scenario. Such improvements would include, for the steel, cement, aluminium and plastics sectors, “the efficient design, use and recycling of materials”, which could be enough to halt emissions increases from those industries (in absolute terms).

The report also reminds readers that almost one billion people in the world today do not enjoy access to electricity.