POWER January 2011 - 9

IEA: Global Power Demand to Surge 2.2%
Annually Through 2035
Though electricity generation has entered a key period of
transition-as investment shifts to low-carbon technologies-world
electricity demand is set to grow faster than any
other " final form of energy, " the International Energy Agency
(IEA) says in its latest annual World Energy Outlook.
Under the central scenario in the report-the so-called New
Policies Scenario, which takes into account broad policy commitments
and plans that have been announced by countries
around the world-world power demand will shoot up 2.2%
per year between 2008 and 2035, from 16,189 TWh to about
30,300 TWh. More than 80% of that growth will come from
developing countries-led by China and followed by India-
spurred by economic activity, industrial production, population,
and urbanization, the intergovernmental organization
that acts as energy policy advisor to 28 member countries
said at the 738-page report's launch in November.
According to the IEA, China overtook the U.S. in 2009 as
the world's largest energy user. The organization says the
country's energy demand is foreseen to surge a stunning 75%
between 2008 and 2035, when it will account for 22% of
world demand. China will lead the surge in electricity generation
growth, and power demand in the country is expected to
triple between 2008 and 2035. To put this into perspective,
the IEA says, " Over the next 15 years, China is projected
to add generating capacity equivalent to the current total
installed capacity of the U.S. " Factoring in China's contribution,
globally, gross capacity additions (to replace obso1.
Coal to remain king. The International Energy Agency (IEA)
forecast in its newly released World Energy Outlook that coal will remain
dominant worldwide through 2035, though its use for power
generation will diminish from 41% now to 32%-putting it on par with
the global share of renewable generation in 2035. This graph shows
how the drop in coal-fired generation in developed countries (members
of the Organisation for Economic Co-operation and Development
[OECD]) is expected to be more than offset by massive increases
elsewhere-especially in China. Worldwide coal-fired generation is
projected to increase from 8,273 TWh in 2008 to about 11,200 TWh
by 2035. China could add nearly 600 GW of coal-fired capacity, which
exceeds the combined current coal capacity of the U.S., the European
Union, and Japan. Courtesy: IEA
China
12,000
10,000
8,000
6,000
4,000
2,000
Note: OECD = Organisation for Economic Co-operation and Development
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
8
India
Other non-OECD
OECD
lete capacity and meet demand growth) will amount to about
5,900 GW through 2035. That's 25% more than total current
installed capacity. Nearly half of the 5,900 GW will be added
by 2020, the IEA says.
Power generation is expected to swell by 75%, rising from
20,183 TWh in 2008 to 27,400 TWh in 2020, and 35,300 TWh
in 2035. Fossil fuels-mainly coal and natural gas-are expected
to remain dominant, but owing to higher fossil fuel
prices and government policies to enhance energy security
while curbing carbon emissions, their share of total generation
drops from 68% in 2008 to 55% in 2035. " Rising fossil
fuel prices to end users, resulting from upward price pressures
on international markets and increasingly onerous carbon
penalties, together with policies to encourage energy savings
and switching to low-carbon energy sources, help restrain
demand for all three fossil fuels, " the IEA asserts.
Globally, coal will remain king though 2035, though its
use for power generation will diminish from 41% now to 32%
(Figure 1). Natural gas use will grow in absolute terms, continuing
to fuel 21% of world electricity generation through
2035. Growth in natural gas will far surpass the growth in
other fossil fuels' use, owing to its " more favorable and practical
attributes, and constraints on how quickly low-carbon
energy technologies can be deployed, " the agency said.
Nuclear power is also expected to see a spurt, growing
from 6% in 2008 to 8% in 2035. More than 360 GW of new
additions-40% in China alone-and extended lifetimes for
several plants worldwide will contribute to the rise in nuclear
capacity.
Above all, renewable energy-hydro, wind, solar, geothermal,
" modern " biomass, and marine energy-is expected to
skyrocket. The IEA sees the general use of renewable energy
tripling through 2035 and demand (compared to other fuels)
for energy produced from renewables such as wind, solar, geothermal,
marine, modern biomass, and hydro increasing from
7% to 14%.
One dramatic assertion is that the share of renewables
used to generate global electricity is forecast to increase
from 19% in 2008 to almost 33% by 2035, which means
renewables could catch up with coal. The increase will come
mostly from wind and hydropower. Output from solar photovoltaics
is also expected to increase " very rapidly, " though
the IEA admits that its share of global generation will reach
only 2% in 2035.
One reason that renewables will see such a surge is because
governments will massively increase subsidies. The IEA says:
" We estimate that government support for both electricity
from renewables and for biofuels totaled $57 billion in 2009,
of which $37 billion was for the former. In the New Policies
Scenario, total support grows to $205 billion. . . . Between
2010 and 2035, 63% of the support goes to renewables-based
electricity. "
In general, the world's power sector will require heavy investment
to fuel its growth, the IEA suggests. Overall, it projects
that $16.6 trillion (in 2009 dollars) will be required from
2009 through 2035, about 60% (or $9.6 trillion) of which will
be needed to build new plants. The remainder-$2.2 trillion
for transmission and $4.8 trillion for distribution-is expected
to be spent on improving and expanding power networks.
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POWER January 2011

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