Close

Events of the last year have increased many of the long-term uncertainties facing the global energy sector, says the International Energy Agency’s (IEA) World Energy Outlook 2014 (WEO-2014). It warns against the risk that current events distract decision makers from recognising and tackling the longer-term signs of stress that are emerging in the energy system.

In the central scenario of WEO-2014, world primary energy demand is 37% higher in 2040, putting more pressure on the global energy system. But this pressure would be even greater if not for efficiency measures that play a vital role in holding back global demand growth. The scenario shows that world demand for two out of the three fossil fuels – coal and oil – essentially reaches a plateau by 2040, although, for both fuels, this global outcome is a result of very different trends across countries. At the same time, renewable energy technologies gain ground rapidly, helped by falling costs and subsidies (estimated at $120 billion in 2013). By 2040, world energy supply is divided into four almost equal parts: low-carbon sources (nuclear and renewables), oil, natural gas and coal.

The report sees a positive outlook for renewables, as they are expected to account for nearly half of the global increase in power generation to 2040, and overtake coal as the leading source of electricity. Wind power accounts for the largest share of growth in renewables-based generation, followed by hydropower and solar technologies. However, as the share of wind and solar PV in the world’s power mix quadruples, their integration becomes more challenging both from a technical and market perspective.

World oil supply rises to 104 million barrels per day (mb/d) in 2040, but hinges critically on investments in the Middle East. As tight oil output in the United States levels off, and non-OPEC supply falls back in the 2020s, the Middle East becomes the major source of supply growth. Growth in world oil demand slows to a near halt by 2040: demand in many of today’s largest consumers either already being in long-term decline by 2040 (the United States, European Union and Japan) or having essentially reached a plateau (China, Russia and Brazil). China overtakes the United States as the largest oil consumer around 2030 but, as its demand growth slows, India emerges as a key driver of growth, as do sub-Saharan Africa, the Middle East and Southeast Asia.

“A well-supplied oil market in the short-term should not disguise the challenges that lie ahead, as the world is set to rely more heavily on a relatively small number of producing countries,” said IEA Chief Economist Fatih Birol. “The apparent breathing space provided by rising output in the Americas over the next decade provides little reassurance, given the long lead times of new upstream projects.”

Download  WEO_2014_presentation       WEO-2014-Executive-Summary     WEO_2014_factshheets

Visit IEA Bookshop    to order the full report

Comments for BIEE Members only.
Sign in or become a member today.

Sign up to our Events Newsletter

To receive email updates about our forthcoming events and news please sign up here.

Sign Up