POWER January 2012 - 8

World Energy Outlook Forecasts Great
Renewables Growth
Driven by policies to limit carbon emissions, as well as government
subsidies, the share of worldwide nonhydro renewable power
is set to grow from just 3% in 2009 to 15% in 2035, the International
Energy Agency (IEA) forecasts in its recently released World
Energy Outlook 2011. Under the same scenario-which assumes
that carbon pricing, explicit or implicit, is adopted in developed
countries as well as China-coal will continue to reign as the
world's largest source of power globally in 2035, but to a much
lesser extent, falling from 41% to 33% (Figure 1). Power from
oil will become a rarity, as it drops from 5% in 2009 to 1.5% in
2035, and the percentage of power from natural gas, hydro, and
nuclear will remain relatively constant throughout the period, at
22%, 16%, and 13% respectively, the report says.
Demand for power is forecast to continue its upward trend,
even though in 2009 demand fell by an unprecedented 0.7%
in response to the global economic slowdown. In the New Policies
Scenario, which assumes carbon pricing in only developed
countries and China, demand will grow by four-fifths, at 2.4%
to over 31,700 TWh in 2035. If current policies are continued,
as assumed in the Current Policies scenario, demand will double,
and under the 450 Scenario, which assumes carbon policies are
implemented in every country, it will increase by almost twothirds.
Nearly 80% of demand growth will occur in developing
countries, with China and India representing two-thirds of that
growth. Industry will remain the largest power-consuming sector,
with residential use following close behind. Even with widespread
use of electric vehicles, as is envisioned by 2035, transportation
will only account for about 2% of total demand.
Coal power will double in developing countries-far outweighing
a fall in developed countries, particularly in the European
Union (EU), where it plunges by two-thirds as a result of the EU's
carbon emissions trading program. (See " The Big Picture " on p.
12 for more on carbon taxes.) In the U.S., even under the New
Policies Scenario, coal will remain comparatively stable, dropping
1. Policies prime renewable pump. According the International
Energy Agency's (IEA's) World Energy Outlook 2011‚ the share of
renewables in global installed power generation capacity and additions
in the New Policies Scenario is poised to surge to 15% in 2035, from
3% in 2009. Courtesy: IEA
Total installed capacity
Capacity additions:
Renewables
10,000
8,000
6,000
4,000
2,000
2010
8
2015
2020 2025 2030 2035
Nuclear
Existing 2010 capacity
Oil
Gas
Coal
just 3% between 2009 and 2035. China's share of coal power is
also expected to drop from 79% in 2009 to 56% in 2020, but in
India, coal use is projected to almost triple.
The IEA projects that more-efficient coal-fired plants will be built
through 2035, including ultrasupercritical designs and integrated
gasification combined cycle plants, driven by increases in coal prices
and reductions in the capital costs of advanced coal technologies. " As
a result, the average global thermal efficiency of coal plants increases
by four percentage points, from 38% in 2009 to 42% in 2035, " the
report says. By 2035, 65 GW of coal capacity will be equipped with
carbon capture and storage, though related technologies only become
competitive with other generation technologies closer to 2035,
and only in regions that have adopted a carbon price.
Natural gas-fired generation will grow from 4,300 TWh in 2009
to a little over 7,900 TWh in 2035 under the New Policies Scenario,
with much of that growth occurring in China (one-fifth),
the Middle East (one-fifth), and India (one-tenth). Gas generation
will also grow in developed countries, spurred by efficiency improvements
and carbon pricing that will make gas power competitive
with coal. Combined cycle gas turbines (CCGT) will remain the
dominant gas-fired generation technology (over 60% of growth in
gas-fired generation will be produced by CCGT plants), but use of
open-cycle gas turbines is also forecast to more than double.
The nuclear accident in Japan resulted in retirement plans for
all nuclear plants in Germany by the end of 2022, no lifetime extensions
or new plants in Switzerland, decommissioning of Units
1 to 4 and no construction of new units at the Fukushima Daiichi
site, and delays in capacity additions in China. In the wake of the
Japanese disaster, financing may become more difficult to secure
for nuclear projects worldwide, leading to an increased cost of
capital, the IEA forecasts. Compared to figures published in the
2010 Outlook, expected construction costs have risen by 5% to
10%. Even so, many countries will press ahead with plans for new
nuclear, though short-term delays are expected. Globally, nuclear
power capacity is projected to rise in the New Policies Scenario
from 393 GW in 2009 to 630 GW in 2035-just some 20 GW lower
than projected in the previous year's Outlook.
Renewables expand significantly in all three scenarios-and
2. Continued support. Global subsidies to renewables-based
electricity and biofuels by region in the New Policies Scenario are set to
increase, with renewable subsidies increasing from $66 billion in 2010
(compared with $409 billion for fossil fuels) to $250 billion in 2035, the
International Energy Agency says. Courtesy: IEA
Rest of world
250
200
150
100
50
www.powermag.com
India
China
United States
European Union
2007 2008 2009 2010
2015 2020 2025 2030 2035
POWER | January 2012
GW
Billion dollars (2010)
http://www.powermag.com
POWER January 2012

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