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Venturing a Long-Term Forecast of Energy Supply and Demand around the World in 2050

Elaboration 2018 10 Pages

Business economics - Economic Policy

Excerpt

Table of Contents

Introduction

The Long-Term Forecast of Energy Supply And Demand in the World

The Future of Primary Energy Supply
Natural Gas
Coal
Nuclear Power
Sustainable Resources

The Future of Energy Demand in BRICs and OECD Countries

Conclusion

References

Introduction

A secure, affordable and reliable energy supply remains to be highly significant to economic stability, as well as development in the world. Notably, the challenges posed by climate change, the elevating energy demands alongside the erosion of energy security of the developing societies have amounted to high challenges for energy policy makers. It is evident that the current global energy system sits at the nexus of different dilemmas, which include, the development dilemma that refers to prosperity versus poverty, industrialization dilemma referring to growth versus the environment and trust dilemma referring to globalization versus security.

Over the years, strains have always been evident in global energy system, but nowadays, it has been noted that these tensions are becoming more severe. The modern energy system has several lethargies due to its complexity along with scale. Therefore, it is evident that the extensive timescales that are required for planning as well as constructing new energy infrastructure implies that the tensions within this system may not be resolved quickly or easily. In this sense, major changes in the global energy system are expected to be apparent after a significant number of years. Experts have described different scenarios to identify such changes, considering the plausible relationships between distinct possibilities and perspectives. Remarkably, these scenarios have helped in the preparation, shaping and thriving in a reality that is expected to unfold eventually. For example, the use of scramble and blueprint scenarios can a major step in the development of the global energy system in fifty years to come, although they are both challenging outlooks. Therefore, this paper describes the long-term forecast of energy supply and demand in the world, the future of primary energy supply such as oil, gas, coal, nuclear and sustainable energy, alongside outlining the future of energy demand in the BRICs and OECD countries.

The Long-Term Forecast of Energy Supply And Demand in the World

The analysis of the intersection between mitigation of climate change issues and energy requires an adoption of long-term perspectives. The infrastructure of energy takes time to upsurge and contains crucial life that is measured in decades in some plants. The development of new energy technologies also takes time, and even much time before reaching their maximum market share (IEA, 2012). Increased human-induced concentration of green-house gases adversely affects the global climate and ecosystems over a long period. Therefore, policy makers and analysts who seek to tackle environmental and energy issues are required to look ahead at least to the next 30-50 years. However, since the future is unpredictable and unknown, this long-term perspective has to come to terms with uncertainty concept and people’s knowledge limitations (IEA, 2003). Thus, the future has to be looked at in an articulated fashion, not relying on the assumptions that the trends present today will continue in the future.

Significantly, the future can, thus, be explored and determined through scenarios. The examination of an internally continual and coherent chain of events and trends, which may follow from current actions, helps in forming a better assessment of alternative policies (scenario planning) (IEA, 2003). Therefore, the most important underlying factors that drive an energy or environment system over periods of 30-50 years include social structures, technological advancements, environmental values and even openness of markets. Experts have, hence, warned that it is risky and challenging to a future strategy uniquely on BAU (business-as-usual) scenarios and forecasts (IEA, 2012). On the other hand, the use of explanatory scenarios may be a better strategy. In this sense, these scenarios help in exploring diverse plausible future world configurations. Moreover, the identification of factors affecting GHG emissions over a fifty-year period may be helpful in policymaking choices (IEA, 2003). Correspondingly, environmental implications of new technologies can demonstrate critical path dependencies on this similar time frame, especially in the energy industry.

Shell’s scenario gives an excellent of the global scenarios whereby it is evident that Shell has a venerable practice in the development of lasting energy scenarios, as a tool for better business decision making. For years, the planners of Shell have been engaged in scenario developments in conjunction with different agencies including the Intergovernmental Panel for Climate Change and World Business Council for Sustainable Development (IEA, 2003). Earlier Shell scenarios explored the future in short timeframes, but since 1995, they have considered a time horizon of around fifty years. The 1995 energy scenarios were based on normal market dynamics assumption but, on a fast change in the global energy system. There were two scenarios; dematerialization and sustained growth scenarios, assuming that fast technological advancement that is fostered by open markets would offset GHG emissions by 2050 (IEA, 2012).

The Shell’s scenarios released in 2001, identified three crucial factors that could shape long-term change; resources, social priorities and technology. They affirmed that energy resource scarcity is a major factor that may trigger discontinuities in the energy system within the next fifty years (IEA, 2003). Even though, coal is excluded in this scarcity over this timeframe, its use and cost of extraction may affect its competitiveness. The availability of gas remains uncertain in the future too, advocating opportune development of gas transport infrastructure, with nuclear remaining to be uncompetitive with respect for gas in some coming decades (IEA, 2012). Renewable energy sources remain potentially plentiful, but, especially for solar and wind, development is constrained by inappropriate technology of energy storage, alongside the cost of competitiveness with respect to conventional energy that is yet to be established.

Technology represents another issue that is expected to amount potential disruptions in the future of energy especially in solar photovoltaics and hydrogen fuel cells. Some of the fundamental weaknesses include costs, the forms of storage and fuel transport infrastructure, which have to be addressed first (IEA, 2003). Again, there is uncertainty of social and personal priorities, especially the attitudes towards self-sufficiency energy or security and those geared to the environment. Timing alongside these factors is deemed to play differently with respect to energy technologies applied or resources and can highly influence the outcome or solution in the sense of climate change.

The Future of Primary Energy Supply

Natural Gas

According to ACT (Accelerated Technology) scenarios, the portion of natural gas in the production of electricity remains quite robust, demonstrating a significant increase in the percentage of total generation by 2050 (IEA. 2008). There are ample gas reserves that can meet the increasing energy demand in the world, although there are different factors that are expected to affect its actual price and availability (IEA, 2012). Natural gas has been observed to emit limited amounts of carbon dioxide compared to coal. Accordingly, the enhanced efficiency of gas-fired electricity producing power stations remains to be one of the modern power generation success stories of technology. In order to attain even higher efficiencies, new materials that can withstand extreme temperatures will have to be provided.

Coal

The elevation of coal demand or any change in its course in the future will depend on the strength of policy measures, which favor lower-emissions energy sources and the deployment of more-effective technologies of coal combustion. Carbon dioxide emissions reduction from industries, power generation and production of synthetic fuels can be highly reduced by the use of carbon dioxide capture and storage technologies (CCS) (IEA, 2003). Notably, these technologies can reduce these emissions from coal as well as from natural gas use in these industries to almost zero.

However, even though the costs of these technologies are currently high, it is expected that they will have significantly fallen by 2030. Moreover, in situations where the captured carbon dioxide is used in enhanced oil recovery (EOR), these perceived costs can be extremely low or negative in some cases (IEA, 2003). On the contrary, the potential for the global long-term for carbon dioxide EOR remains to be small with respect to global emissions from the sector of generating power (IEA, 2008). Fortunately, more efficient technologies that can be used for coal combustion are either in advanced development storage or are available, for example, high-temperature pulverized coal plants and integrated coal-gasification combined-cycle (IGCC) (IEA, 2012). Therefore, it is evident that CCS technologies highly contribute in constraining carbon dioxide gas emissions in rapidly growing economies with large coal reserves, for example, Indi and China.

Nuclear Power

Over several decades after the discovery of nuclear power generation, it has been affirmed that this is an emission-free technology that is highly embraced in different nations all over the world. Several generations have used this technology, with Generation III being developed in the 1990s, demonstrating numerous developments in safety and economics such as the so-termed as passive safety features (IEA, 2003). According to scholars, eleven nations, including those OECD nations with the largest nuclear power industries, have combined to form Generation IV nuclear power stations.

However, there are three major concerns that have presented challenges to nuclear power’s further exploitation, namely, large capital cost, the possibilities of proliferation of nuclear weapons, and public opposition because of the perceived nuclear accidents and threats of radioactive waste. Therefore, the proponents of this technology have focused on the development of Generation IV reactors that will ultimately address these concerns (IEA, 2003). With respect to this, the assumption that these issues are met denotes that the use of nuclear energy will, thus, provide a substantial reduction of carbon dioxide emissions. ACT scenarios demonstrate that nuclear will account for a significant percentage increase of global energy generation by the year 2050, on top of reducing carbon dioxide gas emissions (IEA, 2008).

Sustainable Resources

According to energy experts and scholars, the increased use of renewable sources, for example, hydropower, solar, biomass and even wind in the generation of electricity will significantly contribute to carbon dioxide emission reductions by 2050 (IEA, 2003). ACT scenarios affirm that the share of these renewable in the production mix will increase from the current eighteen percent to as high as thirty-four percent by 2050 (IEA, 2008). In an ACT scenario that has limited optimistic assumptions on cost reductions for such renewable technologies; their generation share will be twenty-three percent in 2050. Nonetheless, in a more optimistic scenario (TECH Plus) for both nuclear and renewable technologies, the renewable share will reach more than thirty-five percent by 2050 (IEA, 2012).

Evidently, hydropower has already been widely applied and remains to be the cheapest resource in many parts of the globe, and the largest source of renewable production of electricity. Fortunately, there are considerable potentials for expansion, especially for small hydro-plants (IEA, 2012). Moreover, there is a considerable decline of onshore and offshore winds cost in recent years due to mass deployment and use of larger blades alongside more sophisticated methods of control. Expenditures depend on location; offshore installations prove to be more costly, especially in deep waters, although they are expected to be commercial in 2030. Power generation from wind turbines has been observed to increase rapidly and remains to be among the most important renewable source (IEA, 2003). Power generation for biomass combustion remains to be a renowned technology, which is commercially attractive as it provides available and affordable quality fuel. The use of a small proportion of biomass in coal-fired power station does not need major modifications of the plant, and can be highly economic, on top of reducing carbon dioxide emissions. Solar photovoltaic technology (PV) also plays an increasing role in niche applications as its costs have considerably dropped due to increased continuing R&D and deployment (IEA, 2008). Concentrating solar power (CSP) is also noted to have promising prospects in the future, although these two (CSP and PV) are expected to have a little share in global power generation by 2050 (IEA, 2003).

The Future of Energy Demand in BRICs and OECD Countries

The world’s energy demand is anticipated to rise by more than a third, over the period of up to 2035, according to New Policies Scenario, with China, India and Russia accounting for about sixty percent of this increase. Energy demand has been noted to increase scarcely in countries, although there is still a pronounced shift from oil, coal and in some nations, nuclear (IEA, 2012). The growth of oil consumption in developing economies, especially in the transportation sector in the BRICs, has outweighed the reduced demand in the OECD nations, thus; pushing the consumption of oil higher in the OECD nations. However, due to policy decisions that carry much of the weight for the global coal balance taken in the BRICs, the use of coal in the OECD nations is expected to gradually decline (IEA, 2003). Moreover, the since energy market will be much dominated by electricity; the electrification of OECD nations’ economy will increase further. Therefore, by the year 2050, most of the global energy will be consumed in developing nations, especially those experiencing rapid growth and development in all sectors that require energy. As a consequence, developing economies will require the consideration of energy security along with carbon dioxide abatement strategies. A considerable transformation of the world’s energy economy is needed to meet legitimate aspirations of citizens of the developing nations for energy services, secure supplies alongside ensuring sustainability (IEA, 2012). Developed nations have crucial roles to play in supporting the developing nations so as to leapfrog the process of technology development, along with employing efficient equipment and practices via capacity building, technology transfer and collaborative RD&D efforts (IEA, 2008).

Conclusion

The current societies require a secure, available, affordable and reliable energy supply for their economic stability and development. Notably, the challenges posed by climate change, the elevating energy demands alongside the erosion of energy security of the developing societies have caused several challenges for energy policy makers. It is evident that the current global energy system sits at the nexus of different dilemmas, which include, the development dilemma that refers to prosperity versus poverty, industrialization dilemma referring to growth versus the environment and trust dilemma referring to globalization versus security. By the year 2050, most of the global energy will be consumed in developing nations, especially those experiencing rapid growth and development in all sectors that require energy. As a consequence, developing economies will require the consideration of energy security along with carbon dioxide emission reduction strategies. A considerable transformation of the world’s energy economy is needed to meet legitimate aspirations of citizens of the developing nations for energy services, secure supplies alongside ensuring sustainability. The primary sources of energy have to be effectively exploited for an adequate supply for the elevating future demand, which can be achieved by the use of effective technologies.

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Details

Pages
10
Year
2018
ISBN (eBook)
9783668752191
File size
521 KB
Language
English
Catalog Number
v429858
Grade
1
Tags
venturing long-term forecast energy supply demand world

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Title: Venturing a Long-Term Forecast of Energy Supply and Demand around the World in 2050