Energy
The World’s Projected Energy Mix, 2018-2040
The World’s Projected Energy Mix, from 2018-2040
Since 1977, the International Energy Agency (IEA) has put together the World Energy Outlook, a highly anticipated annual report that looks towards the future of energy production and consumption on a global basis.
In the latest edition, the report dives into two very different policy scenarios that help illustrate the choices and consequences we have ahead of us.
In this post, we’ll look at each policy scenario and then dive into the associated numbers for each, showing how they affect the projected global energy mix from 2018 to 2040.
The Policy Scenarios
The IEA bases its projections based on two policy scenarios:
- The Stated Policies Scenario
This scenario is intended to reflect the impact of existing public policy frameworks, including announced policy intentions. - The Sustainable Development Scenario
This scenario outlines a major transformation of the global energy system, aligned with achieving the energy-related components of the United Nations’ Sustainable Development Goals (SDGs), such as reducing carbon emissions.
Neither scenario is technically a forecast; the IEA sees both scenarios as being possible.
However, this data can still provide a useful starting point for decision makers and investors looking to read the tea leaves. Will countries stick to their guns on their current plans, or will those plans be scrapped in the name of bolder, sustainable initiatives?
Scenario 1: Stated Policies
Today’s chart shows data corresponding to this policies scenario, as adjusted by CAPP.
See the energy use data below, shown in terms of Millions of Tonnes of Oil Equivalent (Mtoe):
2018 | 2030 | 2040 | Est. % of mix (2040) | |
---|---|---|---|---|
Oil | 4,500 | 4,750 | 4,900 | 28% |
Natural Gas | 3,500 | 3,900 | 4,500 | 25% |
Coal | 3,850 | 3,900 | 3,750 | 21% |
Other Renewables | 300 | 750 | 1,300 | 7% |
Modern Bioenergy | 700 | 1,050 | 1,300 | 7% |
Nuclear | 700 | 800 | 900 | 5% |
Solid Biomass | 650 | 600 | 550 | 3% |
Hydro | 350 | 450 | 500 | 3% |
Global Total | 14,550 | 16,200 | 17,700 | 100% |
Note: Data is based on CAPP conversion estimates, and is rounded to nearest 50 Mtoe.
In the Stated Policies Scenario, oil will be the largest energy source in 2040, making up about 28% of the global energy mix — and natural gas will be right behind it, for 25% of supply.
Coal consumption, which is decreasing in Western markets, will stay consistent with 2018 levels thanks to growing demand in Asia.
Meanwhile, renewable energy (excl. hydro) will see an impressive renaissance, with this category (which includes wind, solar, geothermal, etc.) increasing its portion in the mix by over 300% over 22 years.
Scenario 2: Sustainable Development
The IEA’s Sustainable Development scenario is very different from the status quo, as shown here:
Source: IEA
The contrast between the energy needed in the Stated Policies (STEPS) and Sustainable Development (SDS) projections is stark, going from a 2,500 Mtoe increase to a 800 Mtoe decrease in total consumption, driven by residential and transportation sectors.
Under this scenario, renewable energy use for electricity consumption (incl. hydro) would need to increase by 8,000 TWh more, with ultimately more than half of it in Asia.
Renewable Energy (Electricity Generation) | 2018 | 2040 | % Increase |
---|---|---|---|
Stated Policies | 6,800 TWh | 18,049 TWh | 165% |
Sustainable Development | 6,800 TWh | 26,065 TWh | 283% |
Under this transformational and ambitious scenario, fossil fuel use would plummet. Coal consumption would drop by roughly 60%, oil consumption by 30%, and the role of natural gas in the energy mix would remain stagnant.
Two Scenarios, One Path
Both scenarios are a possibility, but in reality we will likely find ourselves somewhere in between the two extremes.
This makes these two baselines a helpful place to start for both investors and decision makers. Depending on how you think governments, corporations, and organizations will act, you can then adjust the projections accordingly.
Maps
Mapped: Renewable Energy and Battery Installations in the U.S. in 2023
This graphic describes new U.S. renewable energy installations by state along with nameplate capacity, planned to come online in 2023.

Renewable and Battery Installations in the U.S. in 2023
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Renewable energy, in particular solar power, is set to shine in 2023. This year, the U.S. plans to get over 80% of its new energy installations from sources like battery, solar, and wind.
The above map uses data from EIA to highlight planned U.S. renewable energy and battery storage installations by state for 2023.
Texas and California Leading in Renewable Energy
Nearly every state in the U.S. has plans to produce new clean energy in 2023, but it’s not a surprise to see the two most populous states in the lead of the pack.
Even though the majority of its power comes from natural gas, Texas currently leads the U.S. in planned renewable energy installations. The state also has plans to power nearly 900,000 homes using new wind energy.
California is second, which could be partially attributable to the passing of Title 24, an energy code that makes it compulsory for new buildings to have the equipment necessary to allow the easy installation of solar panels, battery storage, and EV charging.
New solar power in the U.S. isn’t just coming from places like Texas and California. In 2023, Ohio will add 1,917 MW of new nameplate solar capacity, with Nevada and Colorado not far behind.
Top 10 States | Battery (MW) | Solar (MW) | Wind (MW) | Total (MW) |
---|---|---|---|---|
Texas | 1,981 | 6,462 | 1,941 | 10,385 |
California | 4,555 | 4,293 | 123 | 8,970 |
Nevada | 678 | 1,596 | 0 | 2,274 |
Ohio | 12 | 1,917 | 5 | 1,934 |
Colorado | 230 | 1,187 | 200 | 1,617 |
New York | 58 | 509 | 559 | 1,125 |
Wisconsin | 4 | 939 | 92 | 1,034 |
Florida | 3 | 978 | 0 | 980 |
Kansas | 0 | 0 | 843 | 843 |
Illinois | 0 | 363 | 477 | 840 |
The state of New York is also looking to become one of the nation’s leading renewable energy providers. The New York State Energy Research & Development Authority (NYSERDA) is making real strides towards this objective with 11% of the nation’s new wind power projects expected to come online in 2023.
According to the data, New Hampshire is the only state in the U.S. that has no new utility-scale renewable energy installations planned for 2023. However, the state does have plans for a massive hydroelectric plant that should come online in 2024.
Decarbonizing Energy
Renewable energy is considered essential to reduce global warming and CO2 emissions.
In line with the efforts by each state to build new renewable installations, the Biden administration has set a goal of achieving a carbon pollution-free power sector by 2035 and a net zero emissions economy by no later than 2050.
The EIA forecasts the share of U.S. electricity generation from renewable sources rising from 22% in 2022 to 23% in 2023 and to 26% in 2024.
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