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)|
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:
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.
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How Affordable is Gas in Latin America?
This graphic looks at gas affordability in Latin America, showing how much a liter of gas costs in 19 countries, relative to average incomes.
How Affordable is Gas in Latin America?
As gas prices have risen around the world, not each region and country is impacted equally.
Globally, the average price for a liter of gas was $1.44 USD on June 13, 2022.
But the actual price at the pump, and how affordable that price is for residents, varies greatly from country to country. This is especially true in Latin America, a region widely regarded as one of the world’s most unequal regions in terms of its income and resource distribution.
Using monthly data from GlobalPetrolPrices.com as of May 2022, this graphic by Latinometrics compares gas affordability in different countries across Latin America.
Gas Affordability in 19 Different Latin American Countries
To measure gas affordability, Latinometrics took the price of a liter of gas in 19 different Latin American countries and territories, and divided those figures by each country’s average daily income, using salary data from Statista.
Out of the 19 regions included in the dataset, Venezuela has the most affordable gas on the list. In Venezuela, a liter of gas is equivalent to roughly 1.3% of the country’s average daily income.
|Country||Gas price as of May 2022 (USD)||% of average daily income|
|🇩🇴 Dominican Republic||$1.41||12.6%|
|🇸🇻 El Salvador||$1.14||9.2%|
|🇨🇷 Costa Rica||$1.42||5.9%|
|🇵🇷 Puerto Rico||$1.35||2.2%|
This isn’t too surprising, as Venezuela is home to the largest share of proven oil reserves in the world. However, it’s worth noting that international sanctions against Venezuelan oil, largely because of political corruption, have hampered the once prosperous sector in the country.
On the other end of the spectrum, Nicaragua has the least affordable gas on the list, with one liter of gas costing 14% of the average daily income in the country.
Historically, the Nicaraguan government has not regulated gas prices in the country, but in light of the current global energy crisis triggered in large part by the Russia-Ukraine conflict, the government has stepped in to help control the situation.
As the Russia-Ukraine conflict continues with no end in sight, it’ll be interesting to see where prices are at in the next few months.
Mapped: Which Ports are Receiving the Most Russian Fossil Fuel Shipments?
Russia’s energy exports have become a hot topic. See which ports received fossil shipments during the first 100 days of the Ukraine invasion
As the invasion of Ukraine wears on, European countries are scrambling to find alternatives to Russian fossil fuels.
In fact, an estimated 93% of Russian oil sales to the EU are due to be eliminated by the end of the year, and many countries have seen their imports of Russian gas plummet. Despite this, Russia earned €93 billion in revenue from fossil fuel exports in the first 100 days of the invasion.
While the bulk of fossil fuels travel through Europe via pipelines, there are still a number marine shipments moving between ports. The maps below, using data from MarineTraffic.com and Datalastic, compiled by the Centre for Research on Energy and Clean Air (CREA), are a look at Russia’s fossil fuel shipments during the first 100 days of the invasion.
Russia’s Crude Oil Shipments
Much of Russia’s marine shipments of crude oil went to the Netherlands and Italy, but crude was also shipped as far away as India and South Korea.
India became a significant importer of Russian crude oil, buying 18% of the country’s exports (up from just 1%). From a big picture perspective, India and China now account for about half of Russia’s marine-based oil exports.
It’s important to note that a broad mix of companies were involved in shipping this oil, with some of the companies tapering their trade activity with Russia over time. Even as shipments begin to shift away from Europe though, European tankers are still doing the majority of the shipping.
Russia’s Liquefied Natural Gas Shipments
Unlike the gas that flows along the many pipeline routes traversing Europe, liquefied natural gas (LNG) is cooled down to a liquid form for ease and safety of transport by sea. Below, we can see that shipments went to a variety of destinations in Europe and Asia.
Fluxys terminals in France and Belgium stand out as the main destinations for Russian LNG deliveries.
Russia’s Oil Product Shipments
For crude oil tankers and LNG tankers, the type of cargo is known. For this dataset, CREA assumed that oil products tankers and oil/chemical tankers were carrying oil products.
Huge ports in Rotterdam and Antwerp, which house major refineries, were the destination for many of these oil products. Some shipments also went to destinations around the Mediterranean as well.
All of the top ports in this category were located within the vicinity of Europe.
Russia’s Coal Shipments
Finally, we look at marine-based coal shipments from Russia. For this category, CREA identified 25 “coal export terminals” within Russian ports. These are specific port locations that are associated with loading coal, so when a vessel takes on cargo at one of these locations, it is assumed that the shipment is a coal shipment.
The European Union has proposed a Russian coal ban that is expected to take effect in August. While this may seem like a slow reaction, it’s one example of how the invasion of Ukraine is throwing large-scale, complex supply chains into disarray.
With such a heavy reliance on Russian fossil fuels, the EU will be have a busy year trying to secure substitute fuels – particularly if the conflict in Ukraine continues to drag on.
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