U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
International Energy Outlook 2014
Release Date: September 9, 2014 | Next Release Date: September 2015 | Report Number: DOE/EIA-0484(2014)
OverviewWorld net electricity generation increases by 93 percent in the IEO2013 Reference case, from 20.2 trillion kilowatthours in 2010 to 39.0 trillion kilowatthours in 2040 (Table 13). Electricity supplies an increasing share of the world's total energy demand and is the world's fastest-growing form of delivered energy (Figure 80). World electricity delivered to end users rises by 2.2 percent per year from 2010 to 2040, as compared with average growth of 1.4 percent per year for all delivered energy sources.
In general, projected growth in OECD countries, where electricity markets are well established and consumption patterns are mature, is slower than in non-OECD countries, where at present many people do not have access to electricity. The electrification of historically off-grid areas plays a strong role in determining relative growth. The International Energy Agency estimates that 19 percent of the world's population, or about 1.3 billion people , did not have access to electricity in 2010. Moreover, almost 57 percent of the population in Africa currently remains without access to electric power.
Non-OECD nations consumed 49 percent of the world's total electricity supply in 2010, and their share of world consumption is expected to increase over the projection period. In 2040, non-OECD nations account for 64 percent of world electricity use (Figure 81). Total net electricity generation in non-OECD countries increases by an average of 3.1 percent per year in the Reference case, led by annual increases averaging 3.6 percent in non-OECD Asia (including China and India) from 2010 to 2040 (Figure 82). In contrast, total net generation in the OECD nations grows by an average of only 1.1 percent per year from 2010 to 2040.
The IEO2013 Reference case projections do not incorporate assumptions about future policies and regulations related to limiting or reducing greenhouse gas emissions, such as caps or taxes on carbon dioxide emissions. The Reference case does, however, incorporate existing regulations and national energy policies, such as the European Union's 20-20-20 plan and its member states' nuclear policies; China's wind capacity targets; and India's National Solar Mission. Any new and unanticipated government policies or legislation aimed at limiting or reducing greenhouse gas emissions could substantially change the trajectories of fossil and nonfossil fuel consumption presented in this outlook.
Electricity generation by source
The worldwide mix of primary fuels used to generate electricity has changed a great deal over the past four decades. Coal continues to be the fuel most widely used in electricity generation, although generation from nuclear power increased rapidly from the 1970s through the 1980s, and natural gas-fired generation grew rapidly in the 1980s, 1990s, and 2000s. The use of oil for electricity generation has declined since the late 1970s, when oil prices rose sharply .
Beginning in the early 2000s, high fossil fuel prices in combination with concerns about the environmental consequences of greenhouse gas emissions resulted in interest in developing alternatives to fossil fuels for generation—specifically, nuclear power and renewable energy sources. In the IEO2013 Reference case, long-term global prospects continue to improve for generation from both nuclear and renewable energy sources. Renewable energy sources are the fastest-growing sources of electricity generation in the IEO2013 Reference case, with annual increases averaging 2.8 percent per year from 2010 to 2040 (Figure 83). In particular, nonhydropower renewable resources are the fastest-growing sources of new generation in the outlook, in both OECD and non-OECD regions. Nonhydropower renewables, which accounted for 4 percent of the generation market in 2010, increase their share of the market to 9 percent in 2040, with much of the growth coming from wind generation.
After renewable energy sources, natural gas and nuclear power are the next fastest-growing generation sources, both increasing by 2.5 percent per year from 2010 to 2040. Although coal-fired generation increases by a slower annual average of 1.8 percent over the projection period, it remains the largest source of generation through 2040 and grows by the largest absolute amount over the period. The outlook for coal could be altered substantially, however, by any future national policies or international agreements aimed at reducing or limiting the growth of greenhouse gas emissions. In addition, should the fast-paced growth in U.S. shale gas production in recent years be replicated in other nations with shale gas resources (notably China), the outlook for world natural gas-fired electricity generation could be much different from that presented in the IEO2013 Reference case.
Coal is the predominant fuel used for electricity generation worldwide. In 2010, coal-fired generation accounted for 40 percent of overall worldwide electricity generation. Coal-fired electricity generation grows in the Reference case at a 1.8-percent annual rate from 2010 to 2040. In 2040, total world electricity generation from coal is 73 percent higher than the 2010 level, although coal's share of the electricity market falls to 36 percent in 2040. China and India alone account for 89 percent of the projected growth in coal-fired generation. In contrast, OECD nations reduce their reliance on coal-fired electricity generation, with environmental factors, particularly in OECD Europe, playing a sizable role in the reduction.
In 2010, natural gas accounted for 22 percent of the world's electricity generation. Its projected share rises to 24 percent in 2040. Prospects for natural gas have improved substantially over the past several years, in large part because of revised expectations for shale gas, tight gas, and coalbed methane—especially shale gas—both within the United States and globally. The additional resources will allow natural gas supplies to be used as LNG to supply markets that have few domestic resources. As a result, natural gas markets remain well supplied, with prices relatively low in the mid-term, as many nations turn to natural gas, rather than more expensive or more carbon-intensive sources of electricity, to supply their future power needs.
Petroleum and other liquid fuels
Electricity generation from petroleum and other liquid fuels declines over the IEO2013 projection period, continuing a two-decadelong trend. Worldwide, electricity generation derived from liquids falls from 5 percent of total production in 2010 to 2 percent in 2040. Nations respond to high, sustained oil prices by reducing or eliminating their use of oil for generation—opting instead for alternative sources of electricity, including natural gas and nuclear. Even in the petroleum-rich Middle East, there is an effort to reduce the use of liquids for generation in favor of natural gas and other resources, in order to maximize revenues from oil exports. The liquids share of total generation in the Middle East region declines from 34 percent in 2010 to 14 percent in 2040.
Electricity generation from nuclear power worldwide increases from 2,620 billion kilowatthours in 2010 to 5,492 billion
kilowatthours in 2040 in the IEO2013 Reference case, as concerns about energy security and greenhouse gas emissions support
the development of new nuclear generating capacity. In addition, world average capacity utilization rates have generally risen
over time, from about 68 percent in 1980 to about 80 percent in 2011. Factors underlying the IEO2013 nuclear power projections include the consequences of the March 2011 disaster at Fukushima Daiichi, Japan; planned retirements of nuclear capacity in OECD Europe under current policies; and continued strong growth of nuclear power in non-OECD Asia.
Japan significantly curtailed its nuclear generation as a direct result of the Tōhoku earthquake and related tsunami on March 11, 2011. In addition to the four damaged Fukushima Daiichi reactors, Japan's 50 other nuclear reactors were shut down over the following 14 months. Japan compensated for the loss of nuclear generation by increasing its generation from natural gas, oil, and coal and by implementing efficiency and conservation measures to reduce load. Two reactors have returned to service, and additional reactors are expected to return to service soon. In the IEO2013 Reference case, fossil fuel generation and conservation continue to bridge the gap left by the shutdown of Japan's nuclear plants.
The Fukushima Daiichi disaster could have long-term implications for the future of world nuclear power development in general. Even China—where large increases in nuclear capacity have been announced and are anticipated in the IEO2013 Reference case—halted approval processes for all new reactors until the country's nuclear regulator completed its safety review. Germany and Switzerland announced plans to phase out or shut down their operating reactors by 2022 and 2034, respectively. Although the IEO2013 Reference case considered the impacts of the disaster at Fukushima Daiichi, the uncertainty associated with nuclear power projections for Japan and for the rest of the world has increased.
On a regional basis, the IEO2013 Reference case projects the strongest growth in nuclear power for the countries of non-OECD Asia, which average 9.2 percent per year from 2010 to 2040, including average increases of 10.2 percent per year in China and 10.6 percent per year in India (Figure 84). China leads the region with 43 percent of the world's active reactor projects under construction in 2011 and installs the most nuclear capacity over the period, building 160 gigawatts of net generation capacity by 2040. Outside Asia, the largest increase in nuclear generation is in OECD Europe, at a relatively modest average rate of 0.7 percent per year. Worldwide, nuclear generation increases by 2.5 percent per year in the Reference case.
In IEO2013, the rate of growth in nuclear power generation worldwide is slower than in previous IEO projections. High capital and maintenance costs may keep some countries from expanding their nuclear power programs, while a lack of trained labor resources, concerns about safety, and limited global nuclear supply chain capability could keep national nuclear programs from meeting previously planned schedules.
To address the uncertainty inherent in projecting nuclear power growth in the long term, a two-step approach is used. In the short term (through 2020), projections are based primarily on the current activities (planning documents, energy policies, forecasts, etc.) of the nuclear power industry and national governments. Because of the long permitting and construction lead times associated with nuclear power plants, there is general agreement among analysts on which nuclear projects are likely to become operational in the short term. After 2020, the projections are based on a combination of announced plans or goals at the country and regional levels and consideration of other long-term issues facing the development of nuclear power, including economic issues, geopolitical issues, technology advances, environmental policies, uranium availability, and the viability of alternative technologies for electricity production.
Hydroelectric, and other renewable resources37
Renewable energy is the fastest-growing source of electricity generation in the IEO2013 Reference case. Total generation from renewable resources increases by 2.8 percent annually, and the renewable share of world electricity generation grows from 21 percent in 2010 to 25 percent in 2040. About 80 percent of the increase is in hydroelectric and wind power. The contribution of wind power, in particular, has grown swiftly over the past decade, from 31.4 billion kilowatthours of net generation in 2000 to 341.5 billion kilowatthours in 2010—a trend that continues in the Reference case projection. Of the 5.4 trillion kilowatthours of new renewable generation added over the projection period, 2.8 trillion kilowatthours (52 percent) is attributed to hydroelectric power and 1.5 trillion kilowatthours (28 percent) to wind (Table 14).
Although renewable energy sources have positive environmental and energy security attributes, most renewable technologies other than hydroelectricity do not compete economically with fossil fuels, except in a few regions or in niche markets. Solar power, for instance, is currently a niche source of renewable energy, but it can be competitive where electricity prices are especially high, where peak load pricing occurs, where government incentives are available, or where infrastructure interconnection issues pose large costs. Government policies or incentives often provide support for construction of renewable generation facilities.
Changes in the mix of renewable fuels used for electricity generation differ between the OECD and non-OECD regions in the IEO2013 Reference case. In the OECD nations, most of the hydroelectric resources that are both economical to develop and also meet environmental regulations have already been exploited. With the exceptions of Canada and Turkey, there are few largescale hydroelectric projects planned for the future. As a result, most renewable energy growth in OECD countries comes from nonhydroelectric sources, especially wind and solar. Many OECD countries, particularly those in Europe, have government policies, including feed-in tariffs (FITs),38 tax incentives, and market share quotas, that encourage the construction of such renewable electricity facilities.
In non-OECD countries, hydroelectric power is the predominant source of renewable electricity growth. Strong growth in hydroelectric generation, primarily from mid- to large-scale power plants, is expected in China, India, Brazil, and a number of nations in Southeast Asia, including Malaysia and Vietnam. Growth rates for wind-powered generation are also high in non-OECD countries. The most substantial additions to electricity supply generated from wind power are in China.
The IEO2013 projections for renewable energy sources include only marketed renewables. Nonmarketed (noncommercial) biomass from plant and animal resources—while an important source of energy, particularly in the developing non-OECD economies—is not included in the projection, because comprehensive data on its use are not available. For the same reason, off-grid distributed renewables—renewable energy consumed at the site of production, such as off-grid photovoltaic (PV) panels—are not included in the projection.
Regional electricity markets: OECD
In the IEO2013 Reference case, electricity generation in the
OECD Americas (Canada, Chile, Mexico, and the United
States) grows by an average of 1.2 percent per year from 2010
to 2040 (Figure 85). Although generating far less electricity,
the less advanced economies of Chile and Mexico grow
more rapidly than other parts of the OECD Americas. Both
Canada and the United States have established electricity markets that grow more slowly than those in Chile and Mexico. Electricity generation in Chile and Mexico nearly triples over the
Almost all coal-fired generation capacity in the OECD Americas region is in the United States (92 percent in 2010). Although coal accounted for 51 percent of electricity generation in the United States as recently as 2003, its share declined to 37 percent in 2012 as extremely low natural gas prices allowed efficient plants fueled by natural gas to have lower operating costs than coal-fired plants in many U.S. regions . With the rise in natural gas prices at the start of 2013, the coal share of generation is likely to increase slightly in the near term. However, in the face of competition from natural gas and more stringent environmental regulations, the market share of coal-fired generation continues to fall in the Reference case, to 35 percent in 2040 (Figure 86).
Natural gas, which produced 1,162 billion kilowatthours of electricity in 2010 (23 percent of the total) in the OECD Americas, generates 2,348 billion kilowatthours in 2040 in the IEO2013 Reference case, with the United States accounting for most of the regional growth. With access to ample shale gas reserves and concurrent low natural gas prices, U.S. natural gas-fired electricity generation increases by 63 percent from 2010 to 2040. Liquids, which in 1978 commanded a 17-percent share of U.S. electricity generation, continue to decline in the outlook to less than 1 percent of total generation in 2040.
In 2010, 20 percent of the U.S. electricity supply was generated by 104 operating commercial nuclear reactors. In the Reference case, annual generation from nuclear power in the United States increases from 807 billion kilowatthours in 2010 to 903 billion kilowatthours in 2040. The nuclear share of the total generation mix declines, however, to 17 percent in 2040, as nuclear loses market share to natural gas and renewable energy sources. The growth in nuclear generation results from new builds, such as Vogtle Units 3 and 4 and Virgil C. Summer Units 2 and 3, as well as uprates at existing nuclear power units . In addition, ongoing construction at the Tennessee Valley Authority's Watts Bar Unit 2 is incorporated into the projection. As a result of license renewals, most nuclear power plant retirements occur after 2030. The IEO2013 Reference case includes the retirement of 0.6 gigawatts at Oyster Creek in 2019 and an additional 6.5 gigawatts of nuclear capacity toward the end of the projection. It does not include the recently announced retirements of the Kewaunee and Crystal River single reactors or the two reactors at San Onofre.
Nonhydroelectric renewable generation is the fastest-growing source of new U.S. electricity generation over the projection period. The nonhydroelectric renewables share of total U.S. generation more than doubles from 2010 to 2040. Wind plays an increasingly important role, with wind generation comprising about 5 percent of the total generation market in 2040, as compared with 2 percent in 2010. Hydroelectricity's share of U.S. electricity generation remains flat at 6 percent throughout the projection, as few large-scale hydroelectricity projects are undertaken.
In contrast to the United States, hydroelectric power accounts for the largest share of electricity generation in Canada—59 percent in 2010—although its share declines slightly in the projection. With almost 350 billion kilowatthours of hydroelectric generation in 2010, Canada was the third-largest producer of hydroelectricity in the world, with the province of Quebec accounting for more than one-half of the country's total generation from hydropower. Among the other Canadian provinces, British Columbia (16 percent), Newfoundland and Labrador (combined 11 percent), Manitoba (9 percent), and Ontario (9 percent) are also large producers . Canada has significant undeveloped hydropower reserves and expects significant growth in hydroelectric generation. In 2040, hydroelectric power production is 50 percent higher than in 2010, with growth concentrated in Quebec .
In 2010, nuclear power was the second-largest source of electricity generation in Canada. Although nuclear power's share of the generation market declines from 15 percent in 2010 to 12 percent in 2040, as natural gas generation grows more rapidly, nuclear generation grows in absolute terms. For example, in August 2012, the Canadian Nuclear Safety Commission formally issued a site preparation license allowing pre-construction activities for up to four proposed nuclear reactors at Ontario Power Generation's Darlington site near Toronto. The issuance of the site preparation license was Canada's first in nearly 30 years .
Natural gas, which had an 8-percent share of the Canadian electricity market in 2010, increases its share of total generation to 18 percent in 2040. Nonhydropower renewables, primarily wind and biomass, double their share of the electricity market to nearly 7 percent in 2040. A feed-in tariff, enacted in October 2009, has helped Ontario become a major source of wind generation. In 2040, wind accounts for 5 percent of Canada's electricity generation—a slightly larger share than in the United States. Canada's coal-fired share of total generation, which amounted to 14 percent in 2010, declines to 7 percent in 2040, in part as a result of the mandated phaseout of coal-fired capacity in Ontario province and government efforts to regulate greenhouse gas emissions. In 2012, the Canadian government announced final regulations to reduce the nation's greenhouse gas emissions to 17 percent below 2005 levels .
In the IEO2013 Reference case, electricity generation in Chile and Mexico grows at a combined annual average rate of 3.7 percent, more than triple the U.S. growth rate. The electricity profiles for the two countries are significantly different. Whereas Mexico relies heavily on hydrocarbon fuels to meet its electricity needs, hydroelectric power dominates Chile's generation mix. Mexico plans to increase its nuclear power production, as reflected in its national energy strategy issued in March 2012 . Although Chile currently has no nuclear power plants, it has announced that it intends to pursue nuclear power to meet its future electricity needs . Chile has a smaller population and a smaller electricity generation market than Mexico, and as a consequence the aggregated regional electric power data is dominated by Mexico.
For Chile and Mexico combined, natural gas provided the largest source of electricity generation in 2010. Natural gas-fired generation increases by 4.9 percent annually over the projection period, and in 2040 it provides 63 percent of the total electricity generation for the two countries, compared with 45 percent in 2010. Growth in natural gas consumption in Chile is fueled by imports, largely in the form of LNG. Historically, Chile imported a significant share of its natural gas from Argentina, but in recent years it has developed a sizable LNG import industry to reduce its reliance on natural gas from Argentina, which has cut off supplies to Chile periodically since 2004 .
Compared with other mid-income nations, industrial demand for electricity accounts for an unusually large share of Chile's electricity demand, largely because of Chile's large mining sector and metals industries . Periodic hydroelectricity shortages (due to low precipitation) and past Argentine natural gas cutoffs have motivated Chile's government to seek greater diversity in the fuel mix for its electric power generation and spurred the government to study the extent to which nonhydropower renewables could contribute to the electricity fuel mix .
In recent years, Mexico has gradually shifted its generation mix away from oil toward natural gas . For Chile and Mexico combined, liquids, which accounted for 16 percent of electricity generation in 2010, account for 4 percent of generation in 2040 in the IEO2013 Reference case. Although Mexico is a major natural gas producer, it also relies on a significant volume of natural gas imported by pipeline from the United States, as well as LNG from Peru, Trinidad and Tobago, Indonesia, Nigeria, and the Middle East .
Although Chile produced 20.8 billion kilowatthours of hydroelectricity in 2010, compared with Mexico's 35.4 billion kilowatthours, Chile's hydropower sector accounted for a significantly larger share of its power mix (33 percent, compare with 14 percent in Mexico . For the region, hydroelectric power grows at an annual rate of 3.3 percent from 2010 to 2040. Generation from other renewables grows at a faster rate than generation from hydropower, spurred on by policies such as Mexico's Income Tax Law (ITL), which provides a 100-percent tax deduction to investors in biomass, geothermal, solar, hydroelectric, and wind equipment .
Electricity generation in the nations of OECD Europe increases by an average of 1.0 percent per year in the IEO2013 Reference case, from 3,496 billion kilowatthours in 2010 to 4,765 billion kilowatthours in 2040. Because most of the countries in OECD Europe have relatively stable populations and mature electricity markets, most of the region's growth in electricity demand comes from those nations with more robust population growth (such as Turkey) and from the newest OECD members (including the Czech Republic, Estonia, Hungary, Poland, and Slovenia), whose projected economic growth rates exceed the OECD average.
Renewable energy is OECD Europe's fastest-growing source of electricity generation in the Reference case (Figure 87), at 2.2 percent per year on average from 2010 to 2040. The increase is almost entirely from wind, hydroelectric power, and solar. In 2011 alone, Germany doubled its solar photovoltaic generation capacity . Solar powered generation in OECD Europe increases by an average of 5.1 percent per year. Further, OECD Europe's leading position worldwide in wind power capacity is maintained through 2040, with growth in generation from wind sources averaging 5.0 percent per year.
Offshore wind is becoming an important source of renewable electricity in OECD Europe, particularly among those countries surrounding the Baltic, Irish, and North seas, where 90 percent of the world's offshore wind capacity is located. In 2012, 293 wind turbines with a capacity of 1,166 megawatts were installed in offshore OECD Europe. The United Kingdom has the most offshore wind capacity, with 59 percent of OECD Europe's total market, followed by Denmark (18 percent), Belgium (8 percent), and Germany (6 percent). An additional 3,000 megawatts of capacity is scheduled for completion in 2013 and 2014, bringing the region's total offshore wind capacity to 8,300 megawatts . In 2012, work was completed on the first phase of the London Array, a 630-megawatt project with 175 turbines that is the largest offshore wind power project in the world. The project has now surpassed the United Kingdom's 300-megawatt Thanet Wind Farm, which was the world's largest offshore wind facility at the time of its completion in September 2010 .
The growth of nonhydropower renewable energy sources in OECD Europe is influenced by some of the world's most favorable renewable energy policies. The European Union mandates that 20 percent of total energy production must come from renewables by 2020, up from about 13 percent in 2010 . Approximately 25 percent of OECD Europe's total electricity supply came from renewable sources in 2010. Although the IEO2013 Reference case does not anticipate that all future renewable energy targets in the European Union will be met on time, the renewable share (including hydroelectric power) of total electricity generation in OECD Europe still reaches 35 percent in 2040.
In addition to the European Union targets, some individual countries provide economic incentives to promote the expansion of renewable electricity. For example, Germany, Spain, Denmark, and the United Kingdom—leaders in OECD Europe's installed wind capacity—have enacted feed-in tariffs that guarantee above-market rates for electricity generated from renewable sources and, typically, are applicable for 20 years after the completion of a project . As long as European governments support price premiums for renewable electricity, robust growth in renewable generation is likely to continue. However, exceptionally generous feed-in tariffs have been falling out of favor in recent years. Renewable energy subsidies in Germany and Spain have been particularly expensive. In Germany, electricity consumers bore the cost of an estimated $27 billion in subsidies in 2012 alone . Given their economic cost, Germany, Spain, and the United Kingdom have undertaken measures to reduce feed-in tariffs. When the United Kingdom reduced its feed-in tariff for solar power, consumer installations of solar panels fell sharply .
Natural gas is OECD Europe's second-fastest growing source of power generation, after nonhydropower renewable energy, increasing at an average rate of 1.3 percent per year from 2010 to 2040 in the Reference case. The natural gas share of electricity production in OECD Europe rises from 23 percent in 2010 to 26 percent in 2040, and its growth could be faster if two impediments—the lack of market-based pricing and resource development constraints—were removed. Currently, many of OECD Europe's natural gas purchases are based on an oil price index, unlike natural gas pricing in the United States. As a result, the lack of competitive natural gas markets has resulted in slower penetration of natural gas into the electricity market. Moreover, although OECD Europe has significant shale gas resource potential, the emergence of a shale gas industry occurs much more slowly than in the United States, leaving OECD Europe dependent on imports of natural gas from Russia and LNG from North Africa for incremental supply increases.
Coal accounted for 24 percent of OECD Europe's net electricity generation in 2010, but concerns about the contribution of carbon dioxide emissions to climate change reduce that share over the projection period. The coal share of OECD Europe's electricity generation declines to 15 percent in 2040, and the region's total coal-fired generation in 2040 is nearly 14 percent lower than in 2010. In the IEO2013 Reference case, electricity generation from coal in OECD Europe declines by 0.5 percent per year from 2010 to 2040.
Coal consumption in the electric power sector is not decreasing uniformly in all the countries of OECD Europe. For instance, Spain's Coal Decree, which subsidizes the use of domestic coal in the country's power plants, went into effect in February 2011, and coalfired generation nearly doubled that year . The policy results in more electricity generation from coal-fired plants at least through 2014, when the subsidy is scheduled to expire . Germany, Poland, and the United Kingdom, which accounted for nearly two-thirds of coal-fired electricity generation in OECD Europe in 2010, are also expected to retain sizable portions of their coal fleets, especially if Germany follows through on its plan to shut down all its nuclear power plants by 2022. On the other hand, the United Kingdom may close the majority of its existing coal-fired power plants if its 2012-2013 draft Energy Bill, which calls for new coal-fired plants to be built with carbon capture and storage technology (CCS), is enacted .
Nuclear power accounted for 25 percent of OECD Europe's electricity generation in 2010. On a regional basis, OECD Europe is the second-largest producer of nuclear electricity after the OECD Americas. Although Germany and Switzerland have decided to retire their nuclear power plants in the aftermath of the 2011 accident at Fukushima Daiichi (and those decisions have been incorporated in the IEO2013 Reference case), other European countries plan to continue supporting nuclear power. More than one-half of OECD Europe's total nuclear generating capacity is in France, which is not expected to reduce its nuclear program in the Reference case. The construction of new nuclear power generating capacity in OECD Europe is led by the United Kingdom, Poland, and Turkey. In the United Kingdom, designs for the country's first new nuclear power plants in 25 years have been approved by the Office of Nuclear Regulation and the Environment Agency . Poland recently announced that it expects to commence operations at its first nuclear power plant by 2025 . Construction of Turkey's first nuclear power plant is scheduled to begin before the end of 2013 .
Total electricity generation in OECD Asia increases by an average of 1.0 percent per year in the IEO2013 Reference case, from 1,794 billion kilowatthours in 2010 to 2,374 billion kilowatthours in 2040. Japan accounted for the largest share of electricity generation in the region in 2010 and continues to do so throughout the projection, despite having the slowest-growing electricity market in the region and the slowest among all the OECD countries, averaging 0.4 percent per year—as compared with 1.0 percent per year for Australia/New Zealand and 1.9 percent per year for South Korea (Figure 88). Japan's electricity markets are well established, and its aging population and relatively slow projected economic growth translate into slow growth in demand for electric power. In contrast, Australia/New Zealand and South Korea experience more robust economic growth and population growth than Japan in the long term, leading to more rapid growth in demand for electricity.
Japan's use of nuclear power following the March 2011 disaster at the Fukushima Daichi nuclear power plant is discussed earlier in this chapter. In the IEO2013 Reference case, the nuclear share of Japan's electricity generation, which declined from 26 percent in 2010 to 1 percent in 2012, rises to about 18 percent in 2040, with generation from fossil fuels and renewables offsetting the loss of nuclear power (see "Japan will use more fossil generation in the next several years to compensate for nuclear power plant outages").
Japan has curtailed its nuclear generation significantly as a result of the Fukushima disaster and subsequent outages at other nuclear power plants. Historically, nuclear power plants have accounted for about 33 percent of Japan's total generation. To compensate for the nuclear plant shutdowns, power plants using natural gas, oil, and coal were called upon to increase their generation. For the 9-month period from April to December, use of fossil generation by the 10 general electric utilities (GEUs) that own and operate Japan's nuclear power generators was 16 percent higher in 2012 than in 2011 and 40 percent higher than in 2010 (Figure 89).39
The fossil share of total generation for the period April to December increased from 57 percent in 2010 to 74 percent in 2011 and 90 percent in 2012. In contrast, the share of nuclear generation fell from 34 percent in 2010 to 16 percent in 2011 and 2 percent in 2012. The nuclear share of generation is projected to increase as additional reactors beyond the two currently operating units meet government requirements and conditions to resume operation.
In September 2012, Japan established the Nuclear Regulation Authority (NRA) to ensure the safe operation of its nuclear reactors . The NRA is an administrative part of the Japanese Cabinet and replaces its predecessor, the Nuclear and Industrial Safety Agency. The restart of Japan's nuclear power plants requires the approval of the NRA as well as the Economy, Trade and Industry Ministry's Natural Resources and Energy Agency . Against the backdrop of increased fossil generation and trade deficits , Japan's NRA announced in January 2013 that final safety regulations will be issued in July 2013 . The new regulations are expected to address severe accidents and direct attacks, emergency preparedness and response, and seismic conditions near existing reactors. Likely plant modifications include a secondary control room that is not located near the primary control room, filtered and hardened containment vents to limit radioactive releases, and movable emergency power supplies that will facilitate reactor cooling for seven days in the event of an extended loss of power.
Japan's reactors must meet the new regulations and pass seismic inspections before being restarted. The economic impacts on Japan's electric power utilities of implementing the new regulations are unclear at this time, and Japan's national policy on nuclear power as a component of its future energy mix is evolving. These two circumstances result in uncertainty about the future of nuclear power in Japan. In the IEO2013 Reference case, Japan's total electricity generation from fossil fuels declines from the 2012 level as nuclear generation gradually returns to the power supply mix over the next several years; however, fossil generation remains higher than pre-Fukushima levels as a result of long-term growth in natural gas-fired generation (Figure 90).
Coal consumption in 2012 was largely unchanged from its pre-disaster level, because increased coal-fired generation at operating coalfired plants was offset by lost generation at coal plants disabled by the earthquake. Until more nuclear power plants return to service and new natural gas-fired capacity comes on line, coal consumption in Japan will increase. The increase in coal consumption is the result of the planned completion of two new coal plants, totaling 1.6 gigawatts, by the end of 2013 and the resumption of normal operations at coal-fired power plants affected by the disaster. The government's relaxation of environmental rules also encourages more coal use. The IEO2013 Reference case assumes that, while many of the nuclear reactors that have been shut down will resume operation in the 2015-2020 timeframe, others will be retired permanently and replaced—primarily by natural gas and renewables. From 2015 to 2040, 11 gigawatts of additional natural gas capacity is projected to come on line, increasing natural gas-fired generation by 7 percent from 2012 to 2040. On a national level, the nuclear share of Japan's total generation increases from 1 percent in 2012 to 18 percent in 2040, and the fossil share of total generation declines from 86 percent in 2012 to 66 percent in 2040.
Together, Australia and New Zealand relied on coal for about 63 percent of their electricity generation in 2010, based largely on Australia's rich coal resource base (9 percent of the world's total coal reserves). Australia relies on coal for nearly 80 percent of its electricity generation, compared with less than 10 percent in New Zealand. In 2010, hydropower provided more than one-half of New Zealand's electricity generation, and geothermal energy provided another 13 percent. In total, renewables account for almost three-fourths of New Zealand's electricity generation.
Australia and New Zealand continue to make advances in wind energy, with 3,146 megawatts of capacity installed at the end of 2011, compared with 908 megawatts in 2005. To help meet its 2025 goal of having 90 percent of electricity generation come from renewable sources, New Zealand is focusing on harnessing more of its geothermal potential . Two projects are currently under construction: the 82-megawatt Ngatamariki plant and the 166-megawatt Te Mihi plant. The Australia/New Zealand region uses negligible amounts of oil for electricity generation and no nuclear power, and this pattern does not change over the projection period. Natural gas-fired generation grows strongly in the region, however, averaging 3.0 percent per year from 2010 to 2040, helping to reduce the coal share to 39 percent in 2040.
In South Korea, coal and nuclear power currently provide 44 percent and 30 percent of total electricity generation, respectively. The country's natural gas-fired generation grows rapidly in the IEO2013 Reference case, nearly doubling from 2010 to 2040, but the natural gas share of total generation increases only slightly, from 21 percent in 2010 to 23 percent in 2040. Generation from nuclear power plants more than doubles from 2010 to 2040, and in 2040 the nuclear share of South Korea's electricity is 44 percent, with coal providing another 27 percent. Liquid fuels accounted for 4 percent of the country's power generation in 2010, and that share declines to less than 2 percent in 2040.
Regional electricity markets: non-OECD
Non-OECD Europe and Eurasia
Total electricity generation in non-OECD Europe and Eurasia grows at an average rate of 1.9 percent per year in the IEO2013 Reference case, from 1,605 billion kilowatthours in 2010 to 2,807 billion kilowatthours in 2040. Russia, with the largest economy in non-OECD Europe and Eurasia, accounted for 61 percent of the region's total generation in 2010 and retains approximately that share throughout the projection (Figure 91).
Natural gas and nuclear power fuel most of the growth in electricity generation in the non-OECD Europe and Eurasia region, which has nearly one-third of the world's total proved natural gas reserves. The region's natural gas-fired generation grows by an average of 2.0 percent per year from 2010 to 2040, and generation from nuclear power also grows strongly, averaging 2.8 percent per year and more than doubling from 2010 to 2040 in the Reference case.
Most of the coal-fired generating capacity in non-OECD Europe and Eurasia is in Russia and Ukraine. In the IEO2013 Reference case, coal-fired generation in Russia and the other non-OECD Europe and Eurasia nations (including Ukraine) increases slightly from 2010 to 2040.
Renewable generation in non-OECD Europe and Eurasia, almost entirely from hydropower facilities, increases by an average of 1.5 percent per year, largely as a result of repairs and expansions at existing hydroelectric sites. Other than increases in hydropower, only modest growth in renewable generation is projected for the nations of non-OECD Europe and Eurasia, given the region's access to fossil fuel resources and a lack of financing available for relatively expensive renewable projects. Nonhydropower renewable capacity in the region increases by 7.0 gigawatts from 2010 to 2040 in the Reference case.
Nuclear generation in non-OECD Europe and Eurasia grows strongly in the IEO2013 Reference case. With about 9 gigawatts of nuclear capacity currently under construction, Russia provides much of the increase. When they become operational by 2020, the new nuclear power plants will increase Russia's nuclear power capacity by more than 50 percent. An additional 24 gigawatts of new nuclear capacity is planned but not yet under construction in Russia. The country is also building a first-of-a-kind floating nuclear power plant, with a capacity of 70 megawatts. The plant is scheduled to begin operating in 2016 . Ukraine also relies heavily on nuclear power, and its energy strategy update in 2012, if achieved, would include more nuclear capacity additions by 2030 . Full implementation of the strategy has not been incorporated in the IEO2013 Reference case projection.
Non-OECD Asia—led by China and India—has the fastest projected growth rate for electric power generation worldwide, averaging 3.6 percent per year from 2010 to 2040 in the IEO2013 Reference case. The economies of non-OECD Asia expand strongly in the long term, with corresponding increases in demand for electricity. Total electricity generation in non-OECD Asia grows from 5,899 billion kilowatthours in 2010 to 17,023 billion kilowatthours in 2040 (Figure 92), when the region accounts for 44 percent of world electricity generation.
Although China's 3.0-percent average annual growth in coal-fired electricity generation over the IEO2013 projection period is high in comparison with other nations, it is less than one-third the country's growth rate over the past decade. The slowdown in the country's coal generation is in part a result of lower economic growth (which still is rapid in comparison with most other countries) and the Chinese government's efforts to lower the nation's energy intensity, as outlined in its latest five-year plan .
In 2010, the coal share of China's total electricity generation was an estimated 77 percent. In the IEO2013 Reference case, that share declines to 63 percent in 2040. Although China has been closing old, inefficient coal-fired power plants (71 gigawatts of capacity has been retired since 2006), it continues to experience a rapid increase in its coal-fired generating capacity . In 2010, coal plants in China represented 40 percent of total world coal-fired electric generating capacity; in 2040, China accounts for more than one-half of the world total. From 2010 to 2020 alone, China adds more coal-fired capacity in the Reference case projection than the current total in OECD Europe.
In the later years of the Reference case projection, China's natural gas consumption sees a sizable increase, made possible in part by domestic shale gas discoveries  that provide fuel for the fastest growth of natural gas-fired electricity generation among the IEO2013 regions, averaging 7.7 percent per year from 2010 to 2040. In absolute terms, only the United States and the Middle East experience larger expansions of natural gas-fired generation. Ambitions to address China's air quality issues are, in part, driving the country's move toward greater reliance on natural gas and reduced reliance on coal. From 2010 to 2040, the market share of natural gas in China's power generation sector increases from 2 percent to more than 5 percent.
Non-OECD Asia leads the world in installing new nuclear capacity in the IEO2013 Reference case, accounting for 64 percent of the net increase in nuclear capacity worldwide from 2010 to 2040 (or 215 gigawatts of the total 336-gigawatt increase). In 2040, the non-OECD Asia region accounts for about 34 percent of the world's nuclear generation and 33 percent of its nuclear capacity. China, in particular, has ambitious plans for nuclear power, with 16 nuclear power reactors in operation and 28 currently under construction. About 155 gigawatts of new nuclear capacity is installed in China by 2040 in the Reference case.
There is significant uncertainty in the IEO2013 Reference case projections for China's nuclear capacity. Officially, its nuclear
capacity targets are 70 to 80 gigawatts by 2020, 200 gigawatts by 2030, and 400 to 500 gigawatts by 2050 . The longterm
impacts of the March 2011 disaster at Japan's Fukushima Daiichi nuclear power plant on China's nuclear energy program
remain uncertain. In the aftermath of the disaster, China announced that it would halt approval processes for all new reactors until the country's nuclear regulator completed a safety review . The moratorium was lifted in late 2011, however, and it appears that construction has returned to pre-Fukushima trends.
The IEO2013 Reference case assumes that the global lack of heavy forging facilities40 and the long lead times needed to build or upgrade forging facilities, build new nuclear power plants, and train new personnel may cause China's nuclear power industry to grow more slowly than seen in official government predictions. The IEO2013 Reference case assumes that China's nuclear capacity will increase from 11 gigawatts in 2010 to 160 gigawatts in 2040, with the nuclear share of its total electricity generation growing from slightly less than 2 percent in 2010 to 11 percent in 2040.
China's energy policies in recent years have shown increased support for nonhydroelectric renewables. In 2010, China ranked second to the United States in wind-powered electricity generation and number three worldwide in offshore wind capacity, having developed the first commercial offshore wind project outside of Europe. Rich in wind resources, Inner Mongolia leads China's wind power production, followed by the Hebei, Gansu, and Lianoning provinces . Currently, China has several offshore wind projects in the assessment phase and intends to develop 5 gigawatts of offshore wind by 2015 and 30 gigawatts by 2020 . As with solar power, China has quickly built one of the largest wind generator manufacturing industries in the world. Four of the ten largest manufacturers of wind turbines are Chinese companies . In 2011, China surpassed the United States in terms of installed wind capacity, although not in wind-powered electricity generation.
Although India relied on coal for 68 percent of its electricity generation in 2010, in the IEO2013 Reference case that share falls to 56 percent in 2040. Transportation bottlenecks, land rights issues, and growing concerns over pollution have worked to reduce the growth rate of India's coal-fired electricity generation in recent years. In addition, coal shortages caused by difficulties in securing supplies at affordable prices forced some power producers to curtail operations in 2012, contributing to a widespread power outage in July 2012 that affected some 680 million people, making it the world's worst outage ever in terms of population affected . The problems associated with India's electric power sector continue throughout the projection.
Over the next decade, nuclear power supplants some coal-fired generation in India. The country has a goal of increasing its total nuclear generating capacity to 14.6 gigawatts by 2020. Seven nuclear reactors are currently under construction in India, all of which are scheduled to be operational by 2016 . Given past delays in India's ability to meet its nuclear capacity targets on time, the IEO2013 Reference case assumes a more conservative expansion of India's nuclear capacity—from 4.6 gigawatts in 2010 to 9.3 gigawatts in 2020 and then to 52.0 gigawatts in 2040, an average increase of 8.5 percent per year.
In addition to efforts to increase nuclear power, India is also encouraging the development of renewable sources of electricity. The country's 2003 New Electricity Act contained specific provisions to promote the development of hydroelectric resources, which are reflected in the growing share of hydropower in India's electricity market, from 13 percent in 2010 to 16 percent in 2040 in the IEO2013 Reference case. India's wind-powered electricity generation also grows rapidly in the projection, although starting from a relatively small base. In 2040, India is the second-largest producer of wind-based electricity among the non-OECD regions. Ninety-five percent of India's wind generating plants are concentrated in the southern and western parts of the country in the five states of Tamil Nadu, Andhra Pradesh, Gujarat, Karnataka, and Maharashtra . Future wind power development may be constrained by finances and grid connections rather than resources. In a 2012 assessment of wind energy potential, Lawrence Berkeley National Laboratory estimated that India's wind energy potential exceeds government estimates by a factor of 20 .
Outside China and India, the other nations of non-OECD Asia have some of the world's largest untapped hydropower resources, with some large hydroelectric dams in planning or construction phases. In December 2012, Vietnam completed the final portion of its 2,400-megawatt Son La dam, the largest hydroelectric project yet built in non-OECD Asia (excluding China and India). Hydroelectric power generation in other non-OECD Asia grows at a 4.6-percent average annual rate in the IEO2013 Reference case, to 550 billion kilowatthours in 2040—nearly four times the 2010 total. Many of the region's hydropower projects are sited on the Mekong, Irrawaddy, and Indus rivers.
There are some constraints on future hydroelectric development in non-OECD Asia that add uncertainty to the outlook. The Mekong River, which flows through China, Thailand, Laos, Vietnam, and Cambodia, has become a source of both regional economic development and political conflict in recent years. China, the world's largest generator of hydroelectricity, has built several large dams on the upper Mekong, leading to conflicts with countries downstream. Although Southeast Asia has ample potential and expansive plans for future development of hydroelectric power, there has been significant political opposition to several high-profile projects. Damming the Mekong has resulted in regional conflict between electricity consumers in upstream nations generally in favor of the construction and downstream nations that are dependent on the Mekong for agriculture and fish harvesting .
Electricity generation in the Middle East grows by 2.1 percent per year on average in the Reference case, from 758 billion kilowatt hours in 2010 to 1,405 billion kilowatthours in 2040, reflecting the region's rapid growth in population, economic activity, and income. With large reserves of crude oil and natural gas, the Middle East has relied primarily on the two fuel sources for its electricity generation. Over the projection period, natural gasfired generation rises at a 2.5-percent average annual rate and slowly displaces oil-fired generation, which declines slightly, while its share of the region's power generation market falls from 34 percent in 2010 to 14 percent in 2040 (Figure 93). Hydropower plays a relatively small role in providing electricity for the Middle East, and coal use is negligible.
Although Iran currently operates the only commercial nuclear
power plant in the Middle East, several nations in the region,
including Saudi Arabia and the United Arab Emirates, have
signaled their intent to install nuclear power facilities in the future [, ]. Even though there is considerable interest in nuclear power in the region, economic and political issues, as well as the long lead times associated with beginning a nuclear program, constrain the growth of nuclear capacity in the Middle East to a relatively modest total of 15 gigawatts in 2040 in the Reference case.
Demand for electricity in Africa grows at an average annual rate of 3.0 percent from 2010 to 2040 in the Reference case. Fossil fuel-fired generation supplied 80 percent of the region's total electricity in 2010, and that heavy reliance continues through 2040 in the IEO2013 Reference case. Coal-fired power plants, which were the region's largest source of electricity in 2010, accounting for 39 percent of total generation, supply only 28 percent of total electricity in 2040. In comparison, natural gas-fired generation expands strongly, from 30 percent of the total in 2010 to 43 percent in 2040 (Figure 94). Nuclear generation increases by an average of 6.7 percent per year over the projection period but remains a fairly minor part of Africa's total generation, growing from a 2-percent share in 2010 to 6 percent in 2040.
South Africa is the region's largest generator of electricity, accounting for 38 percent of the continent's total in 2010. Although coal currently accounts for 93 percent of South Africa's electricity generation, making the nation one of the most coal-intensive generators of electricity worldwide, the government is intent on diversifying its electric power fuel mix. The nation's 2011 Integrated Resource Plan, covering the period 2010 through 2030, calls for the construction of 9.6 gigawatts of new nuclear generation capacity, 6.3 gigawatts of new coal-fired capacity, 11.4 gigawatts of renewable capacity, and 11.0 gigawatts of unspecified capacity . Despite the pivot toward investments in energy sources other than coal, South Africa still has some major coal expansion projects in the pipeline. Eskom, South Africa's primary electric utility, expects to complete two major coal-fired plants by 2018: Kusile, at 4,800 megawatts, and Medupi, at 4,764 megawatts .
At present, South Africa's two nuclear reactors are the only commercial reactors operating in the region, accounting for about 2 percent of Africa's total electricity generation and 5 percent of South Africa's generation. Although the construction of a new pebble bed modular reactor in South Africa was canceled in 2010, the South African government's Integrated Electricity Resource Plan calls for new nuclear capacity to be built between 2023 and 2030 . In February 2013, South Africa's Energy Minister reaffirmed the country's commitment to developing nuclear capacity .
Egypt is the second-largest electricity producer in Africa, accounting for 22 percent of the continent's total generation in 2010. Ninety percent of Egypt's electricity generation comes from fossil fuels and the remaining 10 percent largely from hydropower. In addition, Egypt has recently installed a small amount of wind capacity. The country expects to diversify its electricity sector further by building nuclear power plants, but recent political unrest has slowed its progress toward nuclear power. Nevertheless, Egypt's Ministry of Electricity and Energy in March 2011 announced its intention to construct four nuclear power plants by 2025 . In 2013, the Ministry reaffirmed its intention to pursue a nuclear power program but indicated that progress is contingent on improvements in the country's political and economic circumstances, as well as approval by Egypt's president .
In the IEO2013 Reference case, generation from hydropower and generation from other marketed, on-grid renewable energy sources grow relatively slowly in Africa. Plans for several significant hydroelectric projects in the region have been advanced recently, and they may help to boost supplies of renewable energy in the mid term. The announced projects are consistent with the 2.8-percent average annual increase in hydroelectric power generation over the projection period. Excluding coal-dependent South Africa, hydroelectricity represents the largest source of electricity generation in Africa.
Although Africa has little in the way of developed solar power resources at present, its total solar electricity generation increases rapidly in the later years of the Reference case projection, from 8.1 billion kilowatthours in 2020 to 21.1 billion kilowatthours in 2040. In Ghana, construction of the largest solar project in Africa, at 155 megawatts, is scheduled to be started in 2013 and completed in 2015 . Morocco awarded a $1 billion contract to a Saudi Arabian company to complete the first phase of five solar plants, which in 2020 will provide 2,000 megawatts of capacity. The initial phase calls for construction of 160 megawatts of capacity to be completed by 2014 . In 2012, the Development Bank of Southern Africa approved funding for 762 megawatts of solar power in South Africa.
Central and South America
In the IEO2013 Reference case, electricity generation in Central and South America increases by an average of 2.2 percent per year, from 1,039 billion kilowatthours in 2010 to 2,023 billion kilowatthours in 2040. The fuel mix for electricity generation in the region is dominated by hydropower, which accounted for nearly two-thirds of total net electricity generation in 2010. Of the top five electricity-generating countries in the region, three—Brazil, Venezuela, and Paraguay—generate more than 70 percent of their total electricity from hydropower. Brazil, the region's largest economy, produces nearly one-half of the region's total electricity generation, but with strong projected economic growth, its share rises to 60 percent in 2040 (Figure 95). Although hydroelectricity accounted for nearly 80 percent of the Brazil's electricity generation in 2010 (Figure 96), the government has been trying to diversify Brazil's electricity generation fuel mix and reduce its reliance on hydropower to mitigate the risk of power shortages during times of severe drought.
In its National Energy Plan for 2010-2019, Brazil's government set a goal to build 63 gigawatts of new capacity, with nonhydroelectric capacity making up most of the additions . To help achieve that target, the government announced plans to increase nuclear power capacity, beginning with the completion of the long-idled 1.3-gigawatt Angra-3 project . Construction resumed in June 2010, and Angra-3 is scheduled to be operational at the end of 2016. Brazil also has plans to construct four new 1-gigawatt nuclear plants, scheduled to be operational before 2035 .
For Central and South American as a whole, hydropower remains the dominant energy source for electricity generation through 2040 in the IEO2013 Reference case, followed by natural gas. After Brazil, the region's next largest economies, Argentina and Venezuela, account for nearly one-quarter of the region's electricity generation. Unlike Brazil, Argentina relies on hydropower for only 28 percent of its electricity supply. Argentina is the largest producer of natural gas in South America and relies on natural gas for 50 percent of its electricity supply. Brazil and Argentina are the only countries in the region with operating nuclear power plants. Although nuclear power provides only 7 percent of its electricity generation at present, Argentina intends to increase that share when the Atucha II nuclear station commences operation before the end of 2013 .
Hydropower accounts for nearly 75 percent of Venezuela's electricity generation, with most of the remainder coming from oil and natural gas. In recent years, Venezuela's power sector has suffered from recurring blackouts as a result of underinvestment in the generation, transmission, and distribution infrastructure , leading the country's government to encourage conservation measures in an effort to reduce electricity demand . In the near term, Venezuela's nationalized electricity company, Corpoelec, working with Chinese investors, intends to upgrade the nation's transmission and distribution system at a cost of $1.3 billion .
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