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World Energy Outlook 2018: Natural gas is on the rise

The World Energy Outlook (WEO)  released annually by the International Energy Agency, looks at the entire global energy sector making 2018 its focus on electricity, whose consumption is growing two times faster than the total energy consumption in the world. The researches point out that 2018 will see the highest CO2 emissions in history, indicating a huge disconnect between the climate change aims and real developments in the energy markets.
Updating last years’ analysis and making projections and trends through to 2040, the WEO-2018 observes a very strong change in the global energy sector. First of all, a real boom in renewables, largely due to solar PV, will globally raise their share in global energy generation from 25% today to over 40% by 2040; coal developments are going to be just the opposite; and, due to technology improvements, costs of solar PV and wind energy will continue to fall, thus increasing their competitiveness.
Another important observation of the WEO-2018 is the rapid growth of a natural gas, which is expected to leave coal behind in 2030, double LNG trade and become the second-largest fuel in the global energy mix. China has a strong influence on the gas market, becoming the largest natural gas importer of the world, overtaking Japan. Russia remains the world’s largest gas exporter.
Despite the fact that oil prices rose above $80/barrel in 2018 for the first time in four years, the oil markets “are entering a new period of growing uncertainty and volatility”, says Fatih Birol, the Executive Director of the IEA. Not least because of increasing links between energy and geopolitics. Although the shale revolution and soaring popularity of electric cars could lower oil demand, it is difficult to foresee price tendency in this sector and “another boom and bust commodity price cycle cannot be ruled out”, the researchers explain.
The geography of global energy demand across all fuels and technologies as well as in energy investment continues to move into the countries with developing economies. If in 2000 more than 40% of global energy demand was in North America and Europe, China is in first place today and India has the largest share of growth in global energy demand. Asia, in general, accounts for 50% of global growth in natural gas, 60% in solar PV and wind and accounts for more than 80% in the rise of oil. Africa is also projected to double its energy demand by 2040.
Among the good news from WEO-2018 is the fact that the number of people who have no access to electricity has fallen below one billion compared to 1.7 billion in 2000. According to the report, electricity access, as well as electric mobility and heating, could cause a 90% rise in electric power demand from now until 2040. The IEA claims that this transformation will bring new challenges for the electricity sector – from additional requirements for reliable and flexible operation of power systems to cyber security.