Renewable energy is on the rise, but fossil fuels will still play a key role in providing the world’s base-load energy needs over the next 20 years.
Research from Credit Suisse analyst Jens Zimmermann shows how the shift looks set to play out, based on estimates from the International Energy Agency (IEA).
Coal’s share of the fuel mix is forecast to decline from 41% in 2013 to 30% in 2040. Those declines are expected to be fully offset by renewable energy sources, which are set to rise from a 6% to 18% over the same period.
“Nevertheless, more than half (54%) of the electricity will still be produced in thermal power plants using hydrocarbons (primarily coal and gas) in 2040, based on IEA estimates,” Zimmerman said.
Elsewhere, “the share of electricity generated from oil and gas (24%-26%), nuclear energy (11%-12%) and hydro (16%) is seen as remaining fairly stable between 2013 and 2040,” Zimmermann said.
Accounting for coal along with oil and gas, the total contribution from fossil fuels in global electricity production is forecast to fall from 67% in 2013 to 54% in 2040.
The forecast decline is reflective of efforts by policy makers in developed economies to boost production inputs adhering to stricter environmental standards.