Energy efficiency investments across the buildings, transport and industry sectors by 2040 are anticipated to reach around $770 billion compared to the $236 billion invested in 2017, the International Energy Agency (IEA) said in a recent report.
According to the World Energy Outlook 2018, the transport sector accounts for more than half of this investment at 54 percent. This is followed by buildings at 39 percent and industry with 7 percent, as determined in the New Policies Scenario (NPS) that aims to provide a sense of where the current policy ambitions are likely to take the energy sector.
The NPS predicts that renewable energy technologies, already a major global industry, will supply 45 percent of incremental primary energy demand up to 2040.
"China becomes the world leader in renewable energy use, followed by the European Union, the United States and India. Renewables overtake coal for power generation in the 2020s and supply 40 percent of electricity by 2040," according to the IEA's data.
Investment in renewables-based electricity will rise from $300 billion in 2017 to around $410 billion in 2040 while solar photovoltaics (PV) will account for around 35 percent of power generation investment, the data shows.
Furthermore, in the NPS, the use of clean energy to meet demand for both heat and in transport will increase.
"Renewables for heat rises by around 85 percent over the outlook to about 875 million tonnes of oil equivalent (Mtoe) in 2040," the data showed.
The share of renewables in transport will increase steadily to reach 8 percent in 2040 compared with 3.5 percent today, it added.
The report shows that owing to energy efficiency improvements in combustion engines, biofuels will deliver more useful energy over time. The contribution of renewables-based electricity will increase with electric vehicle (EV) deployment and the growing share of renewables in electricity generation.
- Global energy consumption
Global total final consumption is due to increase 12,600 Mtoe by 2040, an increase of 1.1 percent per year on average, while global energy intensity will improve by 2.3 percent per year.
According to the World Energy Outlook 2018, global total final consumption was almost 9,700 Mtoe in 2017, an increase of 1.7 percent compared with 2016.
In the NPS, "government policies and measures, including mandatory energy efficiency regulations, drive much of the improvement in energy intensity which curbs growth in energy consumption."
The NPS incorporates not just the policies and measures that governments around the world have already put in place, but also the likely effects of announced policies, including the Nationally Determined Contributions made for the Paris Agreement.
By Gulsen Cagatay