Introduction to Energy Essentials: Insight into Nuclear, Renewable, and Non-Renewable Energies

Chapter 1

Population growth driving energy demand

Abstract

Seven billion people shape the world's energy system and have a direct impact on the fundamental drivers of energy demand. Energy impacts the economy as well as security and environmental goals. Energy solutions can vary over time and circumstances. Think about how access to energy affects your own life, and how that translates to billions of other people around the world. Global energy demand will continue to rise through 2040, reflecting its fundamental link to growing prosperity and better living standards for an increasing population worldwide.

Keywords

Population growth; Energy demand; GDP; OECD; HDI; United Nations Development Program

Seven billion people shape the world's energy system and have a direct impact on the fundamental drivers of energy demand. Energy impacts the economy as well as security and environmental goals. Energy solutions can vary over time and circumstances. Think about how access to energy affects your own life, and how that translates to billions of other people around the world. Global energy demand will continue to rise through 2040, reflecting its fundamental link to growing prosperity and better living standards for an increasing population worldwide.

1.1 Introduction

Energy efficiency improvements will help curb the growth in global energy demand to about 25% over the period to 2040, while global economic output nearly doubles. To put this in perspective, if world energy demand grew as fast as estimated gross domestic product (GDP), energy demand growth could be about four times the projected amount.

Emerging markets in non-OECD (Organization for Economic Co-operation and Development) nations will account for essentially all energy demand growth, led by the expanding economies in the Asia-Pacific region.

Note that the OECD is an intergovernmental economic organization with 36 member countries (see Fig. 1.1) [1], founded in 1961 to stimulate economic progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices, and coordinate domestic and international policies of its members.

Fig. 1.1 World Bank high-income economies in 2016.

Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries (see Fig. 1.2). As of 2017, the OECD member states collectively comprised 62.2% of global nominal GDP (US$49.6 trillion) [2] and 42.8% of global GDP (Int$54.2 trillion) at purchasing power parity [3]. OECD is an official United Nations observer.

Fig. 1.2 Human Development Index.

Note also that the HDI is a statistic (composite index) of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development. A country scores higher HDI when the lifespan is higher, the education level is higher, and the GDP per capita is higher. The HDI was developed by Pakistani economist Mahbub ul Haq and Indian economist Amartya Sen, which was further used to measure the country's development by the United Nations Development Program.

Continuing urbanization and a significant expansion of the middle class, particularly in China and India, will help drive this trend, highlighted by greater access to modern energy in homes, rising industrial demand, and significant increases in personal and commercial transportation needs.

Electrification and gradual decarbonization continue as significant global trends. Energy demand for power generation accounts for about 50% of global demand growth. Energy sources shift toward cleaner fuels such as:

1. Wind energy.

2. Solar energy.

3. Hydropower energy.

4. Geothermal energy.

5. Natural gas energy.

6. Renewables energy and nuclear power.

In next few chapters of this volume, we will be discussing all these clean sources of energy and to some degree in more details we are looking at renewables energy and nuclear power plant of Generation IV, known as GEN IV in particular in area of small modular reactors (SMRs) by describing all six types of Generation IV nuclear power plants as well.

1.2 Energy demand projection

A significant energy transition is underway, and many factors will shape the world's energy future. These include government ambitions and policies that seek to promote prosperity while also addressing the risks of climate change. The recent Paris Agreement [4] on climate change provided significant insights on governments' intentions to reduce greenhouse gas (GHG) emissions through the inclusion in the agreement of nationally determined contributions (NDCs). Policies adopted to support NDCs will likely affect supply and use of energy across society.

NDCs are a cornerstone of the Paris Agreement on climate change. They set out the actions that countries plan to undertake to achieve the agreement's objectives, focused on limiting the rise in average global temperatures to well below 2°C, ideally to 1.5°C.

As part of Paris Agreement, the untapped potential for climate action, the renewable energy in NDCs is taken under consideration. Renewable energy—increasingly recognized as a key climate solution—features prominently in the first round NDCs arising from the 2015 agreement. Of the 194 Parties to the United Nations Framework Convention on Climate Change that submitted NDCs, 145 referred to renewables as a way to mitigate climate change, while 109 cited specific renewable energy targets. Countries have the opportunity, however, to significantly strengthen their targets for renewables in the next round of NDCs.

The International Renewable Energy Agency (IRENA) has analyzed NDCs in relation to national energy plans and actual deployment trends. In many cases, NDCs have not kept up with recent, rapid growth in renewables, the report finds. Even countries that lacked targets in their NDCs had ambitious plans for renewables in the energy sector. Fig. 1.3 is illustration of total investment needed by 2030 for the implementation of renewable energy targets in current NDCs based on USD billion.

Fig. 1.3 Total investment by 2030 in renewable energy in current NDCs.

Over USD 1.7 trillion would be needed by 2030 to implement renewable energy targets contained in NDCs worldwide. At least 1.3 terawatts (TW) of renewable power capacity would be added globally by 2030 as a result of NDC implementation, amounting to a 76% increase.

However, such growth expectations lag behind actual trends, as well as falling short of the ambitions expressed in national energy plans. The cost-effective potential for renewables, meanwhile, is much higher than what is captured in current NDCs. Rapid deployment of renewables, coupled with energy efficiency, could achieve around 90% of the emission reductions in the energy sector needed by 2050, while at the same time advancing economic growth and development.

Upgraded NDCs could build on recent growth rates, pick up targets from national energy plans, and more closely reflect cost-effective potential for renewables. This would strengthen the effectiveness of the Paris Agreement and help significantly to limit the global temperature rise, IRENA's report finds.

Consequently, to support economic progress and make substantial progress on the climate goals identified in the Paris Agreement, well-designed and transparent policy approaches that carefully weigh costs and benefits are needed. Such policies are likely to help manage the risks of climate change while also enabling societies to pursue other high-priority goals—including clean air and water, access to reliable, affordable energy, and economic progress for all people.

Technology will also be vital to improve living standards while addressing climate risks. Advances continue to reshape the energy playing field. Many technologies not prevalent 5 to 10 years ago have a more significant role today, and their impacts will continue to expand. Examples include wind and solar power, unconventional oil and gas development, and electric cars. Meeting the dual challenge of mitigating the risks of climate change while boosting standards of living will require additional technology advances.

While policies and technologies help shape living standards and the evolution of energy, they also disrupt the status quo and can cause uncertainty and unexpected consequences. Accordingly, as part of the Outlook development process, we develop and use sensitivities to help our understanding of possible energy outcomes.

Each year companies such as ExxonMobil analyzes and updates its long-term view on energy supply and demand. Why is this important? Simply because energy is fundamental to modern life, thus in their 2018 Outlook for energy as a view to 2040, ExxonMobil in this year Outlook suggested and included several sensitivities on specific areas of interest to provide greater perspective on how changes to our base Outlook assumptions could affect the energy landscape.

This year's Outlook also includes a new section, Pursuing a 2°C Pathway. This section utilizes work coordinated by the Energy Modeling Forum at Stanford University [5]. It provides a view of potential pathways toward a 2°C climate goal, and the implications such pathways might have in terms of global energy intensity, carbon intensity of the world's energy mix and global demand for various energy sources. The section concludes with a discussion of the need to pursue practical, cost-effective solutions to address multiple goals simultaneously. The Outlook anticipates significant changes through 2040 across the world to boost living standards, reshape the use of energy, broaden access to abundant energy supplies, and accelerate decarbonization of the world's energy system to address the risk of climate change.

The ExxonMobil also reported in their 2018 Outlook for Energy an Excel data pages that is downloadable from the company website as well.

1.3 A role for everyone

Key trends that will play a defining role in our global energy landscape through 2040 are:

1. Energy powers modern economies and living standards

By 2030, the world's economic middle class will likely expand from 3 billion to more than 5 billion people. This growth will coincide with vastly improved living standards, resulting in rising energy use in many developing countries as people develop modern businesses and gain access to cars, appliances, and air-conditioned homes.

2. Global energy needs rise about 25%, led by non-OECD nations

Despite efficiency gains, global energy demand will likely increase nearly 25%. Nearly all growth will be in non-OECD countries (e.g., China and India), where demand will likely increase about 40%, or about the same amount of energy used in the Americas today.

3. Electricity demand nearly doubles in non-OECD nations

Human activity continues to be dependent on reliable supplies of electricity. Global electricity demand will rise by 60% between 2016 and 2040, led by a near doubling of power demand in non-OECD countries.

4. Electricity from solar and wind increases about 400%

Among the most rapidly expanding energy supplies will be electricity from solar and wind, together growing about 400%. The combined share of solar and wind to global electricity supplies is likely to triple by 2040, helping the CO2 intensity of delivered electricity to fall more than 30%.

5. Natural gas expands role to meet a wide variety of needs

The abundance and versatility of natural gas make it a valuable energy source to meet a wide variety of needs while also helping the world shift to less carbon-intensive sources of energy. Natural gas use is likely to increase more than any other energy source, with about half its growth for electricity generation.

6. Oil plays a leading role to aid mobility and modern products

More electric cars and efficiency improvements in conventional engines will likely lead to a peak in liquid fuels use by the world's light-duty vehicle fleet by 2030. However, oil will continue to play a leading role in the world's energy mix, with growing demand driven by commercial transportation and the chemical industry.

7. Decarbonization of the world's energy system will accelerate

As the world's economy nearly doubles by 2040, energy efficiency gains and a shift to less carbon-intensive sources of energy will contribute to a nearly 45% decline in the carbon intensity of global GDP. Global energy-related CO2 emissions will likely peak by 2040 at about 10% above the 2016 level.

1.4 Behind the scenes: how we forecast to 2040

Any energy produced company such as ExxonMobil uses a data-driven technique, from bottom-up approach to produce a most-likely view of future energy demand and supply and generates Use Cases as it can be seen listed below as a foundation for such forecasting. They create a starting point for our projections using International Energy Agency (IEA) annual data, along with third-party data and recent energy trends.

• Economic growth

Since population and living standards drive energy demand, we forecast demographic and economic trends for about 100 regions covering the world.

• Demand for services

These drivers, along with consumer preferences, help us determine demand for energy across 15 sectors, covering needs for personal mobility, electricity in buildings, production of steel, cement and chemicals, plus many others.

• Energy sources

We then match the demand for energy services with about 20 types of energy (e.g., diesel), taking into account potential evolution of technology, policies, infrastructure, and more.

• Policy/tech changes

We actively monitor changes in technology and policies and compare our views of the Outlook to a variety of third-party estimates.

• Test uncertainty

We also run sensitivities (i.e., changes to our base assumptions) to assess the impact on our forecast if things were to play out differently.

1.4.1 Global energy demand varies by sector

The following Charts as Fig. 1.4 is indication of global energy demand that varies by each industrial sector along with summary of such energy demand by sector.

Fig. 1.4 Illustration of global energy demand varies by sector.

As part of this energy demand globally by each sector, we can list the following as:

• Energy used in each sector reflects economic supply options and their general fitness for purpose.

• Electricity generation is the largest and fastest-growing demand sector, reflecting strong growth in global electricity demand.

• A wide variety of energy types will support electricity generation, with natural gas, renewables, and nuclear increasing their share.

• Natural gas demand increases significantly, and gains share in all sectors.

• Oil demand grows to support commercial transportation and chemical needs.

1.4.2 Energy demand shifts toward non-OECD

Fig. 1.5 is depiction of shift of energy demand toward non-OECD along with some highlighted description in bullet point form as:

Fig. 1.5 Illustration of energy demand shifts toward non-OECD.

• Global demand reaches 680 quadrillion British thermal units (BTUs) in 2040, up nearly 25%.

• Non-OECD share of global energy demand reaches about 70% in 2040, as efficiency gains and slowing economic growth in the United States and OECD nations help keep energy demand relatively flat.

• China and India contribute about 45% of world energy demand growth.

• The combined share of energy used in the United States and in European OECD nations will decline from about 30% in 2016 to close to 20% in 2040, similar to China's share of world energy demand.

1.4.3 Global energy mix shifts to lower-carbon fuels

Fig. 1.6 is illustration of global energy mix driving the lower-carbon fuels with some high-level consideration accordingly.

Fig. 1.6 Illustration of global energy mix shifts to lower-carbon fuels.

• Renewables and nuclear see strong growth, contributing close to 40% of incremental energy supplies to meet demand growth.

• Natural gas grows the most of any energy type, reaching a quarter of all demand.

• Oil will continue to play a leading role in the world's energy mix, with growing demand driven by commercial transportation needs and feedstock requirements for the chemicals industry.

• Coal use remains significant in parts of the world but loses substantial share as the world transitions toward energy sources with lower emissions.

1.5 Transportation energy projections

Advancements in transportation have shrunk our world, while opening up new vistas and possibilities. One consequence of billions of people joining the global middle class in the next quarter century is that it will lead to greater travel, additional cars on the road and increased commercial activity.

Global transportation-related energy demand is projected to increase by close to 30%. At the same time, total miles traveled per year by cars, sport utility vehicles (SUVs), and light trucks will increase about 60%, reaching about 14 trillion in 2040. As personal mobility increases, average new-car fuel economy (including SUVs and light trucks) will improve as well, rising from about 30 miles per gallon now to close to 50 miles per gallon in 2040.

The growth in transportation energy demand is expected to account for about 60% of the growth in liquids fuel demand. Liquids demand for light-duty vehicles is expected to be relatively flat to 2040, reflecting better fleet fuel economy and significant growth in electric cars.

1.5.1 Transportation energy demand growth driven by commerce

Fig. 1.7 is plots of global sector demand—million barrels per day oil equivalent (MBDOE) along with holistic points as [6-8]:

Fig. 1.7 Illustration of transportation energy demand growth driven by commerce.

• Global transportation-related energy demand grows close to 30% from 2016 to 2040.

• Personal mobility demands continue to increase, but higher efficiency and more electric vehicles lead to a peak and decline in light-duty vehicle energy demand.

• Growth in economic activity and personal income drives increasing trade of goods and services, leading to higher energy demand in the commercial transportation sector.

• Heavy-duty vehicle growth is the largest sector by volume, but aviation grows the largest by percentage.

1.5.2 Global transportation energy demand relative to GDP

Fig. 1.8 is showing the plots of global transportation energy demand in relative to GDP between period 1990 and project year of 2040 along with high-level points.

Fig. 1.8 Illustration of global transportation energy demand relative to GDP.

• Growth in personal mobility (vehicle-miles traveled) and commercial transportation services (ton-miles of freight and passenger-miles of air travel) has tracked with GDP.

• Continued economic growth, particularly in non-OECD countries, will result in increased demand for all transportation services.

• Recent trends show a decoupling of economic growth and transportation energy demand, reflecting growing efficiency.

• Significant increases in future fuel economy across all transportation modes will lead to a further decoupling of transportation services and energy demand.

1.5.3 Commercial transportation grows in all aspects

Fig. 1.9 is showing the plots where the commercial transportation grows in all aspects as per MBDOE along with high-level points as:

Fig. 1.9 Illustration of commercial transportation grows in all aspects.

• Economic and population growth is concentrated in non-OECD countries, which leads to the biggest growth in commercial transportation services in these regions.

• Asia-Pacific leads growth, rising to 40% of total sector's energy demand.

• Efficiency gains resulting from improvements in fuels, engine design, aerodynamics, body design, and logistics across commercial modes of travel lead to significant reductions in the rate of energy demand growth.

• Electrification in most commercial transportation grows slowly due to upfront costs, range limitations, payload requirements, and infrastructure development.

1.5.4 Access to personal mobility increase

Fig. 1.10 is showing the charts of access to personal mobility increases by plotting vehicles per thousand people along with high-level points as well and they are:

Fig. 1.10 Illustration of access to personal mobility increases.

• As incomes rise, individuals want more personal mobility, so demand for cars and motorcycles increases.

• Motorcycles offer a lower-cost entry point to personal mobility, with ownership particularly high in Asia-Pacific.

• Car ownership significantly increases in non-OECD countries, with Asia-Pacific leading the growth.

• In the OECD, while total vehicle ownership increases significantly, the number of cars per 1000 people increases only about 10%.

1.5.5 Efficiency mitigates light-duty demand growth

Fig. 1.11 is showing the charts of efficiency mitigation for light-duty demand growth and high-level points listed as below:

Fig. 1.11 Illustration of efficiency mitigation light-duty demand growth.

• Increasing access to vehicles drives a worldwide increase in personal mobility-related energy demand growth.

• Assuming the current fleet mix and fuel efficiency, there would be a significant increase in energy demand for personal mobility.

• However, major gains in the fuel efficiency of conventional vehicles leads to a major reduction in the energy needed.

• Changes in the fleet mix (e.g., increasing hybrids and electric vehicles) play a much smaller role in limiting energy demand for light-duty vehicles.

Plots in Fig. 1.11 as it can be seen present the global light-duty vehicle transportation demand as per MBDOE.

1.5.6 Electric vehicles grow rapidly

Fig. 1.12 is showing the charts of rapid growth of electric vehicles fleet worldwide with high-level points as listed here:

Fig. 1.12 Illustration of electric vehicles grow rapidly.

• Currently, there are approximately 2 million electric vehicles in the global fleet, or about 0.2% of the total.

• Recently, some car manufacturers and governments have announced plans to limit future vehicle sales to those with an electric motor, including hybrids plug-in hybrids and battery electric vehicles.

• The electric vehicle fleet will see strong growth driven by decreasing battery costs, increasing model availability, and continued support from government policies.

• Future battery costs and government policies are uncertain, hence there is a wide range of perspectives on future electric vehicle growth, with third-party estimates for 2040 ranging from a factor of three higher and lower than the Outlook.

Plots in Fig. 1.12 as it can be seen present the worldwide electric vehicle fleet—million cars.

1.5.7 Liquid demand trajectory uncertain but resilient

Plots in Fig. 1.13 as it can be seen present liquids demand trajectory uncertain but resilient for world as per MBDOE.

Fig. 1.13 Illustration of liquids demand trajectory uncertain but resilient.

The high-level points are listed as:

• Sensitivities help assess potential impacts to light-duty liquids demand using alternate assumptions around electric vehicle penetration, changes in fuel efficiency or broader mobility trends.

• For every additional 100 million electric vehicles on the road in 2040, liquids demand could fall by ∼1.2 million barrels per day; if the entire light-duty fleet is electrified in 2040, total liquids demand could be approximately the same as in 2013.

• Alternatively, recent consumer preferences have slowed the increase in fuel efficiency of new vehicle sales in both the OECD and non-OECD.

• While the Outlook forecasts new-car fuel efficiency trends will be well aligned with government policies, a continuation of recent trends in consumer preferences could add more than 2 million barrels per day of liquids demand by 2040.

Note that in Fig. 1.13 shaded ranges are indicative of potential shifts in demand relative to base Outlook reported by ExxonMobil Corporation in 2018.

1.6 Residential and commercial energy projections

As populations grow and prosperity rises around the world, we will need more energy to power homes, offices, schools, shopping centers, and hospitals. Combined residential and commercial energy demand is projected to rise by more than 20% through 2040. About 90% of this demand growth will be met by electricity. Led by the growing economies of non-OECD nations, average worldwide household electricity use will rise about 30% between 2016 and 2040.

Energy efficiency plays a big role within the residential and commercial sectors as modern appliances, advanced materials, and policies shape the future.

1.6.1 Residential and commercial demand shifts to non-OECD

Plots in Fig. 1.14 as it illustrates are the residential and commercial shifts to non-OECD. The high-level points are listed as:

Fig. 1.14 Illustration of residential and commercial demand to non-OECD.

• Growth in households, rising prosperity, and expanding commercial activity will spur demand for lighting, heat, and power in homes and offices.

• Residential and commercial energy demand will rise over 20% by 2040, consistent with overall population growth.

• Essentially all growth will be in non-OECD nations, where demand will rise close to 40%.

• Africa and China will each account for about 30% of the increase in residential and commercial energy demand.

Note that each non-OECD are painted in different color.

1.6.2 Residential energy use reflects efficiency gains

Fig. 1.15 is presenting the residential energy use reflects efficiency gains along with the top-level points as follow:

Fig. 1.15 Illustration of residential energy use reflects efficiency gains.

• Household energy use continues to improve, reflecting more efficient buildings, appliances, and consumer products.

• Demand for electricity is growing across all regions.

• People in Africa and Asia-Pacific still rely on biomass products to a large degree; more than 2.5 billion people worldwide lack access to modern energy for cooking, and about 1 billion people lack access to electricity.

This figure is categorized by type of energy source.

1.6.3 Electricity demand surges

Fig. 1.16 is presenting the electricity demand surges as part of residential and commercial energy demand for world in quadrillion BTUs with top-level