Highlights of the 2018 IEA Global Energy Report

Originally published in The Environmental Magazine

Every year, the International Energy Agency (IEA) puts out a report highlighting global trends in energy production, energy consumption, and energy efficiency. The report includes critical information, and serves as an excellent overarching framework for thinking about the current state of society and the planet. Included below are my key takeaways from the 2018 report, which the IEA released on March 26th, 2019.

Despite significant growth in the amount of energy generated from renewable sources, 2018’s carbon emissions were up 1.7% from the previous year.

Several factors contributed to this increase. In addition to a strong and energy-hungry growing global economy, erratic climate patterns led to a large amount of energy being required for indoor heating and cooling. As global temperatures continue to rise, we can safely assume that the amount of energy required for indoor temperature control will continue to increase. Smart home systems and modern insulation techniques can help remedy this issue.

Out of the primary electricity generation sources, coal is the largest emitter; in 2018, it was responsible for 30% of all energy related CO2 emissions.

Unfortunately, the world still generates most of its electricity by burning coal. Coal is also humanity’s second largest source of primary energy (energy harvested directly from Earth’s natural resources). However, the total portion of the world’s energy derived from coal has been slowly decreasing. In the United States and Europe, renewables and natural gas are beginning to outcomepete coal as the electricity generators of choice. In fact, coal consumption in the U.S was lower in 2018 than it has been at any point over the past 40 years, and also declined in France, Spain, the U.K, Germany, and Italy.

Most of the demand for coal is coming from Asian countries such as China, where coal generation increased by 5.3% in 2018. India, Vietnam, Malaysia, and the Philippines also increased their demand for coal, though Japan and South Korea did the opposite.

The world is now deriving the majority of its energy from natural gas.

Natural gas is very effective at generating both electricity and heat. Though coal still dominates the former category, natural gas’s versatility has made our primary source of total energy. In 2018, total gas consumption grew by 4.6%. The IEA attributes this growth to increasing energy demand, and the fact that natural gas is increasingly being used as a substitute for coal.

There are pros and cons to the increasing prevalence of natural gas. It’s undeniable that burning natural gas releases a large amount of CO2 into the atmosphere, and that extracting it from the ground has a significant environmental impact. However, power plants that use natural gas to generate electricity release smaller quantities of greenhouse gases into the atmosphere per kilowatt than coal plants. Additionally, the emissions from natural gas plants contain far fewer toxic compounds.

We can come to the general conclusion that a world powered by natural gas would be healthier than a world powered by coal, but healthier still would be a world powered by renewables.

The world’s total oil demand grew by 1.3%, but automobiles account for a smaller fraction of this increase that many would assume.

A frequently underemphasized truth is that we use oil for a tremendous number of applications other than transportation. Indeed, the IEA states that much of the growth in demand for oil in 2018 was due to the creation and expansion of petrochemical projects.

The two countries in which demand for oil grew the most were China and the United States, followed by India. Conversely, demand growth in Africa and Europe was minimal, and in the Middle East, it was negative.

China is taking serious measures to reduce the severity of its urban air quality issues. These measures, which include the development of cleaner fuels and electric buses, have no doubt helped to reduce China’s appetite for oil. Another promising piece of news from the Asian giant is that its electric car sales have been incredibly strong in recent years, increasing from 600,000 in 2017, to 1.2 million in 2018.

Renewables are making massive gains, but still account for a relatively small portion of the world’s total energy demand.

Renewable technologies provided for a fourth of the growth in global energy demand that occurred in 2018, and renewables now provide 25% of the world’s total power output (electricity generation). China has invested very heavily in renewable energy generation, and led the way in terms of the total amount of renewable generation infrastructure installed during 2018. Renewable generation also increased significantly in Europe, but growth in the United States and India was somewhat disappointing. Even together, they accounted for only 13% of 2018’s total growth in renewables.

Out of the primary renewable generation technologies, solar PV experienced the most significant amount of growth, with installed capacity increasing by 31%. Though the report didn’t give the total amount of cumulative installed solar PV capacity in 2018, the IEA website stated that it was 389 gigawatts in 2017. For reference, a gigawatt is equal to approximately 1.3 million horsepower, and is the amount of power generated by around 400 utility scale wind turbines.

Wind also made notable gains, however its growth slowed somewhat relative to years past. At the moment, wind is the second largest renewable technology, after hydropower. Together, the three aforementioned energy sources were responsible for 90% of the total growth in renewables during 2018, with bioenergy being responsible for the rest.

The IEA’s report has received significant criticism for consistently underestimating growth of renewable energy. This tendency is well documented and nicely visualized in the chart below. However, while the IEA’s predictions might be somewhat inaccurate, their statements about past trends and current levels of consumption seem to be entirely genuine.

The IEA frequently stresses the importance of transitioning to renewable sources of energy, suggesting that their overly-pessimistic assertions about the growth of renewables stem from honest calculation errors as opposed to a politically motivated agenda.

Efficiency improved slightly, but the rate of improvement has been slowing for the past three years.

Analysts measure global energy efficiency using a metric called energy intensity. The term refers to the amount of energy it takes to create a unit of GDP and is expressed as the fraction (Unit of energy/Unit of currency). For example, if an economy required 32 megajoules of energy to create one dollar of GDP, its energy intensity would be 32/1, or 32. Therefore, a low energy intensity is indicative of an economy that efficiently uses energy to generate market activity. In 2018, the global economy required 1.3% less energy to generate a unit of GDP than it did in the previous year. However, energy intensity decreased by an estimated 1.7% in 2017, and by nearly 3.0% in 2015, which clearly demonstrates that we could and should be doing much better. The IEA feels that weak energy policies, in addition to unusual weather conditions, are largely to blame for these less than extraordinary gains in efficiency.