Latest news with #GlobalEnergyReview2025
Forbes
08-04-2025
- Business
- Forbes
Why Aren't Gas Industry Giants Jumping On AI Power?
. So why is the oil and gas industry interested in providing electrical power that can be generated by gas turbines? First, learned industry people are predicting peak oil around 2030; oil declines after this. Second, natural gas is likely to grow, particularly LNG (liquified naturel gas). But there are headwinds: uncertainties in LNG due to such long-term investments, and solar/storage batteries are now cheaper than new-build gas power plants. Third, in their Global Energy Review 2025, IEA (the International Energy Agency) shows that almost all regions of the world saw an acceleration in the rate of electricity consumption growth in 2024 compared with the annual average from 2012 to 2022. Globally, electricity consumption increased by 1,080 TWh (TerraWatt hours), nearly twice the average of the previous ten years. This was caused by record global heat and cool air conditioning, rising industry consumption, electrification of transport, and growth of data centers and AI (artificial intelligence). The IEA report has an eye-popping interpretation by Roger Pielke. A global increase of 1,080 TWh in 2024 is the equivalent of bringing online 135 new nuclear reactors in 2024. This sudden growth of electrical power is clearly a big deal because it opens doors for new investment in natural gas, solar and batteries, geothermal, and nuclear technologies. Hence the prospect of a Big-Gas jump on AI power. But this is the global picture, what about the U.S. situation? Projected electricity demand in U.S. through 2040. In the U.S., one estimate is that 5,000 new data centers will be needed to feed the new AI industry. One data center uses an amount of power equal to that used in 10,000 houses. By 2040, in a milestone report by S&P Global, to meet U.S. electrical needs would require both renewables plus battery storage and gas-fired energy: an extra 940 GW (GigaWatt) of the former, and about 80 GW of the latter. 'Adding above 900 GW to the supply mix through 2040, renewables and batteries are by far the main source of supply … on a nameplate basis given their availability, low-cost, preference from consumers, and policy support.' Altogether, about 1,000 GW of extra power (940 GW + 80 GW) by 2040 converts to 81.9 bcfd (billion cubic feet per day) of gas wells. For comparison, the U.S. currently produces ~100 bcfd of natural gas, so 81.9 bcfd would be a huge jump, akin to the industry's enormous present-day supply of U.S. gas. Although there are reasons why it's not feasible to pull this off, a potential Big-Gas jump on AI power has got to be stirring attention. The big data tech firms Microsoft, Google, Meta, Amazon, initially favored carbon-free sources of electricity for their data centers. When AI appeared, some firms even looked to uncommercial startup sources such as geothermal and small nuclear reactors (SMRs). But the new AI power requirements are immense, and now these digital companies are embracing fossil natural gas. Texas is a case in point. Texas has the second largest number of data centers, after Virginia, partly because the cost of business is low. One observer speculated 56 GW of electrical power would be needed in Texas. The S&P Global study estimated the U.S. would need 1,000 GW of extra power by 2040: 940 GW of renewable/batteries and 80 GW of gas-fired power. While in the U.S. renewables like SoWiBess (solar, wind, and batteries for storage) are continuing to grow, the gas side of the equation has serious headwinds, as described below. Still, some companies have been proactive. Engine No. 1, famous for its successful clash with ExxonMobil in 2021 to elect new candidates to the board, has booked gas turbines from GE Vernova, a manufacturer. This means any other buyer will have to wait until 2028. Engine No. 1 has joined with developer Crusoe in a project near Abilene, Texas, which is rumored to be a part of the $500 billion Stargate enterprise supported by Trump. The Houston Chronicle also reported that Big-Gas companies are moving in. Diamondback Energy, out of Midland, wants to develop a gas-fired power plant in the Permian basin. Chevron has partnered with Engine No. 1 and GE Vernova to leverage their gas turbines. ExxonMobil are in, but haven't revealed their nascent projects. NRG Energy, who develops gas-fired power plants, has acquired six power plants last month, the first in a decade. To generate more electricity for AI, it makes sense to expand commercially proven SoWiBess renewables rather than natural gas. Battery storage prices have come down significantly since 2023, and this may continue. With this, the cost advantage lies with solar and batteries—and it's also cleaner energy than fossil gas plants, as desired by the big digital companies. Gas is likely to be a small part of the solution, especially since the U.S. produces more than any other nation. But urgent new gas-fired plants for AI power will be difficult to come by because there currently exists a gas turbine backlog. GE's backlog of gas turbines was $73 billion as of January 1, 2025. Nuclear SMRs and geothermal are barely proven commercially, and are expensive. Altogether, cheap and reliable clean electricity for AI data centers can best be provided by solar and battery storage, as the S&P Global study found. In the U.S., renewables (excluding nuclear) accounted for about 90% of new installed capacity in 2024. In this, the market has spoken about accessible power for AI data centers. Renewables plus battery storage (SoWiBess) now make up 30% of U.S. power capacity. In the U.S., installed solar capacity now totals 220 GW. Batteries doubled in 2024 to 29 GW, and are likely to grow almost 50% in 2025. This dispatchable energy from batteries stabilizes the U.S. power supply. The U.S. has only to look down under to Australia to see how in 16 years one state has gone from zero to 75% renewable electricity, and it expects to reach 100% by 2027. Discerning statements have been made by people in the know about electrical power: gas versus renewables. One by Brian Faist of Avangrid, who owns the solar farm at Waco, Texas, which will provide power for Meta's new data center at Temple: 'You have development cycles for thermal [gas] plants that are pretty long. For wind, that's pretty long. Solar is just the fastest.' And from Jason Grumet, CEO of American Clean Power Association, in a panel at CERAWeek: 'The energy that is moving forward in this country right now is clean power.'
Forbes
04-04-2025
- Business
- Forbes
3 Drivers Of Global Energy Demand Everyone Must Know
What is driving global energy demand? Getty Images Every year, the world consumes a significant amount of energy. This energy is used not just to power our homes but also to power our transport and the fuels used for industrial purposes. Beyond the energy used by different sectors—household, industry, transport—regional trends also play a significant role in energy demand—a term used interchangeably with energy consumption to refer to the energy used, often varying across key countries. For instance, China and India were the top two countries with the most significant growth in energy demand in absolute terms in 2024. Last week, the International Energy Agency released its Global Energy Review 2025— a flagship document that helps us understand these dynamics more closely. The review by the IEA is the first global assessment of trends across the energy sector. The data is sourced from trusted sources such as power system operators worldwide, statistical releases from national energy administrators, etc., making the insights from the report significant to understanding how energy is consumed across the work. This publication is distinct from the World Energy Outlook, which the IEA releases annually, a long-term outlook based on future scenarios. Among the many insights in the new report, three trends in global energy demand particularly stand out. They are interesting because they impacted last year's trends and offer a glimpse into the hotspots of energy demand in the coming years. Therefore, experts, innovators, policymakers, and the private sector should watch out for these areas to help address future challenges in energy demand. The past year was the hottest year the world experienced. In addition to the gradual increase in temperatures due to climate change, the increase in extreme heat can also be attributed to El Nina, which causes the warming of the waters in the Pacific Ocean every few years. People use more air conditioners to cope with the heat, increasing energy demand. Cooling needs were roughly 20% higher last year compared to the long-term average between 2000 and 2020, according to the new IEA report. India, China and the US were three regions with high cooling demand. There is a direct connection between cooling demand and coal use. The increase in temperature accounted for almost the entire growth in coal demand last year, according to the new IEA report. This increase in demand happened because some countries rely on coal-fired power plants to meet the surge in power demand on hot days. The increase in coal use to meet the surge in energy demand for cooling underlines the need to think of innovative ways to make cooling needs more clean. There is potential to make cooling more efficient. India and China will account for over half of the total stock of air conditioners by 2040. Some older estimates of IEA suggest that by the year 2050, efficient cooling can reduce the global energy demand for cooling by 45%. Data centers are emerging as significant consumers of global energy demand, with growth concentrated in a few countries. The installed capacity of data centers has increased by 20% in the last year, mainly in the United States and China, according to the report. Although the IEA report released last week does not explore energy used by data centers in as much detail, earlier reports by IEA raise concerns about the potential impacts of energy demands from these centers for the power sector and the need to keep a closer watch on how they evolve. A report released last year by IEA mentioned that large hyper-scale data centers have an annual electricity consumption equivalent to the annual energy consumption of 350,000 to 400,000 electric cars. These centers account for only about 1% of global electricity consumption today, but the impact can be significant at a local level—something to watch out for. In some countries, such as Ireland, electricity use from data centers is already a big part of total electricity demand, accounting for over 20% of all electricity consumption, according to last year's report. On the other hand, data centers in large economies like the United States, China and the European Union account for only around 2-4% of total electricity consumption today. However, their local impact can be pronounced because they tend to be spatially concentrated. The sector has already surpassed 10% of electricity consumption in at least five US states. Although overall oil demand slowed, petrochemical feedstock emerged as a key driver in the sector. Oil came down to less than 30% of the energy demand 50 years after peaking at 46%, according to the report. The slowing down is attributed to many reasons, such as post-pandemic ease-out and the increase in the impact of electric vehicles. Petrochemical demand in oil consumption, increased by 12% over the previous five years, with growth primarily concentrated in China. Petrochemicals are used in products around us: plastic packaging is used for food, ammonia is used in fertilizers, synthetic rubber is used for tires, and many laundry detergents are used. The Chinese petrochemical industry is driving the growth of global oil demand. From being nonexistent in the market, it now accounts for 50% of industrial growth in the space, according to a 2023 IEA report that analyzed the Chinese petrochemical industry. The above petrochemical trend points to an interesting phenomenon: the future of oil is in petrochemicals. This a direction that some academic journals, such as this one in Energy Research & Social Science, have already started to point towards. The dominance of petrochemical demand in driving oil demand also raises a crucial issue: fossil-based plastics may continue expanding as the energy system decarbonizes. Thus, the problem that needs to be tackled is gradually moving away from fossil use in the chemical industry towards greener alternatives. At present, options such as green feedstock are either unavailable or not yet cost-competitive at scale. The three areas discussed above, from cooling and data centers to petrochemicals, are fascinating areas to keep on the radar for those interested in learning about the drivers of energy demand and the energy transition space. Addressing the challenges in these areas will lead the course of the future of energy transition and our ability to meet global climate goals.
Forbes
24-03-2025
- Business
- Forbes
IEA Global Review Details A Sputtering Energy Transition
Fatih Birol, executive director of the International Energy Agency (IEA), at the World Economic ... More Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 21, 2025. The annual Davos gathering of political leaders, top executives and celebrities runs from January 20 to 24. Photographer: Stefan Wermuth/Bloomberg Everyone engaged in business or policy activities related to the aspirational energy transition recognizes the reality that no such transition is possible without the full buy-in by the world's two most populous nations, China and India. It's a stark reality that just isn't happening, which means the transition desired by western governments and global organizations like the United Nations and World Economic Forum isn't happening, either. Intentionally or not, this stubborn reality is highlighted by the Global Energy Review 2025 released Monday by the International Energy Agency (IEA). The report's key findings highlight the fact that 2024 was a year for record growth in the solar power sector, which accounted for 38% of total energy supply growth globally. Less highlighted, though is the fact that global demand for every form of fossil fuel - oil, natural gas, and coal - also rose to new record highs in 2024. The main driver of the rising demand for all fossil fuels was, to no one's surprise, China, followed by India. This is especially true with coal, of which China alone consumes more than every other nation combined. As if to highlight its own role as a rising user of coal, India's Ministry of Coal put out a post on X celebrating its having reached the milestone of 1 billion tonnes of coal production on Sunday, 24 hours ahead of the IEA's publishing of its annual report. Celebratory announcement by India's Ministry of Coal honoring historic milestone of 1 billion tonnes ... More of coal production, March 23, 2025. 'India has crossed a monumental 1 BILLION TONNES of coal production! With cutting-edge technologies and efficient methods, we've not only increased production but also ensured sustainable and responsible mining,' G. Kishan Reddy, India's Union Minister For Coal and Mines, said in the post. 'This achievement will fuel our increasing power demands, drive economic growth, and ensure a brighter future for every Indian. Under the visionary leadership of Hon'ble PM Shri Narendra Modi, India is on its path to becoming a global energy leader.' That is assuredly true, but no one should think India is also on its path to becoming a global leader in this energy transition, a planned endeavor in which governments allocate trillions of dollars annually to subsidies for alternative forms of energy in an effort to eliminate the very fuels - coal, oil, and natural gas - which are driving the robust growth and modernization of India's economy. Yes, both India and China are rapidly growing their own renewable energy sectors, but both are seeing even more rapid growth in fossil fuel usage at the same time. Despite these realities, China maintains it will somehow achieve net-zero emissions by 2060, while India clings to the less ambitious target of reaching that goal by 2070. The real trends seen in those two countries are in fact global trends, as shown in the IEA chart below. While renewables like solar and wind did account for a robust 38% of global energy demand growth in 2024, fossil fuels accounted for 54%, with nuclear filling the remaining 8% of increase for the year. Chart by IEA illustrating Global Growth Rates and Share by Energy Source for 2024 Thus, despite trillions of dollars in global subsidies for renewables having been allocated by governments in this century, these alternative sources still fail to account for even half the rate of increase in energy demand. Just one more bit of evidence that we are not in the midst of an energy transition, but a period of energy addition and innovation instead. One unsurprising result of this continuing reality is that global CO2 emissions rose again in 2024 at essentially the same pace they've risen since around 1950, as seen in the chart below. IEA Global Change in CO2 Emissions Chart - Global Energy Review 2025 While some had predicted that the sudden drop in CO2 emissions during 2020 caused by the global response to the COVID-19 pandemic would result in a slowing if this trend, that has not been the case. Instead, thanks to a rapid recovery in the global economy, the rate of emissions growth simply resumed its previous path starting in 2022. Predictably, as seen in this IEA chart, China and, to a lesser extent, India are the primary drivers of this ongoing emissions increase. By contrast, the United States, the European Union, and Japan have continued to steadily cut their emissions in this century via various strategies they've adopted. IEA CO2 Emissions Per Capita and by Region, 2000 - 2024 As is always the case in these annual Global Energy Reviews, this one is filled with an almost bewildering wealth of data and analysis about the global energy situation. But no amount of verbiage and data can distract from the inescapable conclusion that this most ambitious of all of mankind's periodic energy transitions is shaping up exactly the way those prior transitions have turned out: Not as a transformative process in which a pre-existing form of energy is eliminated, but as an additive process in which new forms of energy are stacked atop the others to help satisfy inexorably rising energy demand. As best-selling author Daniel Yergin points out in a recent piece about the transition in Foreign Affairs, a transition from using wood as a heating source for iron production began in England in 1708, when an iron worker noticed that coal was a far more efficient heating fuel for that purpose. The ambitious global move to transition from a coal-based economy to one based on oil in turn began around the turn of the 20th century. Yet, in 2024, the world still used record amounts of not only oil and coal, but also a record amount of wood for energy. Reality dictated that the identified alternatives to those pre-existing energy sources were not adequate to eliminate them in the face of rising energy demand. It is increasingly apparent now that alternatives chosen by western and global governments - wind, solar, and electric vehicles - are not adequate in and of themselves to eliminate the various pre-existing forms of energy, and that in some instances - offshore wind is a prime example - governments have been subsidizing failure. If these alternatives were adequate, affordable, and scalable replacements, then India and China would find it easier to truly buy into the global effort while sustaining their economic growth. Thus, it is also increasingly apparent that any successful effort to eliminate fossil fuels and truly achieve net-zero emissions in any year in the distant future will require a better, more scalable alternative to come into prominence. Many believe nuclear energy in the form of small modular reactors and potentially fusion technology will ultimately become that better alternative. In the meantime, in the absence of a real energy transition, countries will have to make do with and strive to derive benefits from the energy addition and innovation that is actually taking place.
Euronews
24-03-2025
- Business
- Euronews
Renewables stepped up to meet surge in energy demand from rising temperatures in 2024, IEA says
ADVERTISEMENT Record high temperatures contributed to a sharp increase in the world's electricity use last year, the International Energy Agency (IEA)'s latest report reveals. Intense heatwaves boosted people's demand for cooling in many countries, adding to rising consumption from industry, the electrification of transport, and the growth of data centres and AI. These power-hungry factors drove a 2.2 per cent rise in energy demand last year - lower than GDP growth of 3.2 per cent, but almost twice its recent average of 1.3 per cent between 2013 and 2023. 'There are many uncertainties in the world today and different narratives about energy,' says IEA Executive Director Fatih Birol. 'What is certain is that electricity use is growing rapidly, pulling overall energy demand along with it to such an extent that it is enough to reverse years of declining energy consumption in advanced economies.' Related Almost every European country experienced a hotter winter than usual, study finds EVs set to save Europe 20 million tonnes of CO2 this year but transport remains biggest polluter 'The result is that demand for all major fuels and energy technologies increased in 2024, with renewables covering the largest share of the growth, followed by natural gas. And the strong expansion of solar, wind, nuclear power and EVs is increasingly loosening the links between economic growth and emissions.' How is climate change increasing emissions? The feedback loop between rising temperatures and emissions is one concerning trend in IEA's Global Energy Review 2025. Fierce heatwaves in China and India - which pushed up cooling needs - contributed more than 90 per cent of the total annual increase in coal consumption globally. Record temperatures around the world contributed significantly to the annual 0.8 per cent rise in global CO2 emissions to 37.8 billion tonnes. But the deployment of solar and wind energy, nuclear, electric cars and heat pumps since 2019 now prevents 2.6 billion tonnes of CO2 each year, according to the IEA. That's equivalent to 7 per cent of global emissions. More good news from the report includes how the expanding supply of low-emissions sources covered most of the increase in global electricity demand in 2024. The amount of new renewable power capacity installed worldwide rose to around 700 gigawatts last year. Related Wind and solar have risen to 'new highs' in the EU overtaking fossil fuels for the first time ever Fish door bells, plastic-eating fungi and tree hugging: Positive environmental stories from 2025 What is the energy picture in Europe? Europe's renewables revolution is continuing apace. Wind and solar reached a record share of 28 per cent of electricity production last year, surpassing the combined share from coal and gas for the first time. In total, renewables accounted for almost 50 per cent of electricity production. Following severe droughts in 2023, above-average rainfall helped increase hydropower generation. But poor wind conditions in Europe drove up fossil fuel use in the power sector. Overall, while energy demand in the EU started to grow again for the first time since 2017 (aside from the post-COVID rebound in 2021), its energy-related CO2 emissions decreased by 2.2 per cent. 'From slowing global oil demand growth and rising deployment of electric cars to the rapidly expanding role of electricity and the increasing decoupling of emissions from economic growth, many of the key trends the IEA has identified ahead of the curve are showing up clearly in the data for 2024,' adds Dr Birol.
