Overview

Energy Demand

World energy consumption is continuing to grow, driving by rising standards of living and a growing population.

World primary energy production. Primary energy is defined to be the heat released from combustion or fission of an energy source, as obtained from nature. For non-thermal power sources, such as hydropower, solar, wind, or ocean, primary energy is estimated on a per-kWh equivalency of a thermal source. Source: BP ¹.

Energy consumption can be considered in four broad sectors: commercial, industrial transportation, and residential.

Energy consumption by sector today and in 2050 across national income groups. Source: BP.

World population may grow to 10 billion people in the 21st century.

Source: United Nations ².

World energy demand is expected to grow well into the 21st century.

Forecast energy demand. Source: EIA ³.

Climate Change

Energy is the main human driver of climate change.

World greenhouse gas emissions and emissions by energy source. See our analysis of climate change for details.

Clean Energy Investment

A transition to a clean energy system and efficient cities will require trillions of dollars of capital investment. Following are estimates of investments needed in the United States for several solutions.

Estimates of investment required for changes in the energy and urban systems. Capital costs for nuclear, solar, and wind power are taken from the World Nuclear Assocation ⁴, NREL ⁵, and Stehly et al. ⁶ respectively, and with respective capacity factorso of 90%, 30%, and 41.5%. All other electricity-based solutions assume that the additional electricity is sourced in equal parts from nuclear, solar, and wind. The wind and solar scenarios do not include the cost of additional grid infrastructure; details on cost estimates for an HVDC network and grid storage are presented in our analysis of the power grid.

Industrial heat demand as reported by the Manufacturing Energy Consumption Survey ⁷ for 2014, and the electrification scenario assumes that 80% the onsite energy is met with electricity. Capital costs of new industrial equipment is not considered. The residential heat scenario assumes that all natural gas, propane, and kerosene heating, as reported by the Residential Energy Consumption Survey ⁸ is replaced by heat pumps, with a capital cost of $2000 per housing unit ⁹.

For the electric car scenario, we assumed that short wheelbase cars are replaced by the equivalent of the Hyundai Ioniq ($30515) and long wheelbase cars by the equivalent of the Kia Niro ($38500), with the current car fleet reported by Bureau of Transportation Statistics ¹⁰ and EV costs from U.S. News and World Report ¹¹. For electric synfuels for shipping, aviation (domestic only) and trucking, current energy demand is given by the BTS ¹², an electricity-to-fuel conversion efficiency of 50% is assumed, and capital costs for fuel synthesis is $450 per KW fuel, as given by Brynolf et al. ¹³.

The apartment scenario is for enough apartments to house an additional 82.5 million Americans, or a quarter of the current population, based on midrise apartment construction costs reported by ProEst ¹⁴.

Note that the above costs are not necessarily new investment. The costs of building cleaner and more efficient power sources, housing, and cars to accomodate new demand or replacing aging stock are offset by foregone cost of alternative options. Improvements in technology will lower the required investments, and these savings can be achieved through targeted research and development or deployment policies.

Economic growth is increasing overall energy need and required investment, even as we continue to gain more economic activity per unit of energy.

Energy itself is foundational to ongoing economic growth. It is important to be aware that energy efficiency and clean energy deployment are often, in and of themselves, offset at least partially by additional demand, called the rebound effect. While the rebound effect is not an argument against efficiency and clean energy, it reminds of us the need for more targeted efforts to phase out polluting and otherwise harmful energy sources.