Energy demand will continue to grow on the back of relatively fast socioeconomic development. It is driven by the requirement to satisfy mankind’s production and living needs. With continued improvements in economic development and quality of life, demand for energy will continue to soar for a long while, especially in underdeveloped countries and regions where most of the populations suffering from energy poverty will gradually live a modern life enriched by the supply of power as a commodity. We are of the view that by the mid-twenty-first century, the gross capacity of the world economy will maintain, albeit at a slower rate, the rising trend that started at the end of World War II. It is projected that before 2030, the world economy will grow more strongly, but energy-intensive enterprises in the steel and iron, nonferrous metals, building materials, and chemical engineering industries will experience slower growth. The production of key products will reach the saturation point in 2030 or thereabouts, with energy demand maintaining an average growth rate of 1.6%. After 2030, energy-intensive industries will see themselves degenerating into “sunset industries,” with the industrialization and urbanization processes drawing to an end in most regions. By contrast, the weighting of other industrial, transportation and commercial sectors in the economy will rise further, amid an overall slowdown in energy demand growth.

A more balanced development of the global economy will narrow the gap in energy demand per capita between different regions. Sluggish growth and poverty are the major reasons for the long years of war and social unrest in some locales of Asia, Africa, and South America. With the progress of the globalization process, the gaps between the underdeveloped regions of Asia, Africa, and South America and the developed regions of Europe, the Americas, and Oceania will be significantly narrowed in the future, with an improvement in the imbalanced development between north and south. By 2030, the role of Asia as the engine of world economic growth will be further strengthened. China will overtake the United States as the world’s largest economy; Africa and South America will occupy a more important position in the world economy. The developed countries in Europe, North America, and Oceania will continue to lead the world in technology, finance, and education, but economic growth will be relatively lower due to the impact of population ageing, heavy government debts, and an excessively exuberant virtual economy. By 2050, the currently developing countries (regions) will rise to developed status following the completion of the industrialization process. The gross capacity of emerging economies will account for over 50% of the world economy by then. The gap in energy demand per capita between different regions will close gradually along with the narrowing differences in economic development. Energy consumption per capita in the underdeveloped regions of Asia, Africa, and South America will increase substantially.

The marked difference in population growth will produce a greater impact on energy demand. According to United Nations projections, under the scenario of medium fertility rates, the world population will continue to increase, albeit at a steadily lower rate. The world population is forecast to reach 9.55 billion by 2050. The difference in population growth will become increasingly obvious among different regions, with the African population growing fastest, followed by the Oceanian population; the Asian and South American populations will fall sharply from a high level; the North American population will maintain a low and steady rate of growth while the European region will see negative population growth. In the mid-twenty-first century, along with a slowdown in economic and population growth, energy demand in developed countries will only post marginal growth in the long term. By contrast, the rapid economic expansion, rising populations and faster urbanization among developing and emerging markets will continue to drive global energy consumption higher.

Global economic policy is shifting in the direction of globalization, balance, and low-carbon development. Over the past 20 years, the global economy has exhibited a growing trend of “moving east,” with emerging economies like China, India, and Russia becoming the new drivers of global economic growth. This trend will remain intact and spread to underdeveloped countries and regions. Driven by a fundamental view of concerted and sustainable development on a global basis, all countries are working hard to create a new international economic order characterized by globalization, multipolarization, and mutual coordination, guided by the shared objective of combating global climate change and eliminating war and poverty. Moreover, the emerging low carbon economy is providing an important impetus to global economic growth in the future. In view of the global impact of carbon emissions, countries around the world are finding themselves competing and working with each other to promote global low-carbon development together.

The supply of fossil energy is subject to rigid resource restrictions, with limited room for development and utilization in the future. Fossil energy sources like coal, oil, and natural gas supported the progress of human civilization and socioeconomic development for 200 years in the nineteenth and twentieth centuries. In spite of a steady year-on-year rise in proven reserves of global fossil energy thanks to fast-developing exploration technology, the reserves of global fossil energy remain limited. Unless mankind can stop relying on fossil fuels, this source of energy will eventually and inevitably be exhausted as a matter of reality and natural restriction.

The abundant renewable energy resources around the world will become the dominant energy source in the future. Given their abundance and thanks to the growing maturity of development and application technologies, hydropower, wind, and solar energy resources worldwide can meet energy development requirements. The global demand for energy in 2050 can be satisfied simply by developing just a fraction, at 0.05 percent (5/10,000), of the developable capacity of global wind and solar energy. Moreover, the Earth also possesses other abundant energy resources, like ocean, biomass, and geothermal energy. If these renewable energy resources can be developed on a large scale, the energy problems facing mankind will be fundamentally eradicated.

The imbalanced distribution of energy resources calls for efforts to coordinate energy allocation on a global basis. Regionally, remaining recoverable coal reserves are distributed mainly in Europe and Eurasia, Asia Pacific, and North America. Remaining recoverable, conventional oil reserves are concentrated in the Middle East, Central and South America, and North America. Remaining recoverable natural gas reserves are mainly located in the Middle East, Europe, and Eurasia. Given the abundance of hydropower resources available and a low degree of development and utilization, Asia, Africa, and South America will become the focus of hydropower development in the future. The world’s wind and solar energy resources are mostly concentrated near the Arctic and equatorial regions, making them ideal locations for development and construction of large energy bases. Historically, the uneven distribution of conventional energy sources has propelled the development of global fossil energy trade and traditional energy markets. The global development of electricity-oriented clean energy in the future will lead to the formation of global electricity trade and electricity markets and invoke new requirements on the global allocation of electric power.

Global efforts to combat climate change have accelerated low-carbon development of energy. Putting a spotlight on the growing urgency of work on energy efficiency and emission control, global climate change has been driving the development and improvement of relevant energy technology, energy policy and global energy management systems. The massive emission and build-up of CO₂ caused by fossil fuel combustion has increased the concentration of this pollutant gas in the atmosphere and further aggravated the greenhouse effect, resulting in abnormal climate events and global ecological imbalances. To avoid severe disaster and achieve the goal of limiting global temperature rise to no more than 2°C in this century from the temperature recorded before industrialization, the major developed countries and emerging market economies are expected to introduce mandatory measures to control emissions in the future. The global action to combat climate change will bring improvements, making global energy technology, energy policy and global energy management systems more comprehensive, in-depth, and synergistic.

Pollutant discharges caused by energy utilization are attracting growing attention. Long before the Industrial Revolution, firewood was the main source of energy for consumption. Basically this did not create environmental concerns at a time when consumption was limited and timber resources harvested could be replenished through revegetation, not to mention the fact carbon emissions from burning could be offset by the carbon fixation of the growing plants, and the smoke pollution caused by combustion was within an environmentally acceptable limit. The Industrial Revolution triggered rapid growth of energy consumption, making fossil fuels the dominant energy source, with a tremendous impact on the environment. For example, China now faces the severe challenge of compound air pollution caused by soot and vehicle exhaust emissions. With the growing prominence of environmental problems and the ever-higher demand for environmental quality, more importance is being attached to the pollutant discharges from fossil fuel burning as a restrictive factor for energy development.

The current development and utilization of energy resources is ecologically and environmentally unsustainable. Energy development and utilization focusing on fossil energy has brought about increasingly conspicuous damage to the ecological environment. For instance, land subsidence and water contamination caused by coal mining as well as the serious heavy acid rain caused by particulate, sulfur dioxide, and nitrogen oxide emissions in the coal burning process have led to soil acidification, forest deterioration, and other ecological damage. The current over-reliance on fossil fuels for energy development and utilization is unsustainable, which demands the completion an energy transition as soon as practicable in order to reduce destructive exploitation and promote clean energy development.

Technological progress has led to improved energy efficiency and lower energy demand. Around the world, energy end-use and intermediate conversion efficiency have improved to various extents, thanks to technology process improvement, energy efficiency technology development, and energy management enhancement. For example, the world’s advanced-level aluminum electrolytic AC power consumption decreased from 14,400 kWh/ton in 1990 to 12,900 kWh/ton in 2012, whereas comprehensive energy consumption of ethylene also went down from 897 kg of standard coal/ton to 629 kg of standard coal/ton over the same period. Energy consumption in the construction and transport sectors has shown significant improvement along with growing technology development in motors, electronic information, materials, and energy gradient utilization. Thanks to the advanced gas turbine and coal-fired power generation technologies, such as extra supercritical coal-fired power generation, integrated gasification combined cycle power generation, and circulating fluidized bed, the efficiency of fossil-based power generation has improved exponentially. Improvement in energy development, energy conversion, and utilization efficiency has not only reduced the production of primary energy required to meet the same level of demand, but also provided conditions for restructuring the energy mix and mitigating energy and environmental problems.

Technological progress has enhanced energy supply capacity and lowered energy supply costs. The oil crisis of the 1970s triggered a far-reaching structural change in the world energy market, prompting global efforts to actively develop energy efficiency technology and seek alternative energy sources to ensure supply security. For example, along with the rapid development of exploration technology, the proven reserves of fossil energy around the world have increased from year to year. The successful development of horizontal well technology, multilayer fracturing technology, hydraulic fracturing technology, refracturing technology, and simultaneous fracturing technology has made the commercialized mass production of shale gas in North America possible. Technological advancements in nuclear energy utilization and renewable energy generation have led to ever-higher levels of clean energy utilization, steadily lowering costs, and growing capacity expansion. As a result of technological development, grid parity for photovoltaic energy generation will be reached in 2016–2017 in Europe and America. However, parity between on-grid photovoltaic power tariffs and residential sales tariffs in China is not expected to be reached until 2020, given the country’s relatively low power price benchmarks. In line with technological progress, generating costs based on the same type of power generation show a steadily downward trend, allowing the electricity industry to meet increasing power demand at increasingly competitive system costs.

Pollutant emissions are reduced and impact on energy and the environment mitigated through technological advancement. As a unique high-quality energy source, electric power is not only highly efficient (over 90% in general), but also pollution-free in consumption and conducive to high-precision control. It is also a good substitute for fossil energy at the end-use level. Amid the dwindling supply of fossil energy resources and the growing concerns about the contribution of fossil energy development and utilization to environmental pollution and climate change, application technologies for renewable energy, such as wind and solar energy, have become the focus of competition in the technologies for global primary energy development and the way forward in energy technology development around the world. With technological progress, the share of electric power in energy end-use and primary energy consumption can be improved and the structure of energy demand optimized to reduce the environmental impact brought about by energy development and utilization and alleviate energy and environmental constraint.

Energy policy drives innovation in energy technology. Progress and innovation in energy technology is an important pillar of energy development. Driven by a consensus on global sustainability, governments around the world hold in high regard the development of energy technology, as evidenced by the strong financial, policy and taxation support provided for the development of energy efficiency technology and clean energy technology. For instance, a US$150.7 billion investment plan for the years 2009–2014 was put forward in the United States Recovery and Reinvestment Act by the Obama Administration to provide direct investment, tax incentives, and loans or loan guarantees for clean energy technology. Of this funding amount, 74% is dedicated to promotion and application of clean technologies, 18% to the research and development and demonstration of clean technologies, and the remaining 8% to the provision of financial subsidies for clean technology manufacturers. In recent years, the Chinese government has been working vigorously on the research and development and promotion of energy technologies and creating conditions for energy technology development by improving the market mechanism, technical standards and policy environment.

Policy-guided energy production and utilization. Energy is an important physical foundation for socioeconomic development. With the fast expanding energy demand and the growing scarcity of resources over the past decades, meeting the energy demand arising from socioeconomic development has become the top priority of policy-based regulation. To achieve this goal, measures such as technological progress, market regulation, and system guidance have been taken to support the policy objectives of promoting energy development and ensuring a more adequate supply of energy, while encouraging energy conservation and efficiency and controlling rapid energy demand growth. For example, to improve energy conservation and rein in unreasonable energy demand, the Chinese government has proposed a target of approximately 4.8 billion tons of standard coal for total primary energy consumption and of approximately 4.2 billion tons of standard coal for total coal consumption by 2020 so as to strengthen control of the coal-dominated energy mix. In addition, plans have been proposed to vigorously develop renewables as well as clean energy like nuclear energy and natural gas, with the share of nonfossil energy in primary energy consumption set at 15% and 20% by 2020 and 2030, respectively, to improve the level of substituting clean energy for fossil energy.

Energy policy supports energy and environmental improvements. For a long time, the continued growth of fossil energy consumption has been responsible for environmental issues like ecological damage, environmental pollution, and global climate change. Against this background, the resolution of these energy and environmental problems has figured more prominently in policy terms in some countries. For instance, environmental standards governing energy utilization have been developed, covering coal consumption and pollutant discharges at thermal power plants, environmental well-being and energy efficiency, vehicle exhaust emissions, and the economics of fuels. Intensive efforts have also been exerted to promote the application of environmental management technologies, covering clean energy, high-efficiency power generation, and high-efficiency desulfurization and denitrification.

In the future, the elasticity coefficient of energy consumption is expected to fall steadily, with faster economic growth being supported by relatively low energy growth. Between 1990 and 2000, average annual global economic growth stood at 2.8%, compared with an average annual growth of 1.4% in global energy consumption, indicating an elasticity coefficient of energy consumption at about 0.5. Between 2000 and 2010, average annual global economic growth was estimated at 2.7%, compared with an average annual growth of 2.4% in energy consumption. The elasticity coefficient of energy consumption climbed to 0.9 as a result of the growing energy consumption in non-OECD countries. As regards future energy development, average annual global economic growth is expected to be about 3.0% between 2010 and 2050, compared with energy demand growth of about 1.2%, indicating an elasticity coefficient of energy consumption at about 0.4. On a phased basis, between 2010 and 2020, average annual global economic growth is estimated at about 3.0% and annual energy demand growth at about 2.0%, indicating an elasticity coefficient of energy consumption at about 0.6. Between 2020 and 2030, average annual global economic growth is expected to rebound to 3.2%, fuelled by the growing emerging economies, and the quickening pace of promoting and applying green energy technology (like the industrial internet, smart buildings, and transport electrification) in the industrial, construction, transport, and other major energy-consuming sectors, is expected to drive global energy demand growth down to 1.4% and the elasticity coefficient of energy consumption down to 0.4. With a slowdown in global economic growth, average annual global economic growth is expected drop to 3.0% in 2030–2040, while average annual energy demand growth will decline to 0.9% and the elasticity coefficient of energy consumption will be about 0.3. With more intensified global efforts in energy efficiency and GHG emission control, average annual world economic growth is expected to fall to 2.8% in 2040–2050, with average annual energy demand growth easing to 0.5%, indicating an elasticity coefficient of energy consumption of approximately 0.2.

The afore-mentioned are projections of world energy consumption growth based on a historical view of global energy development and scenarios of faster clean energy development. But objectively there are uncertainties, as total primary energy demand growth is inextricably linked with global economic growth, changing industry structures, urbanization, population growth, and energy policy. In the event of a slowdown in global economic and population growth, or significant breakthroughs in energy efficiency technology, global primary energy demand may reach approximately 23 billion tons of standard coal by 2030, to rise to 25–27 billion tons in 2050.

The substitution of electricity for fossil energy, together with improved electrification, has become the dominant trend in the changes in the world’s end-use energy structure. With population expansion and improving quality of life, mankind’s demand for available energy⁵ will continue to grow. The efficiency of energy utilization will rise substantially, driven by the growing conversion of clean energy into electricity to gradually replace fossil energy in the end-use sector. Based on meeting equivalent level of demand for available energy, a higher share of electricity in the end-use energy structure will lead to lower energy demand at the end-use level. Higher demand for available energy and improved efficiency of end-use energy will cause end-use energy demand globally to peak around 2030. From 1980 to 2010, global end-use energy consumption increased by 1.6% on an annual basis. Average annual growth in 1980–1990, 1990–2000, and 2000–2010 was 1.6, 1.1, and 2.1%, respectively. Global end-use energy demand is expected to post average annual growth of 0.4% in 2010 to 2050. See Fig. 4.5 for the global end-use energy demand and global demand for available energy from 2010 to 2050.

Judging by the trend of end-user, energy utilization has been marked by a shift from a direct, low efficiency consumption model to an indirect, high-efficiency model, with demand for electricity continuing to grow. In 2010, electricity was responsible for 17.7% of global terminal energy consumption, 2.2 percentage points higher than that in 2000. Electricity consumption of OECD countries accounted for 21.9% of end-use energy consumption, and non-OECD countries accounted for 15.7%. It is expected that from 2010 to 2030, the substitution of electricity for coal will be carried out rapidly in the world’s industrial and construction sectors, electric vehicles will gradually be used for commercial application, railway electrification will grow rapidly, coal and oil will have a decreasing share in end-use energy consumption, and electricity will have an increasing share in the energy structure. By 2030, electric energy will have accounted for 25.0% of end-use energy consumption, 7 percentage points higher than that in 2010. See Fig. 4.6 for the world’s end-use energy consumption structure from 2010 to 2050.

Because the major emerging economies and developing countries in Asia, South America, and Africa will complete the industrialization process successfully after 2030, the electric furnace will gradually take the place of traditional converters and blast furnaces as the major iron smelting equipment. In other industries (including construction), renewables-generated electricity, and heat will be utilized on a larger scale. In transportation, electric vehicles will replace traditional petrol vehicles at a faster rate to such an extent that oil will be edged out of its current position as the dominant fuel in transportation. Under a scenario of the “two-replacement policy” gathering speed, electricity is expected to account for over half (52.2%) of end-use energy demand by 2050, or a doubling of its share in 2030.

Given the stringent carbon emission controls, the share of fossil energy in total energy consumption is expected to be limited to around 20% by 2050, with more than half of the coal consumed and around 45% of the natural gas consumed going into power generation. The remainder will be used mainly by certain segments of the industrial sector or for nonenergy purposes. By that time, oil-fired generation will basically be nonexistent, with oil used primarily for water transport, air transport, and nonenergy uses. Of all nonfossil energy sources, around 88% will be utilized in the form of electricity and the remaining in the form of heat.

The uncertainty of the energy demand structure is derived mainly from clean energy substitution on the supply side, and electricity substitution at the end-use level. If clean energy substitution and electricity substitution should proceed at a slower-than-expected speed due to technological, cost, policy and other reasons, fossil energy will still have accounted for one-quarter to one-third of the primary energy demand structure by 2050, and electricity will still accounted for less than 50% of end-use energy consumption.

The rapid growth in energy consumption per capita and population size is expected to make Africa the fastest-growing region in terms of total energy consumption before 2050. Africa’s population will grow from 1.03 billion in 2010 to 2.39 billion in 2050, accounting for a higher share of the world population from 14.9% to 25.1% during this period. The continent’s share of global energy consumption will also rise from 3.0% in 2010 to 13.7% in 2050. Between 2010 and 2050, global energy demand is expected to grow by 11.2 billion tons of standard coal, with Asia, Africa, and South America contributing to the growth. Given their massive population base, these three regions will be able to further consolidate their position as the world’s largest energy consumers. These three regions are also expected to take up a 74.1% share of total global energy demand by 2050. Africa and South America will rise to a more prominent position as the world’s major energy consumers. See Fig. 4.8 for the share of primary energy in global energy consumption by continent between 2010 and 2050.

North America, Europe, and Oceania, regions of traditionally high energy consumption, are expected to experience slower growth in energy consumption, with a correspondingly lower share of world energy consumption to 11.7, 13.4, and 0.8%, respectively, by 2050, as a result of slower economic and population expansion and high energy efficiency. However, annual energy demand per capita in these regions will expectedly remain higher than the world average by 1.5, 0.8, and 0.4 times. See Table 4.1 for scenarios for energy demand by continent.

Economic globalization has produced the greatest impact on the distribution of global energy demand. If economic growth is lower than expected, the share of Asia, Africa, and South America in energy consumption may be lower than the levels described in the previous scenario. In Africa in particular, local industrialization and urbanization will remain low, dragging down regional energy consumption growth and weakening its position in the world’s energy demand structure, if economic development has not significantly improved while war and turbulence persist. Against this background and as opposed to the previous scenario, Africa’s total primary energy consumption in 2050 may fall to 1.5–2.0 billion tons of standard coal, thereby bringing down global energy consumption to around 27 billion tons of standard coal. By 2050, the share of Africa in global energy demand will maintain at around 5%, and annual energy consumption per capita at 0.6 tons of standard coal, little changed from 2010 levels.

Currently, energy consumption per capita in Africa, where 600 million people are still without access to electricity, is less than one-quarter of the world’s average. Judging by the fast-growing energy and electricity consumption in the developed countries of Europe and America and also China since it launched a policy of reform and opening-up, it can be envisaged that Africa will also see rapid growth in energy and electricity demand after embarking on a modernization drive. Expanding the supply of modern energy and improving energy consumption per capita in Africa is one of the important objectives towards eliminating energy poverty and achieving joint development globally, and also the major driving force behind global electricity demand growth.

Electricity demand growth is comparable to economic growth. Over the past two decades, the elasticity coefficient of global electricity consumption has hovered around 1. In 1990–2000, the elasticity coefficient stood at 0.9, increasing to 1.3 in 2000–2010. It is expected to fall to 1.0 in 2010–2050. By 2020, electrification in the industrial, construction, and transportation sectors will gain steady momentum, contributing to constantly rising electricity demand. However, with the subdued consumption growth among the major energy-intensive industries impacted by the global financial crisis, average growth of global electricity demand is expected to be 2.8% between 2010 and 2020, down 0.5 percentage points from the first decade of the twenty-first century, with an elasticity coefficient of electricity consumption of 0.9. After 2020, the substitution of electricity in various end-use segments for conventional fossil energy, especially coal and oil, will progress at an increasingly noticeable pace. The generating capacity of wind, solar, and other forms of renewable energy will experience significant expansion, with global electricity demand accelerating steadily, on an average annual basis, at expected rates of 3.3 and 3.8% in 2020–2030 and 2030–2040, respectively, with the elasticity coefficient of electricity consumption of 1.0 and 1.3, respectively. After 2040, due to the significantly expanding basis for comparison, electricity demand growth will slow to 2.6%, with the elasticity coefficient of electricity consumption easing to 0.9, in 2040–2050.

The fact that electricity demand growth has surpassed energy demand growth indicates the increasingly dominant role of electricity in the energy structure. It is statistically shown that global electricity demand will post annual growth of 3.1% between 2010 and 2050, 2.6 times the rate of energy demand growth and slightly higher than the average rate of economic growth. Average energy demand growth is expected to be 1.2%, indicative of the saturation of demand and growth “delinked” from the total economy. The fact that electricity demand growth has markedly surpassed energy demand growth reflects a gradual strengthening of the central position of electricity in the energy system and the need to prioritize electric energy development. See Fig. 4.10 for the total world economy and growth in energy and electricity demand between 2010 and 2050.

In developed countries and regions, electricity demand has moved into a period of steady natural growth, with future growth potential coming primarily from electricity substitution. Asia, Africa, and South America are now the world’s major centers of electricity demand growth where demand is expected to maintain relatively fast growth for a while. If the saturation point of electricity demand sets in ahead of time in Asia, Africa, and South America, or electricity substitution in Europe, America and Oceania proceeds more slowly than expected, total global electricity demand may drop to 50,000–60,000 TWh as opposed to the above-mentioned scenario.

Despite a very high base of per capita electricity demand, North America, Europe, and Oceania will continue to experience growing power demand as the substitution of electricity for traditional fossil energy continues. By 2050, electricity demand per capita in North America, Europe and Oceania will have increased to 22,927, 13,398, and 12,835 kWh, respectively. In 2010–2050, the total electricity demand of the three regions is expected to grow at a yearly rate lower than the world average, accounting for a sharply lower share of the world’s total power demand.

In terms of growth rates, Europe, North America, and Oceania will see relatively low demand growth after the completion of the industrialization process, with annual growth of 1–2% between 2010 and 2050. In contrast, Asia, South America, and Africa will see faster growth in electricity demand at a yearly rate of more than 3% between 2010 and 2050, due to their population numbers and ongoing industrialization. Average annual growth in electricity demand in Africa, the least industrialized continent, is expected to almost double the level recorded in Asia, reflecting the combined effect of fast-growing industrialization and population. See Fig. 4.11 for the annual growth of electricity demand by continent between 2010 and 2050.

On a per capita basis, the world’s electricity demand is expected to be around 7650 kWh in 2050, slightly higher than Europe’s consumption per capita in 2010 and equivalent to that of the United States in 2010. By that time, following decades of relatively strong growth, Asia and South America will reach or come close to the world average in terms of per capita electricity consumption. Despite its fast growing demand, Africa’s electricity consumption per capita will only reach 52% of the world average by 2050, given the very low base it started from.

In Europe, Oceania, and North America, consumption per capita will continue to grow driven by a large consumer base and the potential of electricity substitution, but the margin with the world average will become significantly narrower. In 2010, per capita electricity consumption in Europe, Oceania, and North America was 2.3, 2.7, and 5.0 times the world average, respectively. In 2050, the figures are expected to fall to 1.8, 1.7, and 3.0 times, respectively, indicating a narrowing gap in per capita consumption around the world in the future. See Fig. 4.12 for the electricity consumption per capita in the world and individual continents in 2010 and 2050.

As an overall trend, the narrowing gap in electricity demand among different continents is apparently in line with the globalization process. Although the speed of narrowing varies with the natural growth of regional demand and the substitution rate of electricity for other energy forms, the overall share of developed countries and regions in global electricity demand will maintain a downward trend.

The factors affecting regional electricity demand are wide and varied, and there are divergent expectations as to the future electricity demand in selected regions. For example, the IEA is relatively conservative about the level of electrification improvement in Africa, expecting that by 2040, over 500 million people on the continent will still be denied access to electricity.⁶ In 2012, over 620 million people in Sub-Saharan Africa went without electricity, accounting for half of the world’s total population being denied access to electric power. Furthermore, with the benefit of increased power supply offset by rapid population growth, Sub-Saharan Africa will become the world’s only region with a population living without electricity. See Fig. 4.13 for information on Africa’s “powerless” population.

A lack of power infrastructure has become a major hindrance to the development of Africa, amid its rapid economic expansion. According to IEA estimates, an investment of more than US$300 billion in electricity infrastructure is required for Sub-Saharan Africa to completely resolve the problem of power shortage by 2030. In recent years, China as well as the United States and European countries and regions have strengthened their investments in Africa’s electricity infrastructure. For example, China offered a US$20 billion loan to Africa in March 2013, with the greater part of the amount planned to go into building electricity infrastructure in support of the continent’s economic development. During his visit to Africa in July 2013, United States President Barack Obama proposed the Power Africa program to resolve the power shortage problem in Africa through an US$7 billion investment. With improvements in the global economy and the governance structure over the next few decades, Africa will see greatly improved popularity of power supplies and a significant reduction in its “powerless” population, with the growing development of electricity infrastructure.

Fossil energy generation will experience a sharp decrease. Fossil energy, mainly natural gas and coal-fired generation, is expected to account for approximately 10% of global electricity generation in 2050. In anticipation of the need to accommodate the system operational requirements of grid-connected, large-capacity wind, solar, and other renewable energy generation, a certain level of natural gas generation capacity will be retained while efforts continue to develop pumped storage capability. Dictated by its own level of development and the capacity of renewable energy generation, Asia will retain a relatively high level of natural gas and coal-fired generation in 2050. North America, owing to the mature technology and relatively low costs of developing shale gas and other unconventional gas resources, will retain a relatively high level of natural gas generation. See Fig. 4.16 for the change in the share of power generation attributable to fossil energy in 2010–2050. A breakdown of fossil energy generation by continent in 2050 is shown in Fig. 4.17.

Distributed generation is an integral part of energy supply. Distributed generation worldwide is expected to reach 11,000 TWh in 2050, accounting for 15% of total power generation. Based on each continent’s development of distributed generation with reference to renewable energy resources, population and other factors, Asia’s share of global distributed generation is expected to reach 41% in 2050. Africa, blessed with favorable conditions for developing distributed generation of solar, hydropower, biomass, and other renewable energy, is expected to have a 27% share, ranking second among all continents. See Fig. 4.18 for a breakdown of distributed power generation by continent in 2050.

The distributed energy system is valued internationally for its gradient utilization capability and high efficiency. Operating on a small scale, it mainly targets residential customers. In the future, distributed energy can provide a useful backup for large grids by taking advantage of the availability and economics of resources in load centers. Future distributed generation is expected to take the form of microhydropower projects, distributed wind and solar power systems, biomass energy generation, and energy storage systems. In particular, Europe, Asia, North America, and South America are well-placed to develop distributed energy systems based on biomass generation on account of their dense populations as well as the massive availability of urban garbage and forestry and agricultural wastes. In solar energy development, as solar energy resources are extensively distributed across continents, distributed solar energy systems will become the focus of development against a background of sophisticated smart grid development, major breakthroughs in energy storage technology, and rapid urbanization. Taking into account land utilization, resources, and other factors, distributed wind power generation will form part of a distributed energy system incorporated with solar, energy storage and other power generation capability to supply electricity to remote areas. In 2050, annual distributed generation is expected to reach 3.5 billion tons of standard coal, or 15% of the world’s total electricity generation and approximately 11.5% of primary energy consumption. Solar energy is the most important means of distributed generation, accounting expectedly for about 54% of total distributed generation, followed by hydropower (21%). See Fig. 4.53 for the structure of distributed power generation in 2050.

The four principles, the first being the principle of low-carbon development. A consensus has basically been reached among governments around the world on the potential threat of climate change to human sustainability. As low-carbon and clean development has evolved into an inexorable trend in global energy development, major countries have been setting low-carbon targets oriented towards clean energy. Any study of electricity development across continents and global electricity flows should take low-carbon development as a nonnegotiable constraint. The second is the “locals first” principle. Every continent is abundant with renewable energy resources, including water, wind, solar, biomass, and ocean power, developed on a centralized or distributed basis to meet power demand locally or from load centers near the source of generation. In terms of reliability and economic performance, this mode of development and utilization compares favorably with the delivery of electricity across nations or continents. These resources should therefore be accorded priority for development and utilization. The third is the principle of economic benefit and high efficiency. Any plans to develop major renewable energy bases in the Arctic/equatorial regions and elsewhere as well as long-distance transmission capability, must take account of both development and transmission costs, by comparing the cost required to bring electricity to a receiving region with the cost of local generation and supply. The result of this comparison should form the basis for optimizing a decision on the capacity and direction of transcontinental transmission. The last is the principle of technological feasibility. In the design of global interconnections, care should be exercised to avoid building transnational/transcontinental interconnections and transmission channels over high mountains or long undersea distances. Generally, transcontinental interconnections are supported by UHV DC grids and intracontinental/domestic interconnections, by UHV AC or UHV DC grids.

Coordinated view at three levels: the first is a coordinated view of centralized and distributed clean energy development. Depending on the level of resource endowment, global clean energy can generally be categorized into two major types. One is quality resources, abundantly available per unit area, with long utilization hours, low costs, and positive economics. The regions with quality resources are usually regions with strong solar radiation or high annual average wind speeds, relatively sparse population, and far from load centers. For these regions, it is common to adopt centralized development and provide large-scale grid transmission and allocation over extensive areas. The other type of clean energy is resources of a general nature, mostly distributed around load centers, with mild sunlight conditions and wind speeds, dense population, and agreeable climate. In this case, distributed development is usually adopted to provide electricity for local supply and consumption. In the future, electricity demand may partly be satisfied by energy generated from rooftop photovoltaic, biomass, small hydropower, and other distributed sources. But more energy will come mainly from large clean energy bases located far away from load centers but with good resources. Such bases are an integral part of global electricity flows. At the second level, a coordinated view is required of clean energy development locally and in remote areas. Any study of the future capacity and transmission direction of global electricity flows must take into account the electricity demand from each continent and major countries, renewable resource endowment and development goals, the feasibility of energy channels, and the cost of transmission technology. Currently, renewables-based generation like solar and ocean power is not as competitive as fossil energy in terms of economic benefit and efficiency. Only the economics of wind power are comparable to those of conventional fossil-fueled generation. In order to reduce the total social costs of electricity usage, priority should be given to renewable resources with good development conditions and short transmission distances. With technological advancement and continued environmental and carbon constraints, the development and environmental costs of fossil energy utilization will increase while, in contrast, the advantages of clean energy generation will manifest themselves more strongly. As a result, the scope of clean energy development will expand to cover renewable resources in remote locations. Electricity flows will also extend gradually from a transnational to transcontinental basis and further to a global level. At the third level, a coordinated view should be taken of energy balances at the intracontinental level and mutual support in energy flows across continents. Firstly, the space and demand for renewable energy development on each continent should be analyzed based on the present situation of electricity development and future demand as well as clean energy development goals of the major countries on each continent in order to clearly define the major power-receiving regions and markets around the world. This should be followed by a further study of the development potential of large energy bases in the Arctic and equatorial regions and elsewhere, with reference to the supply economics based on transmission costs, so as to define the supply capacity and costs of clean energy bases in the future. On this basis, subject to the objectives of low-carbon development and optimizing supply economics, a number of clean energy options are available but priority should be accorded to developing and utilizing renewable energy resources with favorable conditions for local development. Consideration should then be given to clean energy access for large-scale renewable energy bases, with reference to transmission channels and supply economics, so as to determine the capacity of global electricity flows through multichannel delivery and reception and work out the supply and demand balance and the levels of sending-out/reception capacity for each continent.

See Fig. 4.57 for the reasoning framework for an analysis of global electricity flows.

Judging by the changing trend of generating costs among different energy options, the generating cost of onshore wind power in regions with better resources is competitive with fossil fuel generation. As generating costs fall further with improved economies of scale, wind power may become even more competitive. Despite its generally better resource conditions than onshore wind power, offshore wind power involves higher construction and maintenance costs. With the progress of generation technologies, ever-falling materials and manufacturing costs, and improving conversion efficiency, the cost of solar power generation will maintain a downward trend, making solar power the most important source of renewable energy generation in the future. Currently, hydropower generation is more cost-competitive than other energy resources. However, as quality resources are being depleted in regions with favorable conditions for development, accompanied by a continued shift of hydropower development into remote areas, the cost of developing and transmitting hydropower resources will continue to rise, depending on infrastructure and development conditions. In addition, ecological problems in regions with hydropower facilities will continue to haunt hydropower development in the long run. Driven by rapid growth, hydroelectric power is expected to maintain its position as the dominant source of renewable power generation until 2030. After 2030, hydropower will move into a period of sluggish growth. Currently, the cost of coal-fired generation is higher than that of most renewables. In the future, however, the internal as well as external environmental costs of coal-fired generation will increase and lead to steadily higher supply costs, due to more stringent emission control requirements governing coal-fired plants, the internalization of external costs, and coal resources of average quality beginning to be developed and utilized. Currently, ocean energy is more expensive, at a generating cost of approximately RMB 6 per kWh. Subject to restrictive development conditions and a lack of technology breakthroughs, the cost of ocean power generation will consistently be higher than that of nonhydropower renewables and conventional fossil fuels. For this reason, ocean energy holds limited promise for the future. As an important clean energy alternative, nuclear power is well-placed to play a vital role in low-carbon energy development. But given the nature of nuclear power as an energy source with a very low risk of accidents but potentially huge damage if something goes wrong, the cost of safety investments will rise continuously, translating into spiraling generating costs. Dictated by the way organic materials are collected and supplied and also the use of these materials for power generation in competition with other purposes, biomass generation offers limited room for technological improvement. As costs are unlikely to fall, the cost of biomass energy generation is expected to stay relatively high. As regards wind energy, the supply (including generation and transmission) costs of wind power in the Arctic region are expected to become more economically competitive in power-receiving regions after 2035, given the anticipated breakthroughs and upgrades of wind generation, materials and transmission technologies in extremely cold regions.

In the long run, solar energy and wind power will assume a dominant role in the electricity supply structure, made possible by a sharp decline in supply costs. Judging by the change in cost trends and with the progress of the “two-replacements” policy, solar energy (including photovoltaic and photothermal) is expected to share a dominant role in the world’s generation mix with wind power by 2050, accounting for 35% and 31%, respectively. Restricted by the availability of resources, hydropower is expected to account for 14% or so of total electricity generation by 2050, compared with a 6% share for biomass energy and others (mainly including geothermal energy). It is expected that natural gas and coal-fired generation amounting to approximately 10% of total power generation will also be required to meet the operational requirements of power systems and cater to the affordability of some of the underdeveloped regions of Asia, Africa, and South America.

See Figs. 4.58 and 4.59 for the power generation by energy type in future target years and the generation mix in 2050.

It is expected that by 2050, renewable energy generated on a centralized basis, like hydropower, wind, and solar energy, will account for 55% or so of total generation, compared with 15% for distributed generation. Wind power in the Arctic region and solar energy in the equatorial regions will account for 16% of total generation. Changes in the structure of global power supply between 2010 and 2050 are shown in Fig. 4.60