Global installed power generation capacity is forecast to rise from 6,292GW in 2015 to 9,417GW in 2030, with electricity generation rising from 24,240TWh to 33,560TWh during the same period. To meet demand, electricity generation will rise by 38.5% between 2015 and 2030, and installed capacity will grow by 49.7%. All fuel sources, apart from oil, will expand, but coal will remain the dominant fuel source throughout the forecast period, accounting for 24.9% of installed capacity and nearly 32.5% of generation in 2030. However, gas will nearly reach the capacity of coal by 2030.
Changes to Frost & Sullivan’s forecast include:
The future of gas and coal
While gas-fired capacity will see a substantial net increase in most regions of the world, overall coal-fired capacities will grow significantly only in emerging regions, specifically in China and India, though expansion is also envisaged for other developing Asian countries. Coal-based capacity will decline substantially in both Europe and North America as new emission legislation come into force.
Gas-fired additions are driven by the need for cleaner and more flexible generating systems and by the growing gas output around the world. Capacity expansion from 2010 to 2020 is driven by North America and the Middle East, adding 102GW and 96GW respectively. China will be the leading region in the decade following.
Progress in the penetration of carbon-free power generation will accelerate substantially throughout the next few years, as the global share reaches 38.1% by 2020. Key contributors are large-scale expansion of renewables in Asia (driven by China and India in particular), the ongoing and expected recovery of nuclear generation in Japan, a slower expansion of coal-fired generation in China, and coal plant closures in Europe – as a result of the implementation of the Industrial Emissions Directive.
The decade after 2020 will be marked by a continued expansion of renewable energy and – in the Eastern Hemisphere at least – nuclear power. Carbon-free electricity’s share is slated to reach 43.9% in 2030. The growth impetus in Asia will gradually shift from China to India, and carbon-free power will also start to penetrate the Middle East more rapidly.
Europe will maintain its global leadership in clean energy, as less than one-third of the EU’s power will come from fossil fuels by 2030.
Shifting power balance
Traditionally developed regions will lose ground to emerging markets, where rapid urbanization and the creation of a middle class will drive electricity demand. The bulk of this growth is anticipated to come from developing Asia (China, India, and other developing Asia), with the combined share of these regions rising from 29.6% in 2010 to 35.6% in 2015, to reach 43.4% in 2030. Indeed, China overtook North America in total generation in the year 2013.
From 2015 to 2030, the combined share of the developed regions of European Union (EU), North America, and Organization for Economic Cooperation and Development (OECD) Asia-Pacific (APAC) will drop from 42.7% to 34.1%. The combined share of the Middle East and African region, meanwhile, will increase from 7.5% in 2015 to 8.9% in 2030. Russia, on the other hand, struggling with population declines and a weakened investment environment, will see its share of global power output falling from 4.5% to 3.8%.
India leading in demand
Electricity demand between 2015 and 2030 will rise the fastest in India, at a compound annual growth rate (CAGR) of 5.0%, followed by other developing Asian countries and Africa, both at 3.9%. China comes in third, at 3.1%, followed by the Middle East (2.9%) and Latin America (2.8%). Conversely, the European, North American, and the OECD APAC regions will record much lower rates of growth, with the EU achieving the lowest demand growth, at an average of only 0.6% during the period. Low population growth, an increasing focus on energy efficiency, and reduced industrial production are forecast to curtail demand growth.
By far the largest growth difference between the two time periods above will be in China, as economic growth declines, the population stabilizes, and energy use becomes more efficient. India and other emerging Asian nations, meanwhile, maintain a high rate of growth post-2020. Africa’s potential becomes more realized during the next decade, leading to an acceleration in power demand growth.
The EU is the only region where 2020 generation is predicted below the level of 2010, reflecting the depth of the downturn there and a strong regional focus on energy efficiency.
Nuclear revival in the East
The growth outlook for nuclear power has weakened significantly since the Fukushima incident. Europe, in particular, is largely turning away from the fuel, with the leading power market Germany gradually phasing it out – though the United Kingdom is planning new builds. Successive editions of this study have downgraded nuclear’s share of world electricity generation in 2030 from 14.0%, 13.0%, and 11.6%. It has been revised slightly upwards to 11.8% due to an expected resumption of nuclear output in Japan.Nuclear power’s share of electricity generation is currently the strongest in Europe, where the fuel accounted for 27.6% of the total in 2015. The leading nuclear power generating nation is France (representing 79% of the EU total), followed by Germany, Sweden, the United Kingdom, and Spain. Nuclear power’s share in the EU will decline to 22.4% in 2030. Nuclear power is also declining in North America, where the proliferation of cheap natural gas renders nuclear increasingly uncompetitive.
Market growth is increasingly confined to the Eastern regions of the world, including Russia, China, and India. China’s output will grow dramatically to reach 9.4% of the total, with India’s to account for 6.3% of the total by 2030. Japan is now expected to see a strong recovery of nuclear output following the gradual restart of reactors from 2015 onward, though previous highs are not expected to be achieved.
Solar PV the star renewable
The forecasts for solar PV have been upgraded substantially since the previous forecast. The historical rate of increase in solar PV capacity has been truly astounding, with capacity rising from below 1GW in the year 2000 to 215GW in 2015. Future solar PV capacity is forecast to reach 435GW in 2020 and 834GW in 2030. Solar PV is forecast to take over from wind as the leading technology in terms of future global net renewable energy capacity additions, accounting for 37.7% of the total from 2015 to 2030.
Recent solar PV capacity additions have been dominated by the EU, which represented 36% of 2010 to 2015 additions. Led by Germany, EU installed capacity in 2015 (94GW) far exceeds that of any other region and corresponds to 44% of the global total. Future growth, however, will increasingly be driven by Asia. China will dominate the next few years, accounting for 40% of 2015 to 2020 additions, before market growth declines as saturation increases. India is expected to witness a massive acceleration, with impetus expected to be sustained over the long term.
North America is starting to realize some of its massive solar PV potential with the market growing gradually. Regional additions are driven by the United States, boosted by declining component prices and a rapidly growing residential sector complementing commercial deployments.
Frost & Sullivan
About the author: Harald Thaler is the Industry Director of Energy & Power at Frost & Sullivan and can be reached at 877.463.7678.