Chapter 6 - Electricity
World electricity generation nearly doubles in the IEO2007 reference case
from 2004 to 2030.
In 2030, generation in the non-OECD countries is projected
to exceed
generation in the OECD countries by 30 percent. |
In the IEO2007 reference case, world demand for electricity advances strongly
from 2004 to 2030. Global electricity generation increases by 2.4 percent
per year over the projection period, from 16,424 billion kilowatthours
in 2004 to 30,364 billion kilowatthours in 2030 (Figure 60). Much of the
growth in electric power demand is projected for nations outside the OECD.
Although the non-OECD nations consumed 26 percent less electricity than
the OECD nations in 2004, total electricity generation in the non-OECD
region in 2030 is projected to exceed generation in the OECD by 30 percent
(Figure 61).
Total electricity demand in the non-OECD nations is expected to grow from
2004 to 2030 at an annual rate that is nearly triple the rate of growth
for electricity demand in the OECD. The difference reflects the relative
maturity of electricity infrastructure in the more developed OECD region,
as well as the expectation that populations in the OECD countries generally
will grow slowly or decline over the next 25 years. In addition, fast-paced
growth in the developing non-OECD economies translates to rising standards
of living and robust growth in consumer demand for lighting and appliances.
Total electricity generation in the non-OECD region increases by an average
of 3.5 percent per year in the IEO2007 reference case, as compared with
a projected annual growth rate for OECD electricity generation that averages
1.3 percent per year from 2004 to 2030.
Among the energy end-use sectors, the most rapid growth in total world
demand for electricity is projected for the buildings (residential and
commercial) sectors. Worldwide, total electric power consumption on a Btu
basis in the buildings sectors increases by an average of 2.6 percent per
year in the IEO2007 reference case, as compared with an average growth
rate of 2.2 percent per year for total electricity consumption in the industrial
and transportation sectors combined. The most rapid rate of increase in
electricity demand is projected for the commercial sector, both worldwide
and by region, reflecting the expected growth of service activities as
strong economic growth, particularly among the non-OECD countries, increases
the demand for office space, hospitals, hotels, and other institutions
or organizations (Figure 62).
Electricity Supply by Energy Source
The mix of primary fuels used to generate electricity has changed a great
deal over the past two decades on a worldwide basis. Coal has continued
to be the fuel most widely used for electricity generation, although generation
from nuclear power increased rapidly from the 1970s through the mid-1980s,
and natural-gas-fired generation grew rapidly in the 1980s and 1990s. The
use of oil for electricity generation has been declining since the mid-1970s,
when the oil embargo by Arab producers in 1973-1974 and the Iranian Revolution
in 1979 produced oil price shocks.
More recently, high world oil prices—which have been trending upward since
2003—have further eroded the role of petroleum in the power sector. Higher
world oil prices have encouraged a shift from oil-fired generation to natural
gas and nuclear power and have reinforced coal’s important role as an energy
source for electricity generation. Today, relatively high world oil prices
in combination with concerns about the environmental consequences of greenhouse
gas emissions are raising renewed interest in nuclear power and renewable
energy sources as alternatives to the use of coal and natural gas for electric
power generation. Projections of future coal use are particularly sensitive
to assumptions about future policies that might be adopted to mitigate
greenhouse gas emissions.
Coal
In the IEO2007 reference case, while natural gas is the fastest-growing
energy source for electricity generation worldwide, coal continues to provide
the largest share of the energy used for electric power production (Figure
63). In 2004, coal-fired generation accounted for 41 percent of world electricity
supply; in 2030, its share is projected to be 45 percent. Sustained high
prices for oil and natural gas make coal-fired generation more attractive
economically, particularly in nations that are rich in coal resources,
which include China, India, and the United States. The 2.8-percent projected
annual growth rate for coal-fired electricity generation worldwide is exceeded
only by the 3.3-percent rate projected for natural-gas-fired generation.
Natural Gas
Although natural gas is the fastest-growing energy source for electric
power generation in the IEO2007 reference case projection—increasing from
3,231 billion kilowatthours in 2004 to 7,423 billion kilowatthours in 2030—the
total amount of electricity generated from natural gas continues to be
only about one-half the total for coal, even in 2030. Natural-gas-fired
combined-cycle capacity is an attractive choice for new power plants because
of its fuel efficiency, operating flexibility (it can be brought on line
in minutes rather than the hours it takes for coal-fired and other generating
capacity), relatively short construction times (months instead of the years
that coal-fired and nuclear power plants typically require), and investment
costs that are lower than those for other technologies. Natural gas also
burns more cleanly than coal or petroleum products, and as more governments
begin implementing national or regional plans to reduce carbon dioxide
emissions they may encourage the use of natural gas to displace oil and
coal.
Oil
With world oil prices projected to reach $59 per barrel (in real 2005 dollars)
at the end of the IEO2007 projection in 2030, the expected rate of increase
in oil use for electricity generation is the slowest among all energy sources.
Worldwide, oil-fired generation is projected to increase by an average
of 0.9 percent per year from 2004 to 2030; and in the OECD nations, it
is projected to decline by 0.3 percent per year. Only the non-OECD Middle
East region, with its ample oil reserves and a current one-third share
of total electricity generation fueled by oil, is projected to continue
relying heavily on oil to meet its electricity needs.
Nuclear Power
The prospects for nuclear power have improved in recent years. Higher capacity
utilization rates have been reported for many existing nuclear facilities,
and most of the existing plants in OECD countries and the countries of
non-OECD Europe and Eurasia (including Russia) are expected to be granted
extensions to their operating lives. In the IEO2007 reference case, electricity
generation from nuclear power plants worldwide is projected to increase
at an average rate of 1.3 percent per year, from 2,619 billion kilowatthours
in 2004 to 3,619 billion kilowatthours in 2030.
In past editions of the IEO, it was anticipated that nuclear generation
would decline in the later years of the projections, as aging nuclear reactors
(especially among the OECD nations) were expected to be taken out of operation
and not to be replaced. The role of nuclear power in meeting future electricity
demand has been reconsidered more recently, given concerns about rising
fossil fuel prices, energy security, and greenhouse gas emissions. On the
other hand, issues related to plant safety, radioactive waste disposal,
and the proliferation of nuclear weapons, which continue to raise public
concerns in many countries, may hinder the development of new nuclear power
reactors.
The projection for total electricity generation from the world’s nuclear
power plants in 2030 in the IEO2007 reference case is 14 percent higher
than the corresponding projection in IEO2006. On a regional basis, only
OECD Europe—where some national governments, including those of Germany
and Belgium, still have plans in place to phase out nuclear programs entirely—is
projected to see a decline in nuclear power generation after 2010. Non-OECD
Asia, in contrast, is poised for a robust expansion of nuclear generation.
For example, in China, electricity generation from nuclear power is projected
to grow at an average annual rate of 7.7 percent from 2004 to 2030, and
in India it is projected to increase by an average of 9.1 percent per year.
Hydroelectricity and Other Renewables
In the IEO2007 reference case, electricity generation from hydroelectric
and other renewable energy resources is projected to increase at an average
annual rate of 1.7 percent from 2004 to 2030. High oil and natural gas
prices, which are expected to persist in the mid-term, encourage the use
of renewables. Like nuclear power, renewable energy sources are attractive for environmental reasons.
Further, government policies and incentives to increase the use of renewable
energy sources for electricity generation encourage the development of
renewable energy even when it cannot compete economically with fossil fuels.
Nonetheless, the renewable share of world electricity generation falls
slightly in the projection, from 19 percent in 2004 to 16 percent in 2030,
as growth in the consumption of both coal and natural gas in the electricity
generation sector worldwide exceeds the growth in renewable energy consumption.
The capital costs of new power plants using renewable fuels remain relatively
high in comparison with those for plants fired with coal or natural gas.
The IEO2007 projections for hydroelectricity and other renewable energy
resources include only on-grid renewables. Non-marketed (noncommercial)
biofuels from plant and animal sources are an important source of energy,
particularly in non-OECD economies, and the International Energy Agency
has estimated that some 2.5 billion people in developing countries depend
on traditional biomass as their main fuel for cooking [1]. Non-marketed
fuels and dispersed renewables (renewable energy consumed on the site of
production, such as energy from solar panels used to heat water) are not
included in the projections, however, because comprehensive data on their
use are not available.
In combination, electricity generation from nuclear power and from renewable
energy sources is projected to increase by 1.5 percent per year from 2004
to 2030. The development of non-fossil energy sources in electricity markets
may be especially attractive to countries that are attempting to diversify
away from fossil fuels, both to address energy security issues and to reduce
carbon dioxide emissions.
Regional Electricity Markets
In the IEO2007 reference case, the highest projected growth rates for electricity
generation are for nations in the non-OECD region (Figure 64). Robust population
growth and rising personal incomes in the non-OECD nations drive the projected
growth in demand for electric power. In the OECD countries, where electric
power infrastructures are relatively mature, national populations generally
are expected to grow slowly or decline, and GDP growth is expected to be
slower than in the developing nations, increases in demand for electricity
are projected to be much slower than those in the non-OECD countries. For
example, electricity demand in OECD North America is projected to grow
by an annual average of 1.5 percent from 2004 to 2030, which is less than
one-half the projected rates of increase in China and in India.
OECD Economies
North America
In 2004, electricity generation in North America totaled 4,619 billion
kilowatthours and accounted for 28 percent of the world’s total generation.
That share is projected to decline over the course of the projection period,
as the non-OECD nations experience fast-paced growth in electric power
demand. Still, North America is projected to account for 23 percent of
the world’s electric power generation in 2030.
The United States is the largest consumer of electricity in North America
and is projected to remain in that position through 2030 (Figure 65). U.S.
electricity generation—including both generation by electric power producers
and on-site generation—is projected to increase steadily, at an average
annual rate of 1.4 percent. Canada, like the United States, has a mature
electricity market, and its generation is projected to increase by 1.5
percent per year from 2004 to 2030. Mexico’s electricity generation grows
at a faster rate—averaging 3.3 percent per year through 2030—reflecting
the relatively undeveloped state of the country’s electric power infrastructure.
There are large differences in the mix of energy sources used to generate
electricity in the three countries that make up OECD North America, and
those differences are likely to become more pronounced in the future (Figure
66). In the United States, coal is the leading source of energy for power
generation, accounting for 52 percent of the 2004 total; but in Canada,
renewable energy sources (predominantly hydroelectricity) provided 60 percent
of the nation’s electricity generation in 2004. Most of Mexico’s electricity
generation currently is fueled by petroleum-based liquids and natural gas,
which together accounted for 66 percent of its total electricity generation
in 2004. In the reference case projections for 2030, U.S. reliance on coal
is even greater than it was in 2004; Canada’s hydropower resources (along
with some generation from wind capacity scheduled to be built) continue
to provide nearly 60 percent of its electricity; and the natural gas share
of Mexico’s total electricity generation increases to 54 percent (from
35 percent in 2004).
In the United States, electricity generation from natural-gas-fired power
plants is projected to increase through 2020, as recently constructed plants
are utilized more fully to meet growing demand. After 2020, generation
from new coal-fired and nuclear power plants is expected to meet most of
the growth in electricity demand. Total generation from nuclear power plants
is projected to increase, from 789 billion kilowatthours in 2004 to 896
billion kilowatthours in 2030, as the result of expected capacity increases
that include 12,500 megawatts at newly built plants and 3,000 megawatts
from uprates of existing plants (offset by 2,600 megawatts of retirements).
Generation from renewable energy sources also is projected to expand, from
370 billion kilowatthours in 2004 to 522 billion kilowatthours in 2030,
stimulated by technology improvements, higher fossil fuel prices, and the
expansion and extension of the Federal production tax credit for renewable
generation through December 31, 2007, enacted in the Energy Policy Act
of 2005.15
In Canada, generation from natural gas and from coal is projected to increase,
and oil-fired generation is projected to decline. The Province of Ontario
had announced plans to close all its coal-fired plants by the end of 2007,
but that date has since been pushed back to 2011. Further, in late 2006,
the Ontario Power Authority recommended that the government consider maintaining
3,000 megawatts of coal-fired capacity until at least 2014 to ensure that
no power shortages would occur as a result of possible delays in the addition
of new generating capacity [2]. In the IEO2007 reference case, Canada’s
coal use for electricity generation continues to increase throughout the
projection period, by an average of 1.7 percent per year; natural-gas-fired
generation increases by 2.8 percent per year; generation from nuclear power
increases by 1.5 percent per year; and renewable generation increases by
1.3 percent per year.
Several large- and small-scale hydroelectric facilities currently are either
planned or under construction in Canada. Hydro-Québec has announced plans
to construct a 768-megawatt powerhouse near Eastman and a smaller 120-megawatt
facility at Sarcelle in Québec, both of which are expected to be fully
commissioned by 2011 [3]. Other planned hydroelectric projects include
a 1,550-megawatt plant at La Romaine in Québec, a 2,000-megawatt project
at the Lower Churchill River/Gull Island site in Newfoundland and Labrador,
and a 1,500-megawatt project (the Conawapa Generating Station) on the Lower
Nelson River in Manitoba [4]. The IEO2007 reference case does not anticipate
that all the planned projects will be constructed, but given Canada’s historical
experience with hydropower and the commitments for construction, new hydroelectric
capacity accounts for more than one-half of the 16,000 megawatts of additional
renewable capacity projected to be added in Canada between 2004 and 2030.
While hydropower plays a major role in Canada’s renewable electricity generation,
the country also has plans to expand wind-powered generating capacity in
the future. In 2006, the country’s installed wind capacity was doubled,
to 1,460 megawatts, giving Canada the world’s twelfth-largest national
installed wind capacity [5]. In the Canadian government’s 2005 budget,
its Wind Power Production Incentive (WPPI) was expanded to support the
development of 4,000 megawatts of wind power by 2010, with qualifying wind
producers eligible to receive an incentive of $0.01 per kilowatthour (Canadian
dollars) for the first 10 years of production from new installations [6].
In addition, several Provincial governments have instituted their own incentives
to support the construction of new wind capacity. The incentives (along
with sustained higher world oil and natural gas prices) are expected to
support the projected increase in Canada’s use of wind power for electricity
generation.
OECD Europe
Electricity generation in the nations of OECD Europe is projected to grow
slowly, as a result of their slow population growth and their already well-established
electricity markets. The region’s total generation increases by an average
of 0.8 percent per year in the IEO2007 reference case, from 3,250 billion
kilowatthours in 2004 to 3,564 billion kilowatthours in 2015 and 4,044
billion kilowatthours in 2030. Natural gas is expected to be by far the
fastest-growing fuel for electricity generation in OECD Europe, increasing
at an average rate of 3.3 percent per year from 2004 to 2030, while high
world oil prices and environmental concerns lead to decreases in the use
of petroleum and coal (Figure 67).
Renewable electricity generation in OECD Europe is also projected to increase
over the period from 2004 to 2030. The use of renewables (primarily nonhydropower)
for electricity generation is projected to grow by 1.4 percent per year
on average from 2004 to 2030. Although most of the economically feasible
hydroelectric resources in Europe already have been developed, the countries
of OECD Europe have installed substantial amounts of alternative renewable
energy capacity— consisting mainly of wind turbines—over the past several
years. At present, 7 of the world’s 10 largest markets for wind-powered
electricity generation are in Europe,16 and the 27-member European Union
accounted for 65 percent of the world’s total installed wind capacity as
of the end of 2006 [7]. With many European countries setting new goals
to increase nonhydropower renewable electricity generation, the role of
wind power in meeting OECD Europe’s electricity demand is likely to grow
in the future.
Several countries in OECD Europe have policies in effect to reduce their
use of nuclear power in the future. As a result, nuclear electricity generation
in the region is projected to decline through 2025. After 2025, however,
modest growth is projected for the region’s nuclear power capacity, and
its total nuclear electricity generation begins to rise at the end of the
projection. In the IEO2007 reference case, nuclear capacity in OECD Europe
is projected to fall from 134 gigawatts in 2004 to 114 gigawatts in 2030
(as compared with the larger decline projected in the IEO2006 reference
case, to 95 gigawatts in 2030). Many nations in the region are reassessing
the potential role of nuclear power in meeting demand for electricity,
particularly because it is an energy source that does not produce carbon
dioxide emissions. As a result, the IEO2007 reference case projection anticipates
that more nuclear power plant operating lives will be extended and fewer
plants will be retired in the mid-term, and that there will be some new
builds of nuclear capacity in France, Finland, and possibly other countries
in OECD Europe.
OECD Asia
Total electricity generation in OECD Asia is projected to increase by 1.4
percent per year on average, from 1,586 billion kilowatthours in 2004 to
2,259 billion kilowatthours in 2030. Japan accounts for the largest share
of electricity generation in the region today and continues to do so in
the mid-term projection, despite its having the slowest-growing electricity
market in the region (Figure 68). Japan’s electricity generation increases
at a 1.0-percent average annual rate in the IEO2007 reference case, as
compared with projected rates of 1.4 percent per year in Australia/New
Zealand and 2.3 percent per year in South Korea. Japan’s electricity markets
can be characterized as mature, and its aging population and relatively
slow projected economic growth in the mid-term translate to slow growth
in demand for electric power. In contrast, both Australia/New Zealand and
South Korea are projected to have more robust income and population growth
in the mid-term, leading to more rapid growth in demand for electricity.
The fuel mix for electricity generation varies widely among the three economies
that make up the OECD Asia region (Figure 69). In Japan, natural gas, coal,
and nuclear power make up the bulk of the current electric power mix, with
natural gas and nuclear accounting for about 56 percent of total generation
and coal another 25 percent. The remaining portion is split between renewables
and petroleum-based liquids. In 2030, Japan is projected to rely on natural
gas, nuclear power, and coal for about 83 percent of its electric power
supply, with coal’s share declining to 19 percent as both natural gas and
nuclear power displace its use.
Australia and New Zealand, with their rich coal resources, rely on coal
for nearly three-fourths of their combined electricity generation. Another
18 percent comes from renewable energy sources—primarily, hydropower. The
Australia/New Zealand region uses negligible amounts of oil for electricity
generation and no nuclear power, and that is not expected to change over
the projection period. Natural-gas-fired generation is expected to grow
strongly in the region, reducing coal’s share in 2030.
In South Korea, coal and nuclear power currently provide 44 percent and
36 percent of total electricity generation, respectively. Strong expansion
is projected for South Korea’s nuclear power program: in 2030, nuclear
electricity generation is projected to be nearly equal to coal-fired generation,
with both providing about 41 percent of the country’s total electricity.
Non-OECD Economies
Non-OECD Europe and Eurasia
Total electricity generation in non-OECD Europe and Eurasia is projected
to grow at an average rate of 2.3 percent per year in the IEO2007 reference
case, from 1,497 billion kilowatthours in 2004 to 2,036 billion kilowatthours
in 2015 and 2,731 billion kilowatthours in 2030. Russia, the region’s largest
economy, accounted for 59 percent of its total generation in 2004 and is
projected to account for 55 percent of the regional total in 2030 (Figure
70).
The non-OECD Europe and Eurasia region as a whole possesses ample natural
gas resources. As a result, it is expected that much of its electricity
supply will continue to be provided from natural-gas-fired power plants.
Natural gas is the region’s fastest-growing source of electric power in
the IEO2007 reference case, increasing by 3.2 percent per year from 2004
to 2030. Coal-fired and nuclear power plants also are important regional
sources of electricity generation, with projected annual increases averaging
2.2 percent and 2.3 percent, respectively, over the same period. Renewable
generation, largely from hydroelectric facilities, is projected to increase
more slowly, at an average rate of 0.7 percent per year, largely as a result
of repairs and expansions at existing hydroelectric projects rather than
new hydropower or nonhydropower renewable generating facilities. Liquids
play only a minor role in the electric power markets of non-OECD Europe
and Eurasia, and their role is not expected to expand in the future.
Russia has announced plans to increase its nuclear power capacity over
the mid-term, in order to lessen the reliance of its power sector on natural
gas and preserve what is becoming one of its most valuable export commodities.
As a result, electricity production from Russia’s nuclear power plants
is projected to grow by 3.2 percent per year on average in the reference
case, while natural-gas-fired generation increases at the slower rate of
2.5 percent per year.
Only 3 gigawatts of new nuclear generating capacity has become operational
in Russia since 1991. In 2006, Russian Prime Minister Mikhail Fradkov approved
an ambitious plan to complete the construction of 10 new 1,000-megawatt
reactors and begin construction on another 10 reactors by 2015 [8]. There
is some question, however, as to whether the plan can be achieved within
the announced time frame. One problem is that tariffs on nuclear power
currently are much lower than those on thermal generation, and in the past
the Russian nuclear power industry has not had sufficient funds to complete
the construction on new reactors on schedule. The Russian government has
acknowledged that raising nuclear tariffs to parity with the tariffs on
thermal generation will be necessary to attract the private-sector capital
investment needed for its nuclear power expansion plan to succeed, and
the plan includes assumptions that both capital costs and operating costs
will be reduced. Nevertheless, the IEO2007 reference case projects some
delay in meeting the current construction schedule. In the outlook, a net
5 gigawatts of nuclear capacity is added to Russia’s existing 22 gigawatts
by 2015. Thereafter, it is likely that another 15 gigawatts of nuclear
capacity will be added by 2030.
Non-OECD Asia
Non-OECD Asia—led by China and India—is projected to be the region with
the fastest growth in electric power generation worldwide, averaging 4.2
percent per year from 2004 to 2030. The nations of non-OECD Asia are expected
to see continued robust economic growth, with corresponding increases in
demand for electricity to power lighting, heating and cooling, household
appliances, and other electronic devices associated with rising standards
of living. Total electricity generation in the non-OECD Asia region nearly
triples over the projection period, from 3,517 billion kilowatthours in
2004 to 10,185 billion kilowatthours in 2030 (Figure 71).
China and India account for the world’s largest projected increases in
national electric power demand over the 2004 to 2030 period. China already
is the world’s largest coal consumer, and India is the third largest (after
the United States). In 2004, the combined coal use of China and India was
equal to that of the entire OECD region, and in 2030 it is projected to
exceed the OECD total by more than 85 percent. A sizable portion of the
coal consumed in China and India is expected to be used for power generation.
In China, the coal share of generation is projected to reach 84 percent
in 2030, despite higher annual growth rates for natural-gas-fired and nuclear
power generation (Figure 72). In India, coal’s share is projected to decline
to 69 percent of the country’s total power generation in 2030.
In both China and India, consumption of petroleum liquids for electricity
generation is projected to remain modest, as relatively high world oil
prices make other fuels economically more attractive. Some increases in
oil use for electricity generation are projected for other countries in
the region, because many rural areas that currently do not have access
to transmission lines are expected to replace noncommercial energy sources
with electricity from diesel-fired generators until transmission infrastructure
can be put into place. Nevertheless, the liquids share of electricity generation
in non-OECD Asia is projected to fall from 4 percent in 2004 to 2 percent
in 2030.
Non-OECD Asia is expected to lead the world in the installation of new
nuclear capacity over the projection period, accounting for 51 percent
of the projected net increment in nuclear capacity worldwide. China is
projected to add 36 gigawatts of nuclear capacity by 2030, India 17 gigawatts,
and the other countries of non-OECD Asia a combined 6 gigawatts. Strong
growth in nuclear capacity in China and India will help both countries
improve fuel diversification in their power sectors, although thermal generation
will continue to dominate in both countries. In China, the nuclear share
of total electricity generation is projected to rise from 2 percent in
2004 to 5 percent in 2030, and in India it is projected to rise from 2
percent to 8 percent.
Although electricity generation from renewable energy sources is projected
to grow at an average annual rate of 2.0 percent, the renewable share of
total generation declines as the shares if fossil fuels and nuclear power
grow more strongly in the region. The renewable share of non-OECD Asian
generation falls from 16 percent in 2004 to 9 percent in 2030. Much of
the growth in non-OECD Asia’s renewable energy consumption is projected
to come from mid- to large-scale hydroelectric facilities. Several countries
in the region have hydropower facilities either planned or under construction.
In India, for instance, about 12,020 megawatts of hydroelectric capacity
is under construction, and letters of award have been issued for the 1,000-megawatt
Tehri Pass project (scheduled for completion by 2012) and the 1,200-megawatt
Kotlibhel-IA project [9]. China also has a number of large-scale hydroelectric
projects under construction, including the 18,200-megawatt Three Gorges
Dam project (expected to be fully operational by 2009) and the 12,600-megawatt
Xiluodu project on the Jisha River (scheduled for completion in 2020, as
part of a 14-facility hydropower development plan) [10].
Middle East
Electric power generation in the Middle East region is projected to grow
by 2.9 percent per year, from 567 billion kilowatthours in 2004 to 1,185
billion kilowatthours in 2030 (Figure 73). Most of the countries in the
Middle East region have well-established electricity infrastructures, with
electrification rates above 90 percent [11]. (Yemen, the region’s poorest
economy, is the exception, with only an estimated 50 percent of the population
having access to electric power in 2002.) Nevertheless, population and
income growth in the region are expected to result in growing demand for
electric power in the future.
Natural gas is the largest source of energy for electricity generation
in the Middle East, and it is expected to continue in that role. In 2004,
natural-gas-fired generation accounted for 58 percent of the region’s total
power supply. In 2030, the natural gas share is projected to be 61 percent,
as the petroleum share of generation decreases slightly over the projection
period. Petroleum is a valuable export commodity for many nations of the
Middle East, and there is increasing interest in the use of domestic natural
gas for electricity generation in order to make more oil assets available
for export.
The Middle East is the only region in the world where petroleum liquids
are expected to continue accounting for a sizable portion of the fuel mix
for electricity generation throughout the projection period. The Middle
East region as a whole relied on oil-fired capacity to meet 34 percent
of its total generation needs in 2004, and that share is projected to fall
only slightly, to 32 percent, in 2030. The rich petroleum resources in
the Middle East are expected to allow nations of the region to continue
using oil for electricity generation, even as high world oil prices result
in the displacement of oil in other regions. Oil-fired generation in the
Middle East is projected to increase by an average of 2.6 percent per year
from 2004 to 2030.
Other energy sources make only minor contributions to the Middle East region’s
electricity supply. Israel is the only country in the region that uses
significant amounts of coal to generate electric power [12], and Iran is
the only one projected to add nuclear capacity, with completion of its
Bushehr 1 reactor expected by 2010. Finally, because there is little incentive
for countries in the Middle East to increase their use of renewable energy
sources, renewables are projected to account for a modest 2 percent of
the region’s total electricity generation throughout the projection period.
Africa
In Africa, demand for electricity is projected to grow at an average annual
rate of 3.5 percent in the IEO2007 reference case. Thermal generation accounted
for most of the region’s total electricity supply in 2004 and is expected
to be in the same position through 2030. Coal-fired power plants, which
were the region’s largest source of electricity in 2004, accounting for
45 percent of total generation, are projected to provide a 46-percent share
in 2030, as natural-gas-fired generation expands strongly from 25 percent
of the total in 2004 to 38 percent in 2030 (Figure 74).
At present, South Africa’s two nuclear reactors are the only ones operating
in the region, accounting for about 3 percent of Africa’s total electricity
generation. In the IEO2007 reference case, 1,000 megawatts of new nuclear
capacity (net) is projected to become operational in Africa over the 2004
to 2030 period; however, the nuclear share of total generation is expected
to fall to 2 percent in 2030.
Hydroelectricity and other marketed renewable energy sources are expected
to grow slowly in Africa. As they have in the past, non-marketed renewables
can be expected to continue providing energy to Africa’s rural areas; however,
it is often difficult for African nations to find funding or international
support for larger commercial projects. Still, plans for several hydroelectric
projects in the region have been advanced recently, and they may help boost
supplies of marketed renewable energy in the mid-term. Several (although
not all) of the announced projects are expected to be completed in the
mid-term outlook, allowing the region’s consumption of marketed renewable
energy to grow by 0.7 percent per year from 2004 to 2030.
In 2006, the Export-Import Bank of China signed a memorandum of understanding
with the government of Mozambique to provide a $2.3 billion loan package
that would include construction of the 1,300-megawatt Mphanda Nkuwa hydroelectric
dam on the Zambezi River [13]. In addition, there are plans to expand the
existing hydroelectric facility at Cahora Bassa and to construct a new
North Bank Cahora Bassa dam. The African Development Fund has estimated
that the additions could increase Mozambique’s installed generating capacity
by 2,000 megawatts and raise its national electrification rate from 6 percent
in 2006 to 20 percent in 2020 [14]. In Angola, there are plans to refurbish
existing hydropower facilities at Capanda and Cambambe and increase their
capacity to 520 megawatts and 700 megawatts, respectively in the near term
[15]. Nigeria has plans to expand its renewable generating capacity by
3,500 megawatts in the mid-term, mostly in the form of small hydroelectric
projects, in an attempt to diversify the country’s energy mix away from
oil and natural gas [16].
Central and South America
Electricity generation in Central and South America is projected to increase
steadily in the IEO2007 reference case, from 882 billion kilowatthours
in 2004 to 1,838 billion kilowatthours in 2030 (Figure 75). Brazil, the
region’s largest economy, is expected to remain its largest electricity
producer as well, accounting for 54 percent of total projected electricity
generation in the Central and South America region in 2030.
Throughout Central and South America, significant shares of national electric
power supplies are derived from renewable energy sources—primarily, hydropower.
In times of drought, such heavy reliance on hydroelectricity has been problematic,
resulting in widespread power shortages. Hydroelectric generation accounted
for 83 percent of Brazil’s total electricity supply in 2004, and despite
ongoing efforts to diversify the fuel mix for the country’s electricity
generation, hydropower is projected to remain Brazil’s predominant source
of electricity through 2030 (Figure 76). In combination, the other nations
of Central and South America rely on hydropower for a smaller percentage
of their electricity supply (51 percent in 2004); and in 2030, the share
of hydropower and other renewable energy sources in their combined fuel
use for electricity generation is projected to be 47 percent. Robust growth
in the use of natural gas and nuclear power is projected to lessen the
region’s overall reliance on hydropower in the mid-term.
Notes and Sources
References
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