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According to the IEA, electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026. Factor in the global push to EVs.

Please consider the International Energy Agency IEA Electricity Analysis Report 2024-2026.

IEA Notable Points

Global electricity demand rose moderately in 2023 but is set to grow faster through 2026
Global electricity demand is expected to rise at a faster rate over the next three years, growing by an average of 3.4% annually through 2026.
Electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026.
About 85% of additional electricity demand through 2026 is set to come from outside advanced economies
China provides the largest share of global electricity demand growth in terms of volume, but India posts the fastest growth rate through 2026 among major economies.
EU electricity consumption is not expected to return to 2021 levels until 2026 at the earliest. Electricity prices for energy-intensive industries in the European Union in 2023 were almost double those in the United States and China.
Despite energy prices falling from their previous record highs, EU electricity demand further declined in 2023. Lower industrial electricity demand was the most important factor, as in the previous year.
Renewables are set to provide more than one-third of total electricity generation globally by early 2025, overtaking coal. The share of renewables in electricity generation is forecast to rise from 30% in 2023 to 37% in 2026, with the growth largely supported by the expansion of ever cheaper solar PV.
By 2025, global nuclear generation is forecast to exceed its previous record set in 2021.
Global CO2 emissions from electricity generation are expected to fall by more than 2% in 2024 after increasing by 1% in 2023.

…click. on the above link to read the rest of the article…

Today’s Energy Predicament – A Look at Some Charts

September 1, 2020

Today’s Energy Predicament – A Look at Some Charts

Today’s energy predicament is a strange situation that most modelers have never really considered. Let me explain some of the issues I see, using some charts.

[1] It is probably not possible to reduce current energy consumption by 80% or more without dramatically reducing population.

A glance at energy consumption per capita for a few countries suggests that cold countries tend to use a lot more energy per person than warm, wet countries.

Figure 1. Energy consumption per capita in 2019 in selected countries based on data from BP’s 2020 Statistical Review of World Energy.

This shouldn’t be a big surprise: Our predecessors in Africa didn’t need much energy. But as humans moved to colder areas, they needed extra warmth, and this required extra energy. The extra energy today is used to build sturdier homes and vehicles, to heat and operate those homes and vehicles, and to build the factories, roads and other structures needed to keep the whole operation going.

Saudi Arabia (not shown on Figure 1) is an example of a hot, dry country that uses a lot of energy. Its energy consumption per capita in 2019 (322 GJ per capita) was very close to that of Norway. It needs to keep its population cool, besides running its large oil operation.

If the entire world population could adopt the lifestyle of Bangladesh or India, we could indeed get our energy consumption down to a very low level. But this is difficult to do when the climate doesn’t cooperate. This means that if energy usage needs to fall dramatically, population will probably need to fall in areas where heating or air conditioning are essential for living.

…click on the above link to read the rest of the article…

Visualizing America’s Energy Use, in One Giant Chart

May 8, 2020

Visualizing America’s Energy Use, in One Giant Chart

Have you ever wondered where the country’s energy comes from, and how exactly it gets used?

Well now, thanks to Visual Capitalist’s Jeff Desjardins, we have the answer as The Lawrence Livermore National Laboratory (LLNL) crunches the numbers every year, outputting an incredible flow diagram that covers the broad spectrum of U.S. energy use.

The 2019 version of this comprehensive diagram gives us an in-depth picture of the U.S. energy ecosystem, showing not only where energy originates by fuel source (i.e. wind, oil, natural gas, etc.) but also how it’s ultimately consumed by sector.

In Perspective: 2019 Energy Use

Below, we’ll use the unit of quads, with each quad worth 1 quadrillion BTUs, to compare data for the last five years of energy use in the United States. Each quad has roughly the same amount of energy as contained in 185 million barrels of crude oil.

Interestingly, overall energy use in the U.S. actually decreased to 100.2 quads in 2019, similar to a decrease last seen in 2015.

It’s also worth noting that the percentage of fossil fuels used in the 2019 energy mix decreased by 0.2% from last year to make up 80.0% of the total. This effectively negates the small rise of fossil fuel usage that occurred in 2018.

Energy Use by Source

Which sources of energy are seeing more use, as a percentage of the total energy mix?

Since 2015, natural gas has grown from 29% to 32% of the U.S. energy mix — while coal’s role in the mix has dropped by 4.7%.

In these terms, it can be hard to see growth in renewables, but looking at the data in more absolute terms can tell a different story. For example, in 2015 solar added 0.532 quads of energy to the mix, while in 2019 it accounted for 1.04 quads — a 95% increase.

…click on the above link to read the rest of the article…

Coronavirus Could Crush Natgas Market Amid Collapsing Chinese Demand

February 12, 2020

Coronavirus Could Crush Natgas Market Amid Collapsing Chinese Demand

Last week we warned that the drop in Chinese petroleum consumption could spark one of the “biggest shocks to oil markets since the Lehman crisis.” Now it seems the fast-moving contagion has spread to liquefied natural gas (LNG) markets, Fitch Ratings detailed in a new report.

LNG markets in Europe and Asia could experience a shock as Chinese imports of LNG are expected to plunge. The hopes for a rebalanced market have been delayed thanks to the coronavirus outbreak.

The decline in Chinese energy consumption is a severe event risk that needs to be monitored.

Already, commodity spot prices and shipping rates have fallen, suggesting world trade growth could take a big hit in Q1.

LNG importers in China have announced they could cut 70% of seaborne imports in February. Tanker rates for LNG to Europe to the Asia Pacific to the Middle East to the Americas have dropped in the last 30 days.

Fitch notes that Chinese LNG imports account for 17% of global purchases in 2018 and 50% of global demand growth in 2016-2018. Any lapse in demand from China could be devastating for the global LNG markets and commodity-based economies.

Massive demand loss from China will weigh on spot natgas prices this year. It could lead to lower business activity and force some companies into a credit crisis.

The global LNG market was already oversupplied in 2019 amid additional output from Australia, Russia, and the US, which is coming at a time when the global economy is decelerating. Warmer weather in the US, Europe, and Asia has undoubtedly led to an uptick in gas storage. Spot prices for natgas have plunged 40% in the last three months.

…click on the above link to read the rest of the article…

The true feasibility of moving away from fossil fuels

April 10, 2019

The true feasibility of moving away from fossil fuels

One of the great misconceptions of our time is the belief that we can move away from fossil fuels if we make suitable choices on fuels. In one view, we can make the transition to a low-energy economy powered by wind, water, and solar. In other versions, we might include some other energy sources, such as biofuels or nuclear, but the story is not very different.

The problem is the same regardless of what lower bound a person chooses: our economy is way too dependent on consuming an amount of energy that grows with each added human participant in the economy. This added energy is necessary because each person needs food, transportation, housing, and clothing, all of which are dependent upon energy consumption. The economy operates under the laws of physics, and history shows disturbing outcomes if energy consumption per capita declines.

There are a number of issues:

The impact of alternative energy sources is smaller than commonly believed.
When countries have reduced their energy consumption per capita by significant amounts, the results have been very unsatisfactory.
Energy consumption plays a bigger role in our lives than most of us imagine.
It seems likely that fossil fuels will leave us before we can leave them.
The timing of when fossil fuels will leave us seems to depend on when central banks lose their ability to stimulate the economy through lower interest rates.
If fossil fuels leave us, the result could be the collapse of financial systems and governments.

[1] Wind, water and solar provide only a small share of energy consumption today; any transition to the use of renewables alone would have huge repercussions.

According to BP 2018 Statistical Review of World Energy data, wind, water and solar only accounted for 9.4% 0f total energy consumption in 2017.

…click on the above link to read the rest of the article…

Economic Breakdown Starts In East Asia due to Collapsed Births & Childbearing Populations

January 12, 2019

Economic Breakdown Starts In East Asia due to Collapsed Births & Childbearing Populations

The floor under the East Asia neighborhood (consisting of China, Japan, South / North Korea, Taiwan, & Mongolia) is about to fall away. These nations (combined) equal slightly more than 20% of the global population and consume 27% of total global energy. From 2000 through 2016, this region (spearheaded by China) represented 48% of the global growth in total energy consumption. So, when I tell you these countries are economically entering long-term domestic declines (or perhaps outright collapses), the impacts will reverberate everywhere.

Why domestic economic decline or collapse? This is simply following a massive population decline which has already taken place (past tense). The chart below details the 44% fall in births since the double peaks seen in East Asia in ’67 and ’89. This is an ongoing birth dearth of over 14 million fewer annually, since 1995. Now this birth dearth will be compounded by the rapidly falling childbearing population of 15 to 39yr/olds, represented by the red line below (I exclude the 40+yr/olds because they simply have so few children as to simply create distraction). By 2035, the East Asia child bearing population will decline by 30% or -202 million (no estimation, this population is already born and will just shift forward). Absent some seismic shift (or turning away from the inflationary urbanization underway?), births will continue to tumble and national populations will ultimately likewise crumble.

Noteworthy above is the low water mark of just 15 million births in 1996…and the muted L shaped aftermath. Those born in 1996 will be 23 years old in 2019, or generally entering adulthood. On an annual basis, this is a relatively sudden 50%+ decline in new adults, new potential employees, new potential parents, new potential consumers entering the economy…and this is just the start of the “new normal”.

…click on the above link to read the rest of the article…

Every Big Bit Helps

October 26, 2018

Every Big Bit Helps

The post describes how new supercritical CO2 Brayton Cycle turbines may revolutionise the efficiency of electricty generation. Background image, existing Rankine Cycle steam turbine. Foreground, Brayton Cycle turbine with same power rating.

Let’s say you and I need to move 1 million tons of sand. You show up to the site with a backhoe and a dump truck, and I show up with a teaspoon. Naturally you ask me what the heck I’m planning to do with that teaspoon. I answer seriously with “Every little bit helps.”

Would you think me rational?

The problem with people advocating reducing carbon dioxide emissions is they are frequently bringing a teaspoon to do the work. Oh, they don’t call it a teaspoon, they’ll show you all sorts of fanciful projections and imaginary outcomes, but at the end of the day, it is still a teaspoon. And no, the teaspoon doesn’t help – we are wasting time energy and money on things that have no hope of moving that mountain.

The U.S. EIA International Energy Outlook 2017 projects that world energy consumption will grow by 28% between 2015 and 2040. Most of this growth is expected to come from countries that are not in the Organization for Economic Cooperation and Development (OECD). Non-OECD Asia (which includes China and India) accounts for more than 60% of the world’s total anticipated increase in energy consumption.

The world currently uses nearly 22,000 TWh/yr. of electricity. But this is far less than what we need. If the world, everyone on it, used electricity as frugally as Europeans, we would need approximately 34,617 TWh/yr. So we need a LOT more electricity. That is just electricity mind you – if we go to electric cars we need much more than that to power transportation.

…click on the above link to read the rest of the article…

Global Energy Consumption Soars To New Heights

June 21, 2018

Global Energy Consumption Soars To New Heights

This week the 2018 BP Statistical Review of World Energy was released, which covers energy data through 2017. It is the definitive source for global energy production and consumption figures, and a primary source of data for numerous companies, government agencies and non-government organizations.

I will take a deeper dive into the report in upcoming articles, but today I want to cover some of the highlights.

First, the report shows that the world achieved a new oil production record of 92.6 million barrels per day (BPD), which is the 8th straight year global oil production has increased. The United States was the world’s top oil producer in 2017, exceeding 13 million BPD* for the first time ever. Saudi Arabia was second at 12.0 million BPD, while Russia came in at 11.3 million BPD.

Oil consumption, which is quite a bit higher due to the inclusion of biofuels and fuels derived from coal and natural gas, also set a new record of 98.2 million BPD. U.S. consumption rose by 1.0%, and still leads the world at 19.9 million BPD. China’s demand rose by 4% to a new record of 12.8 million BPD.

Global natural gas production jumped 3.0% to a new record of 355 billion cubic feet per day. The U.S. led all countries in both production and consumption of natural gas.

Global coal consumption increased by 1.0%, but remains 3.5% below the peak reached in 2013. Coal consumption declined in the U.S. and European Union, but crept 0.5% higher in China. China remains the world’s top coal market, with the country consuming 50.7% of the world’s coal in 2017.

Renewables continue to grow at a torrid pace. Global solar power consumption increased by 35%, while wind power consumption rose 17% over 2016.

…click on the above link to read the rest of the article…

“Will The Real Global Economy Please Stand Up”

June 11, 2018

“Will The Real Global Economy Please Stand Up”

To say I’ve become skeptical of “markets” and their movements is probably an understatement. However, rather than waste more time trying to make sense of these skewed markets, I believe real economic activity is more accurately represented by changing populations and their energy consumption. So today, we’ll play a little “To Tell The Truth”, an old television show where two imposters could lie but one contestant had to tell the truth. The celebs would ask questions and then attempt to pick which contestant was the real deal. I’ll lay out the data and let you determine how well this lines up with non-stop narrative of record market valuations and stories of strong economic activity.

I’ll start with Japan and work my up progressively larger. The population data is from the UN and I use the 15 to 60 year old population to avoid speculation about changing birth rates over the next fifteen years. Energy data is from the US Energy Information Administration (EIA) and their projections using their IEO’17 (International Energy Outlook, 2017) models.

Japan

Core population peaked 1993, declined 14% since (as of 2015), will decline 22% by 2030 and 33% by 2040.
Energy consumption peak 2006, declined 17% since
- My est. -25% by 2030, -30% by 2040
- IEO’17 est. +3% by 2030, unchanged by 2040.

Germany

Core population peaked 1995, declined 5% since, will decline 17% by 2030 and 19% by 2040.
Energy consumption peaked 2006, declined 14% since, will decline 22% by 2030 and 28% by 2040. IEO’17 data will be wrapped together for EU below.

Italy

Core population peaked 2005, declined 4% since. Will decline 17% by 2030 and 25% by 2040.
Energy consumption peaked 2005, declined 17% since. I estimate declines of 26% by 2030 and 32% by 2040.

Greece

Core population peaked 2006, declined 5% since. Will decline 15% by 2030, 29% by 2040.
Energy Consumption peaked 2007, declined 27% since. I estimate declines of 40% by 2030, 47% by 2040

…click on the above link to read the rest of the article…

Our Energy Problem Is a Quantity Problem

May 31, 2018

Reading many of today’s energy articles, it is easy to get the impression that our energy problem is a quality problem—some energy is polluting; other energy is hoped to be less polluting.

There is a different issue that we are not being told about. It is the fact that having enough energy is terribly important, as well. Total world energy consumption has risen quickly over time.

Figure 1. World Energy Consumption by Source, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects and together with BP Statistical Data for years 1965 and subsequent.

In fact, the amount of energy consumed, on average, by each person (also called “per capita”) has continued to rise, except for two flat periods.

Figure 2. World per Capita Energy Consumption with two circles relating to flat consumption. World Energy Consumption by Source, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent, divided by population estimates by Angus Maddison.

There is a good reason why energy consumed has risen over time on a per capita basis. Every human being needs energy products, as does every business. Energy is what allows food to be cooked and homes to be heated. Energy products allow businesses to manufacture and transport goods. Without energy products of all kinds, workers would be less productive in their jobs. Thus, it would be hard for the world economy to grow.

When energy consumption per capita is rising, it is easy for workers to become more productive because the economy is building more tools (broadly defined) for them to use, making their work easier. Manufacturing cell phones and computers requires energy. Even things like roads, pipelines, and electricity transmission lines are built using energy.

…click on the above link to read the rest of the article…

Energy Asset

March 26, 2018

Energy Asset

Most of America’s 135 million homes were built as permanent structures, with 44% constructed before 1970. Considering growth and construction trends, these homes are likely to remain occupied for 50 years or longer. Although ownership changes, residential buildings can be viewed as long-term energy customers with consumption dominated by energy for heating and cooling.

Most U.S. homes are framed with wood: the thermal barrier between inside and outside (thermal shell) is “weatherized” by insulation between exterior studs and around ceiling joist. Personal comfort is accepted as a basic necessity, an unavoidable cost of living. Once the thermostat is set, few people give much thought to their mechanical system or the leakage of conditioned air that profoundly affects their energy bill.

Infra-red photo

The 1980 USDOE report, “Low Energy Futures for the United States” (DOE/PE-0020), didn’t mention weatherization when describing a future in which efficiency offsets demand growth. Rather, the report states: “improved design and construction incorporating passive solar, super-insulation, and double envelope construction can greatly reduce energy requirements” (page 25). Unfortunately, thermal design evolves slowly, and EIA expects continued demand growth:

U,S. primary energy consumption by fuel between 1980-2035

According to trends described in the Guardian (12/11/17), EIA projections may be too low in our digital future. “U.S. researchers expect power consumption to triple in the next five years as one billion more people come online in developing countries, and the “internet of things” (IoT), driverless cars, robots, video surveillance and artificial intelligence grows exponentially in rich countries.”

Alternative currencies have recently emerged as another unplanned burden for the future grid. The Washington Post(2/13/18) reported that each “transaction involves an immense number of mathematical calculations, which in turn occupy vast computer server capacity. And that requires a lot of electricity.” The result is that “cryptocurrency mining in Iceland is using so much energy, the electricity may run out for the first time, they now exceed Icelanders’ own private energy consumption.”

The Energy Times (1/22/18) also pointed to the staggering energy requirement of alternative currencies: “The total network of computers plugged into the Bitcoin network consumes as much energy each day as some medium-size countries, and the network supporting Ethereum, the second-most valuable virtual currency, gobbles up another country’s worth of electricity each day.”

…click on the above link to read the rest of the article…

Are We Decoupling? (Not really, but happy 2018 anyway!)

January 2, 2018

Are We Decoupling? (Not really, but happy 2018 anyway!)

“Decoupling”: are we really so smart that we can do more with less? Apparently not: we can paint things in green, but it is not the same thing. But so is life and happy 2018 to everybody!

Decoupling looks like an obvious idea, isn’t it? After all, isn’t that true that we are becoming more efficient? Think of a modern LED light compared with an old lamp powered by a whale oil. We are now hundreds of times more efficient than we were and we also saved the whales (but, wait, did we…..?). So, if we can do the same things with much less energy, then we could grow the economy without using more energy, solving the climate problem and also the depletion problem. It is part of the concept of “dematerialization” of the economy. Then we paint everything in green and all will be well in the best of worlds.

But there has to be something wrong with this idea, because it is just not happening, at least at the global scale. Just take a look at this image:

Note how closely related the GDP an the world’s energy consumption are. It is impressive because the GDP is measured in terms of money flows. So it seems that money, although not a measure of power in itself, is a proxy for power. The idea that “money is power” doesn’t seem to be just a metaphor.

Now, by carefully looking at the curve, we could say that we have been doing a little better in recent years. That is, we seem to have been able to produce a little more GDP for the same amount of energy.

…click on the above link to read the rest of the article…

The Approaching US Energy-Economic Crisis

October 19, 2017

The Approaching US Energy-Economic Crisis

I was recently asked to give a talk called, “The Approaching US Energy-Economic Crisis.” In other words, how might the United States encounter problems that lead to a crisis? As we will see, many of the problems that could lead to a crisis (such as increased wage disparity and difficulty in collecting enough taxes) are issues that we are already beginning to encounter.

In this talk, I first discuss the connection between energy and the economy. Without this connection, it doesn’t make sense to talk about a crisis arising with respect to energy and the economy. I then discuss seven issues that could lead to a US energy-economic crisis.

Economic Growth Is Closely Tied to Energy Consumption

If we look at world data, it is clear that there is a close tie between energy consumption and economic growth.

Slide 2

On an individual country basis, there can be the belief that we have reached a new situation where a particular country doesn’t really need growing energy supply for economic growth.

Slide 3

For example, on Slide 3, the recent nearly vertical line for the US suggests that the US economy can grow with almost no increase in annual energy consumption. This rather strange situation arises because the standard calculation misses energy embodied in imported goods. Thus, if the United States wants to outsource a great deal of its manufacturing to China, the energy consumption used in making these goods will appear in China’s data, not in the United States’ data. This makes the country that has outsourced manufacturing look very good, both with respect to energy consumption and CO2 emissions.

…click on the above link to read the rest of the article…

Contemplations for a Sunday (unless you can’t get around to it til Monday)

February 28, 2017

Contemplations for a Sunday (unless you can’t get around to it til Monday)

Some simple themes today…

Population growth, economic growth, and resultant energy consumption are inexorably slowing. The Federal Reserve knows it can not stop this and is simply slowing the inevitable with interest rate cuts to incent greater consumption via skyrocketing credit/debt (particularly government debt….debt that is undertaken with no intent of ever repaying it and is really just pure monetization).

The chart below highlights that employment among 25-54yr/olds (the foundation of US consumption) ceased growing in ’00. Once employment among this group ceased growing, total US energy consumption also ceased growing, and accelerating debt was substituted to maintain growth thanks to nearly 40yrs of interest rate cuts.

The impact of the declining rates and rising debt can be seen in the Wilshire 5000 (chart below). The Wilshire represents all publicly traded US equities radically moving upward with surging US federal debt but inverse to US total energy consumption, jobs creation, and economic activity since ’00.

The driver of the Fed’s federal funds rate was and continues to be the rate of population growth and the growing demand this population growth represents. The adult population growth rate peaked in ’79 and the federal funds rate peaked in ’80…rates plus population growth have been decelerating/declining together since.

The chart below showing the 0-64yr/old population growth vs. 65+yr/old growth. The demographic and population situation only continues to get worse. In fact, it’s unlikely the 0-64yr/old population growth will hit the already low estimates from 2017–>2030 due to the ongoing decline in birth rates and slowing immigration.

What about employment? Chart below shows total full time jobs growth has slowed to a trickle (net basis from peak to peak) and total energy consumption growth likewise decelerating, peaking in ’05, and now declining. Federal funds rate moving inversely, all the way to zero. Finally, Public US Federal debt (w/out Intra-governmental holdings) skyrocketing.

…click on the above link to read the rest of the article…

Energy Consumption vs. Core Populations – Trending Down Together

February 18, 2017

Energy Consumption vs. Core Populations – Trending Down Together

In this article, I want to spend a little time reviewing two of the most relatively reliable data sets, population size/growth and energy consumption/growth. I’ll compare the total energy consumption of nations / groupings of nations vs. their core (25-54yr/old) employed populations and total core (25-54yr/old) populations.

What’s the point? We are in the midst of a structural, secular change and policy makers / central bankers insistence that it is just a transitory issue in need of more rate cuts and more credit to ”restart the economy” is absolutely ridiculous. This is the story of cause (declining population, where it counts) and effect, declining energy consumption and economic activity. And this is about to really pick up speed to the downside (more on that, China, below). Plus, we can ponder if real economic “growth” coincident with declining consumption of energy is possible…or is that growth just debt and financialization? Also keep in mind while viewing the charts and data below, if not for the twenty six years of Federal Reserve (& CB’s worldwide) interest rate cuts incenting all the debt creation, energy consumption would have begun declining long ago.

US-
Below, total US energy consumption (quadrillion BTU’s) vs. core employees. Correlation? Causation? Anyway, just is what it is. The US consumes 18% of global energy but US total energy consumption has been falling since 2007 and is now back to where it was 17 years ago, in 1999….likewise, the total number of 25-54yr/old employees peaked in ’07 and is now back to 1999 levels.

Below, same as above but added core population through 2025 (UN assumes, perhaps wrongly, continued levels of immigration to achieve that slight population growth from now through 2025).

JAPAN –

Below, core employees vs. total energy consumption. Japan consumes 3.5% of global energy. Japan’s total energy consumption peaked in ’06 and is now back to total levels last seen in 1992…and the total number of Japan’s core population now employed is on par with total employed in 1982.

…click on the above link to read the rest of the article…

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