IEA: Renewable energy to approach top spot in world electricity

The International Energy Agency came out with some startling predictions this week, including this: Renewable energy sources will approach coal as the primary source of world electricity by 2035.

The projection was among several that painted a picture of dramatic transformations in the world’s energy demand and resources over the next 23 years (The agency also said the United States will surpass Saudi Arabia to lead the world in oil production).

Fueled by rapid growth of solar power generation, renewables will become the second largest source of energy in just three years, the agency’s World Energy Outlook 2012 said.

Biomass and biofuels will grow four-fold by 2035, the agency said.

But the growth is dependent largely on policies that the agency sees as holding strong to influence continued growth and investment in renewables.

Carbon taxes and heavy subsidies are expected to push the growth and help spur renewable spending that improves products and makes technology cheaper.

While global subsidies for renewable energy were $88 billion in 2011, they will grow to $240 billion by 2035, the agency said.

“Subsidy measures to support new renewable energy projects need to be adjusted over time as capacity increases and as the costs of renewable technologies fall, to avoid excessive burdens on governments and consumers,” the agency said.

Energy strategies in countries like Germany and Japan, which are shifting away from nuclear energy and increasingly pursuing renewable resources, will likely play a major role in such a transformation.