Newsletter #11 – Projection of Global Energy to 2100 and beyond

Monday 24th February 2025

We are witnessing an energy competition between China, the United States and Russia. China is pushing multiple energy pathways [1], the USA is focused on expanding oil and gas fields, nuclear technologies and securing nuclear fuel. Russia has realigned gas and oil deals and is the world’s largest producer of nuclear fuel [3]. The Paris Agreement is on a tenuous footing [4], and renewables are driving productivity down, for the world’s wealthiest countries. What does all this mean for global energy and the role that Australia needs to play from both an economic and environmental perspective? Are the virtuous among us on a renewable’s pathway, that will eventually become irrelevant?

In Newsletter #6 ‘A Global Reality Check” we examined current energy trends and the dominant energy markets in China and the USA. In this Newsletter we look at energy pathways that are economically rational from now through to 2100. Together with how this influences our current position, economic imperatives and renewable energy aspirations.

Graph 1 – fossil fuel hits a peak around 2050 and declines as emerging nuclear technologies become more cost effective than mining and transporting coal and gas. This rather than renewables targets will be the key driver in reducing global carbon emissions.

Starting with the greatest challenge, how do we reduce our reliance on fossil fuels? There is a correlation between economic growth and growth in coal power stations [5] and economic decline with moving from fossil fuels to renewables [6]. These trends suggest that ‘net-zero’ strategies aren’t working. Instead, we need to rethink energy based on practical realities.

The Energy Heavy Lifting

The global economics of energy must make sense, and for this to happen cheaper forms of energy are going to be needed to replace fossil fuels. Digging hydrocarbons out of the ground is pretty cost effective, however as fossil fuel reserves around the world are depleted, and processes such as fracking make extraction more costly, it opens a pathway for various forms of nuclear energy to become cost competitive. In Graph 1, it is projected that fossil fuel growth will continue up to 2050 and then start declining as a range of nuclear technologies develop to a point where they are more cost effective. A key driver for this is energy density, nuclear fuel is some 100,000 times the energy of fossil fuels [7]. As a result, mining, transportation, and mineral processing factor into the viability of fossil fuels and nuclear energy.

A further growth factor is geopolitical with China and Russia expanding spheres of influence into Pakistan and Bangladesh, respectively. They are making nuclear energy investments that expand alliances and dependencies of developing countries. This trend is set to continue across the developing world, and it’s possible that USA could expand beyond its domestic markets in a similar way. At the height of the Cold War on Dec 8^th 1953, the US President Dwight D. Eisenhower gave his famous “Atoms for Peace” speech to a full Assembly of the United Nations. At the core of his address was the pathway that is slowly coming to fruition [8].

“…fissionable material would be allocated to serve the peaceful pursuits of mankind. Experts would be mobilized to apply atomic energy to the needs of agriculture, medicine, and other peaceful activities.”

Graph 2 – wind, water and solar grow slowly, lakes and dams are limited by geography as are mountain ridges that are suitable for wind turbines, solar is limited by intermittent constraints and batteries.

Renewables vs Nuclear

Despite a huge investment in renewables over the past 25 years, they have made very limited inroads in supporting our global demand for energy. This is unlikely to change significantly in the medium to long term for three reasons: most importantly renewables lack energy density. One nuclear reactor such as a Kepco APR-1400 [9] produces the equivalent energy of around 700 Vestas VT-162, Australia’s largest wind turbine [10]. Secondly, a nuclear reactor produces power 24/7/365 on a far smaller footprint, without extensive transmission lines or the need for batteries and peaking gas plants. Thirdly, wind turbines and solar panels are exposed to the environment and only last some 15 to 30 years, whereas nuclear reactors are encapsulated in an environment where they are safely protected and run for 60 to 80 years.

Graph 3 – Nuclear will grow to dominate global energy by 2100, with current Light Water Reactors (LWRs) being augmented with Small Modular Reactors (SMRs), Fast Breeder Reactors (FBRs), and Fusion Reactors (FRs).

Any meaningful reduction in energy produced by fossil fuel (Graph 1) needs to be picked up through a significant increase in nuclear energy. Unsurprisingly, the USA, China and Russia are heavily invested in developing a range of nuclear technologies and in securing reserves of nuclear fuels, uranium and thorium. A potential growth projection is shown in Graph 3, in which nuclear increases around 150,000 TWh over the next 75 years. This would require an average of 25GW of new nuclear power every year. Growth is well below this level at present and requires a fundamental shift in price, through more economical SMRs, FBRs and FRs coming online and doing the heavy lifting in replacing fossil fuels from 2050 onwards.

Transportation Fuels

A further concern in predicting what our energy future will look like involves the production of fuels for transportation and non-electrified industrial processes, to replace coal, LPG and oil. Batteries are adopted in Electric Vehicles EVs, that are regularly recharged, but batteries are too heavy to replace jet fuel. The renewables sector has identified “green” hydrogen, hydrogen made using renewable energy, as a substitute for oil and gas.

There are several critical problems with “Green” hydrogen. Firstly, it is far more costly than LPG [11], and only worth considering in wealthy countries, where it is heavily subsidized. Secondly, it is very energy intensive to produce, compress, transport and use. This will influence its long-term viability, and it is likely to be obsolete when “Pink” hydrogen is produced that uses steam from nuclear reactor heat exchangers to produce hydrogen at a significantly lower cost [12]. The predicted growth of “Green” and “Pink” Hydrogen is shown on Graph 4. Demand for “Green” hydrogen may die out altogether by 2050.

Graph 4 – hydrogen will only grow as an alternative to LPG when cost and supply constraints kick-in.” Green” hydrogen is unlikely to make a significant contribution to zero-emissions fuel as cost and chemistry are working against it. Whereas ‘Pink” hydrogen is likely to emerge as a major source of transport fuel, using high temperature electrolysis.

The demand for hydrogen will depend on the reserves and prices of oil and gas. Peak oil is expected by 2028 according to the International Energy Agency [13], the US Energy Administration [14], and OPEC [15] believe it will peak around 2050. In Graph 5 it is assumed peak oil and gas production occurs in 2050, and this coincides with the demand for hydrogen increasing from 2050 onwards. These predictions will depend on further discoveries of new oil and gas reserves, and extraction technologies. As a result, dates may move, but this doesn’t change the overall pattern involving hydrogen eventually replacing oil and gas.

Graph 5 – there will be a new peak oil once Alaska, Greenland, and possibly Antarctica are depleted, and hydrogen Graph 4 is able to be produced in sufficient volumes.

A final note for transportation is the likelihood that nuclear shipping and even nuclear aircraft are likely to influence transportation. Note, the US developed a prototype nuclear jet during the Cold War that was completely impractical compared with jet fuel [16].

Final Comments

The world is in a tremendous state of flux at present, as the USA, Russia, Ukraine and the European Union need to address alliances and security, economic pressures and a very marked shift in international policy away from net-zero aspirations toward economic prosperity. It is yet to be seen if the Paris agreement will collapse in its entirety, or whether it has any real impact without the backing of super-powers.

From Australia’s perspective we could get things badly wrong if we overcommit to renewables projects, infrastructure and green hydrogen. They may end up being loss-losers if there’s an about-face on fossil fuel production and an energy war between USA and China. We would be better placed to watch and plan our next steps very carefully by looking for opportunities to help reduce CO2 emissions on a global level, rather than pursue inefficient energy policies.