In its latest World Energy Outlook annual report the IEA said the US was set to become self-sufficient in energy by 2035 largely through its shale gas reserves and was currently reaping the benefits of shale gas in global markets.
“Lower energy prices in the United States mean that it is well-placed to reap an economic advantage, while higher costs for energy-intensive industries in Europe and Japan are set to be a heavy burden,” said IEA chief economist Fatih Birol.
Birol added: “There is a substantial gap between the US and Europe in gas and electricity prices. This is a serious problem for Europe because this differential in prices will remain for at least the next 20 years.”
He predicted that energy intensive industries in the UK and Europe would suffer a 10 per cent fall in their international market share.
IEA reported that natural gas in the United States currently trades at one-third of import prices to Europe and one-fifth of those to Japan. And average Japanese or European industrial consumers paying more than twice as much for power as their US counterparts.
In its outlook to 2035 it forecasts nearly half of global power production growth will be in renewables with the volume growth in China greater than in the European Union, US and Japan combined.
This will take green generation to 30 per cent of the global total ahead of gas and on a par with coal, the IEA reported.
At the same time gas use in China will quadruple and will remain squeezed in the EU by renewables and cheap coal, to barely rise to 2010 consumption levels. Only a “small but significant” share of US shale gas finding its way to other markets as LNG, the IEA predicted.
Despite a continued dominance of the power generation market by coal, only one per cent of fossil fuel-fired power plants will be equipped with carbon capture and storage by 2035 according to IEA.