How much energy do we need?


Energy usage vs UN Human Development Index, 1997

How much energy do we need? In traditional economics, this question is meaningless, as humanity simply consumes the amount of energy demanded at the market-clearing price. But in a resource-constrained world, this question becomes pertinent. Can the world’s energy supplies power a future in which all of mankind uses the same amount of energy as the average American? What level of energy usage is possible, and as fossil fuel sources run short, what kind of renewable energy investment will be required? Let’s examine some scenarios:

Scenario 1: The World at American Standards

The United States consumes 100 quadrillion btu of energy annually. If the world’s population stabilizes around 9 billion, bringing the entire world up to US energy consumption would require 6000 quadrillion btu per year. This is more than twelve times current energy production, a figure that even optimistic forecasters doubt possible. If solar panels cost 50 cents per watt installed (90% cheaper than today and cheaper than coal), an investment of $500 Trillion would be required to provide this amount of energy.

Scenario 2: The World at European Standards

The graph above shows that the US could cut per capita energy consumption by 70% without a significant drop in quality of life. Achieving this standard worldwide would require total energy production of 1800 quadrillion btu per year, still more than triple today’s capabilities. An investment of $150 Trillion would provide enough solar energy to power the world at these standards, a number over double current world GDP.

Scenario 3: Current Energy Usage per Capita

The scenarios above assume that the developing world eventually reaches parity with the industrialized world. Assume instead that current energy usage is maintained on a per capita basis, with the world’s population stabilizing at 9 billion. The world would consume 700 quads of energy per year. This level of energy usage would require $60 Trillion in investment, which might be achievable over time.


Unless energy prices drop by 99 percent via nuclear fusion, the world’s economy is likely to be energy-constrained in the future. It’s highly unlikely that the entire world will ever reach an American or even European level of energy consumption, and even current energy consumption levels will require a massive investment to reach sustainability. The calculations above assume that renewable energy will become significantly cheaper than coal, and yet the cost of replacing the world’s energy infrastructure is enormous. But in the long run, it will be necessary!


At 50 cents per Watt installed, what’s the price per kilowatt-hour that I’m assuming? Assume that a 1kW solar system produces 1800 kWh per year, as according to SolarBuzz. Over a 30 year lifetime the system would produce 54000 kWh. If this system costs $500 at 50 cents per watt, then $500 / 54000 kWh = 1 cent per kWh. This is much cheaper than retail delivered electricity generated from coal.

Scenario 1:

1800 kWh * 3413 btu / kWh = 6143400 btu per $500 system

6000 quadrillion btu / 6143400 btu/system = 976 billion 1kW systems needed

At $500 each, that’s $490 Trillion.

Scenario 2: 1800 is 30% of 6000, so 1800 quadrillion btu would require $147 Trillion in investment.

Scenario 3: 700 is 11.6% of 6000, so 700 quadrillion btu would require $57 Trillion in investment.

7 thoughts on “How much energy do we need?

  1. I think your assumption regarding the decline in solar prices is optimistic. While the price for solar has been declining for some time, it is unlikely to decline further since the cost of manufacturing and materials is now exceeded by the cost of installation.

    Moore’s law may reduce the cost of manufacturing, but the land area and labor costs are likely to increase, not decrease, canceling any future savings.

    Unfortunately the widesprad use of nuclear power seems to be our only option. 200 new modern nuclear plants could power the U.S.

    1. Humphrey, this post ended up looking like a post on solar energy, but I originally meant it as an analysis of *any* alternative to traditional fossil fuel. How much capital will be required to build out any alternative?

      If the alternative costs 50c per watt installed, then we still face trillions in new investment needed, whether that alternative is nuclear, solar, wind, or other. Of the alternatives, only solar, breeder-based nuclear, and perhaps high-altitude wind seem to have any chance of the scale required.

  2. It ‘s irresponsible to convey the idea that PV is available at $500/kW. Today it’s more like $5000/kW. Multiply all your results by 10 to get a more realistic view of what it would cost to convert all to PV.

    The 1800 kWh/yr is optimistic also.

    1. Bill, I explicitly state in the post that 50c per Watt ($500/kW) is 90% cheaper than today! So we’re on the same page. I’m making the assumption that solar energy costs will continue to decline, and will cost 90% less (in real terms) in a couple decades than they do now. You may question that assumption if you like, but that’s a starting assumption for this post. And given the relationship the PV industry has with the semiconductor industry (which has benefitted from Moore’s Law), I don’t think it’s an absurd assumption.

  3. Pete,

    Thanks for the insightful comments. If you take a look, you’ll see that the graph above is for electricity usage, so it doesn’t include a significant amount of transportation energy usage. Also, keep in mind that simply dividing US population by US land area doesn’t accurately show the population density in which most Americans live (because so much of America is empty, people-wise). The northeastern US has the same population density as Europe, for instance:

    That having been said, the real insight from my analysis above is that an incredible investment will be required to maintain even current levels of energy usage!

    Even if the world population stabilizes immediately, replacing fossil fuel energy with sustainable sources will require trillions in investment. We don’t know when fossil fuels will run low, but even optimistic forecasters think it will begin to happen in this century.

    Global population growth has been trending downward steadily, so I don’t think that’s the driving issue. To me, the driving issue is – are we going to be far-sighted enough to start transforming our energy production and usage today?

  4. I think you’re missing something here – the role of population density. Notice that the United States is accompanied by Australia and Canada at the far right end of the data – all much less densely populated nations. Notice too that the countries at the left end of the spectrum are very densely populated (or very poor, in some cases). The per capita energy consumption in countries like the U.S., Canada and Australia is higher because they have the room to spread out, increasing travel needs, and the room to occupy much larger dwellings, critical elements of a high quality of life.

    In nations like Japan, ten times as densely populated as the U.S., their per capita energy consumption is much lower because their consumption of everything is lower. Over-crowding has driven down their per capita consumption. But low per capita consumption inevitably yields rising unemployment and poverty. (This is why such nations are utterly dependent on exports to sustain their vast labor pools.)

    To suggest that the U.S. could cut its per capita consumption of energy to Japan-like levels is to suggest that they cut their consumption of everything, reducing their standard of living and quality of life, and sending unemployment soaring.

    The real problem here is total consumption, not per capita consumption. The only way to maintain a high standard of living and to raise the standard of living everywhere in the world, while cutting total consumption to a sustainable level, is to dramatically reduce the human population. By your own admission, the population must stabilize at some point. Why not stabilize it at a level that allows everyone to enjoy a high standard of living and quality of life?

    Pete Murphy
    Author, “Five Short Blasts”

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