Global energy demand is expected to plateau by 2035 despite growth in GDP and population, according to a report by data and analytics company McKinsey Energy Insights (MEI).
The report, Global Energy Perspective 2019, states that most countries within the Organisation for Economic Co-operation and Development (OECD) will see a decline in energy demand due to investment in renewable energy. However demand in Africa and India is expected to double by the year 2050.
Electricity demand will double by the year 2050, with renewables making up 50% of the total power generation by 2035. By 2050 73% of energy production will be from renewable sources, and by 2025 new-build renewables will out-compete existing fossil fuel generation on cost throughout the world.
Fossil fuels will continue to decline. Oil is expected to peak in demand in the early 2030s at 108 million barrels per day. Coal production peaked in 2014 and will fall by 40% by 2050, mostly due to a decline in demand from China. Natural gas is the only fossil fuel that will rise in use in the next 20 years but will then fall in production after 2038.
The MEI says that one impact on the use of fossil fuels will be due to the increased use of electric vehicles. Electric vehicle sales are estimated to top 100 million worldwide by 2035 and there could be 2 billion electric vehicles on the road by 2050.
MEI says this will help drive global emissions down 22% by 2050, which is still below the warming pathways laid out by the Intergovernmental Panel on Climate Change (IPCC).
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MEI senior partner Christer Tryggestad said: “For the very first time, we are on the cusp of seeing global economic growth decouple from rising energy demand: a truly historic moment. Our scenario is bolder than comparable studies, with energy demand declining faster and sooner, but this reflects what we see in the sector.”