The geography of energy consumption continues its historic shift to Asia
The World Energy Outlook 2018 report states that “major transformations are underway for the global energy sector, from growing electrification to the expansion of renewables, upheavals in oil production and globalization of natural gas markets.”
Released by Paris-based International Energy Agency, it states that natural gas is expected to overtake coal as the world’s second largest energy source after oil by 2030. This is due to global efforts in reducing air pollution and the rise of liquified natural gas (LNG). “Natural gas is the fastest growing fossil fuel in the New Policies Scenario, overtaking coal by 2030 to become the second-largest source of energy after oil,” the report said. (“New Policies Scenario” that takes into account legislation and policies to reduce emissions and fight climate change.) In contrast, oil markets are reaching a point of “renewed uncertainty and volatility, including a possible supply gap in the early 2020s”.
China, which is the world’s biggest oil and coal importer, would soon become the largest importer of gas. It’s net imports would attain the levels of the European Union by 2040. It has already overtaken Japan, and is behind United States and Russia.
Emerging economies would account for half of total global gas demand, and their share of LNG imports would double to 60% by 2040. The report states that “LNG trade has expanded substantially in volume since 2010 and has reached previously isolated markets”.
USA would account for 40% of the growth in total gas production.
It also states that the energy demand would grow by more than a quarter between 2017 and 2040 assuming more efficient use of energy. If not, then it would rise by twice that much. Global gas demand would increase by 1.6 percent a year to 2040 and would be 45 percent higher by then than today.
Global electricity demand will grow 2.1 percent a year, mostly driven by rising use in developing economies. Electricity will account for a quarter of energy used by end users such as consumers and industry by 2040.
Regarding mitigation efforts to curb pollution, Fatih Birol, the IEA’s executive director, said “We can create some room for manoeuvre by expanding the use of Carbon Capture Utilization and Storage, hydrogen, improving energy efficiency, and in some cases, retiring capital stock early. To be successful, this will need an unprecedented global political and economic effort”. Carbon dioxide emissions are expected to rise by 10 percent to 36 gigatonnes in 2040, mostly driven by growth in oil and gas.
Renewables would grow 40% from the present 25%. Though solar energy is growing, there is still the need for significant push in other renewables.
