DNV GL as released its Energy Transition Outlook which forecasts global energy demand and supply through to 2050, and Remi Eriksen, Group President and CEO, highlights that world primary energy supply is likely to peak before 2030.
“This will surely be a watershed moment in human history, where collectively we will need less energy to satisfy our energy demand. The consequences of the decarbonization of the energy mix and of the flattening out of energy demand are substantial,” he says.
World energy growth has historically gone hand-in-hand with population and economic growth. Energy decouple from carbon in the coming decades, and global energy supply will peak and slowly decline in the context of continued (but slowing) population and economic growth, states the report. This is linked to accelerating energy efficiency on a global scale, driven in the main by the growing share of electricity in the energy mix.
“We forecast that by mid-century, primary energy supply will be split roughly equally between fossil and renewable sources,” says Eriksen. “That presupposes a very substantial growth path for renewable energy, but not enough, we calculate, to bring humanity on track to reduce climate emissions in line with the climate goal agreed in Paris in 2015. That should be a wake-up call to all stakeholders in the energy system. The industry that we know and serve has taken bold steps in the past; even bigger strides are required into the future.”
Oil and coal currently provide 29 percent and 28 percent respectively of the world’s global energy supply. By 2019, coal will be overtaken by gas, and in 2034, gas will surpass oil to become the largest energy source. The fossil fuel share of the world’s primary energy mix will decline from 81 percent currently to 52 percent in 2050. Hydropower, nuclear and biomass will remain flat, while photovoltaics and wind will grow rapidly and represent 13 percent and 14 percent respectively of the world’s primary
energy supply in 2050.
DNV GL predicts that, globally, expenditures for fossil fuels will drop by more than half from around $3,400 billion per year today to $1,500 billion per year in 2050, while non-fossil energy expenditures show the reverse trend, increasing fivefold from around $500 billion per year today to $2,700 billion per year in 2050.
The energy transition can be undertaken without a significant increase in overall energy expenditures,
which will stay approximately constant over time, states the report. With Gross World Product (GWP) increasing by 130 percent over the next 33 years, total energy expenditure is forecast to fall to less than half of its current share of GWP – from five percent to a little over two percent of GWP.
The report is available here.