Increasing demand

Increasing demand

The world's population is growing, and this growth underpins an expanding appetite for energy in all it's forms.

Rapidly developing nations, like India (and countries in Africa, South America and the Middle East) are lifting millions of people out of poverty. This sheer increase in the number of people demanding access to affordable and reliable energy will drive energy demand in the decades to come.

Growing population means more demand for energy

Growing population means more demand for energy

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According to projections by the International Energy Agency the world population is expected to grow from around 7.5 billion in 2016 to 9 billion in 2040.

The increase in the global population is concentrated in Africa, India, South East Asia and the Middle East. In fact, Africa is expected to double its population and India will overtake China as the world’s most populous country in the mid-2020's.

Population is demand

The sheer increase in the number of people demanding access to affordable energy will drive demand in the coming decades.

While population and energy consumption growth remains relatively static or falling in developed nations, increasing populations in developing countries are leading to projected increases in energy consumption.

 

population is demand

 

A growing world economy further increases energy demand

A growing world economy further increases energy demand

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The world’s Gross Domestic Product (GDP), a measure of the size of the world’s economy, is expected to double by 2035, with non-OECD Asia contributing nearly 60% of that growth – particularly India and China. Globally, GDP per person in 2035 is expected to be 75% higher than today, an increase in productivity which accounts for three-quarters of global GDP growth.

As economies grow, they consume more energy.

That is, as countries and their populations become wealthier, their lifestyles improve and they use more energy – whether it is to power their industries, purchase vehicles or make greater use of electronic goods.

Increasing urbanisation also means more energy demand

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The world’s population is increasingly concentrating in cities and towns, pushing the urbanisation rate up from 53% in 2013 to 63% in 2040, meaning the absolute number of people living in rural areas falls.

Urbanisation tends to increase demand for modern forms of energy, as such forms are of energy are more readily available and levels of income and economic activity tend to be higher in cities.

The world is going to need more energy in the future.

Primary energy consumption is forecast to increase by 37% between 2013 and 2035, with energy consumption expected to increase by 1.4% every year. Most of this growth will occur in non-OECD regions.

The energy mix by fuel type

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While the world’s energy mix will change significantly in the coming decades, to meet the world’s energy demand we will need to use more of everything.

Roughly one-third of the increase in energy demand will be met by gas, another third by oil and coal together, and the final third by non-fossil fuels.

In the OECD, declines in oil and coal are offset by increases in gas and renewables, in roughly equal part. Growth in non-OECD energy is evenly spread, with roughly a quarter in each for oil, gas, coal, and non-fossil fuels.

5.2 Our Consumption Fuel type split Nov16

As a share of the world’s energy mix, gas increases significantly, while oil and coal share of the global energy mix fall as a percentage.

By 2035 all the fossil fuels are clustered around 26-28%, with no single dominant fuel – a first since the Industrial Revolution.

While fossil fuels lose some of their share of the world’s energy mix, they will remain the dominant form of energy in 2035 with a share of 81%

Renewable energy sources are on track to have the fastest rate of growth across all energy sources.

Among non-fossil fuels, renewables (including biofuels) gain share rapidly, from around 3% today to 8% of 2035, overtaking nuclear in the early 2020s. 

Growth in vehicle demand

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The BP Energy Outlook 2035 forecasts the global vehicle fleet (commercial and passenger cars) more than doubles from around 1.2 billion today to 2.4 billion by 2035.

Vehicles in 2014

Vehicles in 2014

1.2b

total global vehicle fleet

Vehicles in 2035

Vehicles in 2035

2.4b

Total global vehicle fleet

Most of this growth will occur in the developing world as the economies of these countries grow and improved standards of living give rise to demand for vehicles.

While improvements to fuel efficiency, changes in consumer behaviour, and tightening regulations on emissions mean fuel demand will not increase at the same rate as vehicle numbers, it is still expected to increase by 30%.

While sales of electric cars are expected to represent an increasing proportion of new car sales in the coming decades, it will take some time for them to displace and replace the world's global fleet of petrol-powered cars, particularly in the developing world where most of the growth in the global vehicle fleet will occur.

 

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