Natural gas will contribute most to future energy demand growth, of which the share in the global energy mix will increase by 3.6 percent by 2040, according to OPEC's World Oil Outlook 2040 published on Tuesday.
OPEC released its World Oil Outlook for 2040, which underlined that since the publication of the World Oil Outlook 2016 in November last year, the market has experienced 'significant changes' that have had an impact on medium- and long-term estimates.
The report foresaw that by 2040 the largest contribution to future energy demand is projected to come from natural gas on a global level.
'In absolute terms, demand for gas will increase by almost 34 million barrels of oil equivalent per day (mboe/d), reaching a level of 93 mboe/d by 2040,' the report said.
OPEC underlined that strong population growth in most developing countries, combined with robust economic development, will lead to demand growth for gas in all the relevant sectors including power generation, industry, as well as the residential and commercial sectors.
The increasing availability of gas on the global market due to the expansion of liquefied natural gas (LNG) production is also set to contribute to the high growth rates for this energy source, the report noted.
- Global energy demand to rise 35% by 2040
The report also showed that global energy demand is set to increase by 35 percent over the period 2015–2040, driven by expansion in developing countries. The total primary energy demand is forecast to increase by 96 mboe/d between 2015 and 2040, rising from 276 mboe/d to 372 mboe/d.
'In relative terms, this represents a 35 percent increase compared to the base year of 2015, with an average annual growth rate of 1.2 percent during the forecast period,' the report underlined.
The report stressed that this significant global energy demand growth would, however, be unequally distributed among major regions and country groupings. Energy demand in developing countries is expected to grow at an average rate of 1.9 percent per annum over the period 2015–2040. This is in sharp contrast to an average growth rate of 0.1 percent per annum projected for the OECD and 0.9 percent per annum for Eurasia.
- India, China to lead energy demand
Within the grouping of developing countries, India and China are the two nations with the largest additional energy demand over the forecast period, both in the range of 22–23 mboe/d, the report said.
Recent projections show that for the first time India will be the single largest contributor to future energy demand followed by China and other countries.
OPEC explained that the change in the leading position is primarily the result of the downward revisions made for China rather than a more positive outlook for India.
- Renewables to record fastest growth rate
The OPEC report also projected that renewables will record the fastest growth rate, but oil and gas are still expected to supply more than half of global energy needs by 2040, consisting mainly of wind, solar and geothermal energy.
Renewable energy is estimated to have an average annual growth rate of 6.8 percent over the forecast period, OPEC noted, adding that its share is anticipated to increase by 4 percentage points by 2040.
However, given that its current base in the global energy demand mix is rather low, at about 1.4 percent, the share of renewables is still forecast to be below 5.5 percent by 2040, despite its impressive growth, the report said.
The organization's report asserted oil and coal would grow at much lower rates of 0.6 percent and 0.4 percent per annum, respectively. Despite these relatively low rates, fossil fuels are to retain a dominant role in the global energy mix, although with a declining overall share.
'Indeed, the share of fossil fuels in the global energy mix stood at 81 percent in 2015. This is set to decline to below 80 percent by 2020 and then drop further to under 78 percent by 2030. It is estimated to reach 74 percent by 2040. It should be noted, however, that oil and gas together are still expected to provide more than half of the world’s energy needs over the forecast period, with their combined share relatively stable between 52–53 percent,' the report argued.
By Ebru Sengul
Anadolu Agency
energy@aa.com.tr