How will the world respond to surging energy demand?
Following The Economist’s Global Energy Conversation in June 2011, the general consensus among the experts was that the pattern of global energy demand is shifting, economies are rebalancing, populations are growing and that the global energy system is in the early stages of an historic transformation. So, what does this mean for the energy industry?
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Our point of view
The global energy system is in the early stages of an historic transformation, propelled by a rising global population - 9 billion by 2050, up from 7 billion today...
Every second, five babies are born, many of them in Asia. Adding 2 billion people to the planet is like adding one more China and India.
At the same time, millions in developing countries are shaking off energy poverty and climbing the energy ladder. China and India are entering their most energy-intensive phase of development and could double their energy demand over next 40 years, according to the World Energy Council.
All this means that energy demand is likely to double by 2050, even assuming significant increases in energy efficiency. If we continue to use energy as we do today, a gap could emerge between demand and supply about the size of the whole energy industry in 2000.
This gap will have to be bridged, either by a dramatic reduction in demand, a jump in supply, or most likely some mix of both. But exactly how remains unclear. Shell’s Scenario planners call this the “zone of uncertainty”.
This could be a zone of extraordinary misery or extraordinary opportunity, depending on how the world responds. It signals an era of volatile transitions, for example, volatility in energy prices as demand continues to rise.
Renewable energy sources will undergo rapid expansion, so that by mid-century they could supply around 30% of the world’s energy – up from today’s 13%. This would represent a massive achievement, given the financial and technical obstacles to deploying new energy sources on a mass scale. But it will also mean that fossil fuels and nuclear will still account for around two-thirds of the world’s energy in 2050.
To meet the world’s surging energy demands and address the environmental impact at the same time will require a major effort by countries, communities and companies.