Global power consumption ‘to almost double by 2050’

Global power consumption ‘to almost double by 2050’

Feb 02, 2021

Global power consumption will almost double by 2050 as a result of increased electrification and the uptake of green hydrogen.

Renewables will dominate energy market

Findings from new research by global consultancy McKinsey forecasts that electricity’s share of the energy consumption mix will grow from the 19% which it is at today to 30% by mid-century. According to the report, renewables will dominate the energy market within the next decade as they become cheaper than fossil fuel plants.

The report suggests by 2036, nearly half of all global power supply will come from renewable sources, mainly from solar and wind. With an estimated five terawatts of new solar and wind capacity predicted to be installed by 2035, this translates to fivefold growth from current levels.

Christer Tryggestad, Senior Partner at McKinsey, said: “While the pandemic has certainly provided a substantial shock for the energy sector across all fuel sources, the story of the century is still a rapid and continuous shift to lower-carbon energy systems.”

Cost competitive green hydrogen

The analysis also predicts green hydrogen will become cost-competitive by 2030 and as a result, ‘indirect’ power demand for electrolysis will account for approximately 40% of the electricity demand growth from 2035 to 2050.

Predictions for the future of fossil fuels

The Global Energy Perspective 2021 report also foresees oil demand will peak in 2029 and gas in 2037, while coal will continue its downward trend. According to the report, global coal demand peaked in 2014 and is expected to continue to decline by almost 40% from 2019 to 2050. Researchers also anticipate oil and gas demand will not return to its pre-Covid-19 growth path’.

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Balancing planet and profit during unprecedented market volatility

06 Jul, 2022

Balancing planet and profit during unprecedented market volatility

Why are energy prices high compared to a year ago?

By Vander Caceres • 14 Jun, 2022

Wholesale energy prices have experienced unprecedented levels of volatility since the end of summer 2021, with both day ahead/spot and future contracts surging to all-time highs. In the last couple of months, prices have decreased but still remain high compared to a year ago. This period of high energy prices is expected to continue for the foreseeable future (see next section). Energy prices have surged for a number of reasons: A global increase in gas demand following the ease or end of Covid-related restrictions throughout 2021. After the pandemic, economies across the world started to recover. Asian countries like China saw their imports of Liquified Natural Gas (LNG) increase. This resulted in lower LNG shipments to the UK and Europe. On the supply side, the Covid-19 lockdowns pushed some maintenance work from 2020 into 2021 at a time when demand was recovering. In 2021, gas production hit a record low of 363TWh, 47TWh below the previous record low in 2013. Low production was the result of an extensive summer maintenance schedule which saw shutdowns at several major terminals, as well as the Forties Pipeline System which serves a significant proportion of UK gas and oil production. A lack of wind in the summer resulted in higher demand for conventional power. European gas storage in 2021 and Q1’22 remained far below previous years and it’s unclear how these are going to be replenished in the summer given the concerns around supply including the potential suspension of Russian gas flows due to sanctions. The 1,234km offshore Nord Stream 2 gas pipeline, which was designed to double the flow of gas between Russia and Germany (and by extension the rest of Europe) has been abandoned following the invasion of Ukraine. Gas storage in the UK is extremely minimal with capacity at less than 2% of the UK’s annual demand, compared with 22% for other European countries. Whilst the UK is not heavily reliant on gas coming from Russia, it sources almost half it’s gas supply from Europe. Hence, wholesale gas and power prices in the UK are now subject to knock-on-effects from the conflict in Ukraine.

What does volatility mean for your journey to net zero?

20 May, 2022

Amidst rising energy costs, digitalisation, growing pressure from stakeholders and increasing regulation, organisations may struggle to define their pathway to a low-carbon future. What can you do to protect your business’ net zero plans from the challenges of volatility? Disruption and volatility are putting organisations under pressure. Digitalisation and new technology developments continue to challenge existing business models. Its increasing dependence on energy and encouraging businesses to drive change to secure competitive advantage. And as customers, employees and shareholders look to engage with companies who understand the importance of decarbonisation, pressure is mounting to prioritise sustainability.

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