The base case outlines the most likely path for global energy markets to 2035, including an expected 30% growth in consumption with a mix of fuels that becomes progressively lower in carbon
Global demand for energy is set to continue to grow over the next two decades as prosperity increases and the world’s population rises. However, the mix of fuels used will change, driven by technological advances and environmental concerns, and demand will grow more slowly than in the past as energy is used more efficiently. Carbon emissions will continue to rise, but also slower than in the past.
The world economy is expected to almost double over the next 20 years, driven by emerging economies, with growth averaging 3.4% per year and, more than 2 billion people lifted from low incomes. Meanwhile, the world’s population is projected to increase by around 1.5 billion people to reach nearly 8.8 billion.
Energy growth slows
The growing world economy will require more energy, but consumption is expected to grow less quickly than in the past - at 1.3% per year over the Outlook period (2015-2035) compared with 2.2% per year in 1995-2015.
Energy demand grows more slowly than in the past because energy intensity (the energy used for each unit of gross domestic product - GDP) is expected to fall more rapidly. Global GDP doubles over the period whereas energy demand increases by only 30%.
Virtually all the growth in world demand comes from fast-growing emerging economies, with China and India accounting for over half of the increase. Energy demand within the long-established economies of the OECD (Organization for Economic Co-operation and Development), such as in North America and Europe, barely grows at all.
The gradual decarbonization of the fuel mix is set to continue, with renewables, together with nuclear and hydroelectric power expected to account for half of the growth in energy supplies. Even so, oil, gas and coal remain the dominant sources of energy, accounting for more than 75% of energy supplies in 2035 (down from 85% in 2015).
Nearly two-thirds of the increase in global energy consumption is used for power generation and the share of energy used for power generation rises from 42% to 47%.
Carbon emissions keep rising - but more slowly
Carbon emissions are projected to grow at less than a third of the rate seen in the past 20 years - at 0.6% per year compared to 2.1% per year. This would be the slowest rate of emissions growth since our records began in 1965.
However, it would still mean that emissions grow 13% by 2035, whereas they would need to fall to have a good chance of achieving the goals set out in the 2015 Paris Agreement on climate change, which include keeping the global temperature rise to 2°C on pre-industrial times. This indicates the need for further policy action.
The slowdown in carbon emissions growth reflects the accelerating decline in energy intensity and the pace of change in the fuel mix, with coal consumption slowing sharply - particularly in China - and gas and renewables, nuclear and hydroelectric power together supplying almost 80% of the increase in energy.
Oil demand grows - but slows
Oil use continues to grow at 0.7% per year, although its pace of growth is expected to slow.
The transport sector consumes most of the world’s liquid fuel, with its share of global demand remaining just under 60%. But the stimulus from transport demand gradually fades, as fuel efficiency improves and there is increasing penetration of non-oil fuels, including electric vehicles.
Increases in the supply of liquids are driven by holders of large-scale, low-cost resources, especially in the Middle East, US and Russia. OPEC is expected to account for nearly 70% of global supply growth, increasing by 9 million barrels per day (Mb/d), while non-OPEC supply grows by just over 4 Mb/d by 2035 - led by the US.
Gas grows faster than oil or coal
Natural gas is expected to grow faster than oil or coal, with consumption increasing by 1.6% per year between 2015 and 2035.
Shale production grows at 5.4% per year and accounts for around two-thirds of the increase in gas supplies, driven by the US where shale output more than doubles. Towards the end of the period, China emerges as the second largest shale supplier.
While both China and Europe become more dependent on imported gas over the period, an increased diversity of supplies associated with a rapid expansion of liquefied natural gas (LNG) helps to support gas consumption.
Growth in GDP and primary energy (% per annum)
World economic growth requires more energy - but although global GDP will double, energy demand will increase by only 30%
Energy consumption by region (billion toe)
Energy consumption is expected to grow less quickly than in the past: 1.3% p.a. over the Outlook period versus 2.2% p.a. in 1995-2015
Coal demand slows dramatically
Growth in global coal demand is expected to slow sharply, running at 0.2% per year compared to 2.7% per year over the past 20 years.
Much of this slowdown is driven by China as its economy adjusts to a more sustainable pattern of growth. Even so, China remains the world’s largest market for coal, accounting for nearly half of global coal consumption in 2035.
India is the largest growth market, with its share of world coal demand doubling from around 10% in 2015 to 20% in 2035.
Nuclear and hydro generation grow steadily
Nuclear and hydro power generation are expected to grow steadily over the Outlook, by 2.3% per year and 1.8% per year respectively, broadly maintaining their combined share within the power sector.
China accounts for nearly three-quarters of the increase in nuclear generation, roughly equivalent to introducing a new reactor every three months for the next 20 years.
Renewables continue to grow rapidly
Renewables in power are set to be the fastest growing source of energy - at 7.6% per year to 2035, more than quadrupling over the Outlook period. Renewables account for 40% of the growth in power generation, causing their share of global power to increase from 7% in 2015 to nearly 20% by 2035.
The European Union (EU) continues to lead the way in terms of the penetration of renewables, with the share of renewables in its power sector doubling over the Outlook period to reach almost 40% by 2035. However, China is the largest overall source of growth over the next 20 years, adding more renewable power than the EU and US combined.
The strong growth in renewable energy is underpinned by the view that both solar and wind power will become significantly more competitive over the Outlook period.
Exploring key uncertainties
Although the base case in the Outlook presents the single ‘most likely’ path for energy over the next 20 years, there are many risks and uncertainties that could affect the trends.
The Outlook explores three alternative cases based on particular uncertainties: a faster revolution in mobility, including more electric cars; risks to gas demand; and alternative pathways to a lower carbon world.