Energy demand will plateau after 2030, according to a new DNV GL (stand 5B51) model which forecasts the pace and extent of the global energy transition until 2050.
While fossil fuel will still provide more than 40% Peak of the world energy demand, the consequences of the decarbonization of the energy mix and of the flattening out of energy demand are substantial, it says.
DNV GL’s new Energy Transition Outlook forecasts peak global demand for oil in 2022, and peak gas in 2035, the same year in which total global energy demand is predicted to reach its highest point before flattening, thanks to step-changes in energy efficiency.
Although the oil and gas industry is predicted to continue to be an important contributor to the energy transition, there needs to be development towards enhanced efficiency with reduced costs, wastage, and use of resources in all elements, says DNV GL. “Increased recovery rates and remote or autonomous operations are key for the oil and gas sector. To achieve this, there is a need for continued innovation, simplification and standardization of technical systems, operational models and contracting strategies,” Tørstad added.
Fossil fuels will account for 44% of world energy supply in 2050, compared with 53% today, according to the report, with demand coming from power production; heavy road transportation, aviation and shipping; and direct use in buildings and manufacturing.
Gas is expected to become the largest carrier of energy towards 2050. As the cleanest of the fossil fuels, gas could substitute oil in transportation and coal in power production, and to work together with renewable energy to create effective energy systems, says DNV GL. “Shorter term, we expect gas power generation to grow significantly, with the 25% increase in production the next 10 years to replace coal,” says the group. “Longer term, we see gas growing significantly in volume as transportation fuel, and we expect 30% of shipping fuel in 2050 to be LNG. Gas will also play an increasingly important role in heavy road transport: 7% in 2050.”
Dialogue and collaboration between industry, policy makers and regulators, as well as across the energy industry and between countries and regions will be needed as part of the transition, says the group.