Global primary energy demand will see an average growth rate of 0.9% per year, increasing from 289 million barrels of oil equivalent per day (mboe/d) in 2019 to 361 mboe/d in 2045, according to the Organization of the Petroleum Exporting Countries' (OPEC) World Oil Outlook 2045 published on Thursday.
The outbreak of the COVID-19 pandemic resulted in the sharpest downturn in energy and oil demand, OPEC said, describing the pandemic period as “the most severe economic downturn since the Great Depression in the 1930s.”
Despite the huge drop in 2020, OPEC said global primary energy demand would continue growing in the medium- and long-term, increasing by 72 mboe/d in the period to 2045.
OPEC forecast that energy demand in non-OECD countries would increase by 76.5 mboe/d, while demand in the OECD would drop by around 4.4 mboe/d in the same period.
OPEC said nearly half of total energy demand growth is expected to come from India and China.
“India, China and other developing countries with increasing populations and high economic growth play a key role in increasing energy demand while developed nations in the OECD are exerting more of their efforts on energy efficiency and low-carbon technologies,” it added.
-Oil demand to partially recover by 2021
The transition to renewable energy sources and a reduction in greenhouse gas (GHG) emissions will continue to be supported by policy instruments in line with the objectives of the Paris Agreement, the report said.
While oil demand is expected to gradually recover as the world emerges from the pandemic, the outlook for oil production is also dependent upon expectations of price stability, recovered oil demand levels and resulting investment decisions.
OPEC forecast that oil demand would rebound partially by 2021 provided the COVID-19 pandemic is fully overcome by next year.
According to the report, oil will remain the fuel with the largest share of the global energy mix until 2045 with more than a 27% share followed by gas with 25% and coal with 20%.
OPEC expects that oil demand will reach 94.4 mboe/d in 2025 and 99.5 mboe/d in 2045 based on healthy growth rates.
-Coal to phase out by 2045
Natural gas will be the fastest-growing fossil fuel between 2019 and 2045 as a result of rising levels of urbanization, growth in industrial demand and greater competitiveness over coal in the power generation mix, OPEC said, while coal is expected to be the only primary fuel for which demand declines between 2019 and 2045.
Global demand for gas is forecast to rise from almost 67 mboe/d in 2019 to 91 mboe/d in 2045, rendering natural gas the second-largest contributor to the primary energy mix.
Considering that many coal-fired power plants are being replaced by renewables and gas throughout the world, OPEC estimated that demand for coal would decrease by 2045 at an average rate of 0.3% per year.
“There are two main reasons for this change. The first is a result of shutdowns and replacement of coal-fired power plants in the OECD region. The second is the introduction of more energy-efficient technologies in developing regions as carbon abatement is prioritized,” it said.
-Renewables to become fastest-growing energy source
OPEC estimated that renewables – primarily solar, wind and geothermal energy – would rise higher than any other energy source by an average of 6.6% per year between 2019 and 2045.
Within the forecast period, growth in electricity generation is set to continue at rates much higher compared to overall primary energy demand.
In line with economic development, population growth and the increasing use of energy in fields such as digitization, cooling and transport, as well as expanded access to electricity in emerging regions, electricity demand is projected to rise by an average of 2.2% per year.
By Sibel Morrow