In­dus­try

De­mand for elec­tric­ity is grow­ing four times faster than for any other fuel source

CEO Magazine North America - - CONTENTS - BY JOHN BÄRR

Elec­tric­ity: The grow­ing de­mand.

ELEC­TRI­FI­CA­TION ACROSS key end uses -par­tic­u­larly for build­ings and road trans­port- un­der­lies an ac­cel­er­a­tion of de­mand for elec­tric­ity rel­a­tive to de­mand for other sources of fuel.

In the con­struc­tion of build­ings, for ex­am­ple, higher liv­ing stan­dards in Asia and Africa are sup­port­ing a swiftly ris­ing de­mand for elec­tric­ity-based ser­vices.

An in­crease in the eco­nomic vi­a­bil­ity of elec­tric ve­hi­cles is also trig­ger­ing a rapid uptick, for cars as well as trucks.

“De­mand for coal will peak within the next decade, oil in the next two; de­mand for gas con­tin­ues to grow mod­estly.”

In one sce­nario, growth in elec­tric­ity de­mand could rise by up to 2.9% per year.

Mean­while, de­mand for coal will peak within the next decade, oil in the next two; by con­trast, de­mand for gas con­tin­ues to grow mod­estly.

Fos­sil fuel use is ex­pected to flat­ten by 2035, with oil and coal use in de­cline but use of gas con­tin­u­ing to ex­pand.

Strong growth in coal de­mand in In­dia and other de­vel­op­ing mar­kets is cur­rently par­tially off­set­ting a de­cline in de­mand within OECD coun­tries and China.

This still im­plies higher coal de­mand, be­tween now and 2030, than to­day based on growth in elec­tric power and other industries, ce­ment in par­tic­u­lar.

Ad­di­tional ac­cel­er­a­tion of de­clines in the cost of re­new­ables could re­duce coal de­mand by over 50% in China and In­dia.

Over the next decade, liq­uids de­mand growth will be pri­mar­ily fu­eled by the chem­i­cal and trans­port industries.

Yet this growth is fi­nite: peak oil de­mand is ex­pected to be reached be­fore 2040, driven by ef­fi­ciency im­prove­ments and elec­tri­fi­ca­tion in road trans­port.

What would need to hap­pen for liq­uids de­mand to plum­met to half of to­day’s level?

Gas de­mand will de­velop very dif­fer­ently, ac­cord­ing to each sec­tor and over time—only the in­dus­trial and power sec­tors are ex­pected to con­tinue to show growth. Gas de­mand growth is driven by China’s pol­icy push to­wards use of gas in the in­dus­trial and power sec­tors as well as by com­pet­i­tive prices in pro­duc­ing re­gions.

A com­bi­na­tion of in­dus­trial and res­i­den­tial dis­rup­tors could slow global gas de­mand growth to 0.3% per year, with power re­bound­ing to bal­ance out re­new­ables.

“Gas de­mand growth is driven by China’s pol­icy push to­wards use of gas in the in­dus­trial and power sec­tors.”

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