OPEC says renewables should drive long-term growth in energy demand
Energy demand has strengthened following the decline associated with last year’s pandemic and is expected to continue to increase in the long term, with growth driven by renewables, including solar and wind power. , but coal should be left behind, according to the World Oil Outlook report from the Organization of the Petroleum Exporting Countries was released on Tuesday.
“The demand for energy and oil increased dramatically in 2021, after the massive drop in 2020, and continued expansion is expected in the longer term,” wrote Mohammad Barkindo, OPEC Secretary General, in the front -about the report.
âGlobal primary energy demand is expected to increase by 28% between 2020 and 2045â¦ driven by an expected doubling in the size of the global economy and the addition of around 1.7 billion people in the world by 2045 “, he wrote. All energy sources will “witness growth, except coal”.
Oil is expected to retain the highest share in the global energy mix from 2020 to 2045, according to the report, with demand for primary oil expected to rise from 82.5 million barrels of oil equivalent, or Mboe, per day in 2020 to 99 Mboe per day in 2020. 2045.
In 2020, oil accounted for 30% of global energy needs and is expected to “gradually increase” to more than 31% by 2025, but decline to 28% by 2045, according to the report.
Oil prices have climbed so far this year, with US benchmark West Texas Intermediate CLX21 crude,
settling at $ 75.45 per barrel on the New York Mercantile Exchange and the world benchmark Brent BRNX21 crude,
at $ 79.53 on Mondays. These were the highest contract settlements in the first month since October 2018.
An increase in sales of electric vehicles is expected to limit long-term growth in oil demand, with electric vehicles expected to approach 500 million by 2045 to account for nearly 20% of the global vehicle fleet, according to the report. ‘OPEC.
Despite this, international combustion engine vehicles (ICEs) are expected to “maintain their prominent role in the composition of the global fleet”, accounting for around 76% of the global vehicle population by 2045 against a backdrop of increasing in developing regions, according to the report.
The latest OPEC World Oil Outlook report also indicated that “the electrification of the transport sector” will likely progress at a faster pace than predicted in the previous report.
âAlthough the global auto market has suffered a setback due to the pandemic, the year-over-year decline has not affected EVs,â and these additional EVs âwill require production of ‘additional electricity, likely from low-carbon sources and renewable energy, and affected oil’s share of the energy mix,’ the report said. This fuel substitution is “about to continue, not only in the transport sector, but in industries, as well as heating and power generation.”
Meanwhile, the category the report calls âother renewablesâ – made up mostly of solar, wind and geothermal energy, which are energy sources that can be replenished naturally – is expected to drop from 6.8 Mboe per year. day in 2020 at 36.6 Mboe per day in 2045, ârepresenting the largest incremental contribution to the future energy mixâ. It is âthe fastest growing energy source with its share in the global primary energy mix exceeding 10% in 2045, compared to only 2.5% in 2020â.
The report states that “the falling costs of solar and wind power make renewable electricity production more competitive globally compared to coal and gas production.”
Natural gas is expected to become the second fuel in the energy mix, with demand reaching 85.7 Mboe per day in 2045, exceeding demand for coal by 61.3 Mboe per day that year. Nonetheless, the growth in demand for natural gas is expected to slow over the period 2020 to 2045 due to “the increasing penetration of renewables and the continued efforts to improve energy efficiency,” the report said.
On Monday, the NGV21 first month natural gas futures contracts,
set at $ 5.706 per million British thermal units, the highest since February 2014.
Coal, meanwhile, is unlikely to return to pre-crisis levels, given “the fuel shift in power generation and policies focused on phasing out coal,” according to the report. This limits the prospects of a “post-pandemic coal rebound”.
The demand for coal is expected to increase from 72.9 Mboe per day in 2020 to 61.3 Mboe per day in 2045, with its share of the energy mix falling to 17.4% in 2045 from 26.5% in 2020. The report indicates that the decrease is “mainly due to measures aimed at reducing emissions.”
China’s energy mix is ââdominated by fossil fuels, with coal accounting for over 60% of the country’s energy demand in 2020, but by the end of the projection period in 2045, coal’s share of demand China’s energy supply is expected to drop to around 35%.
Read more : Soaring gas prices in Europe are linked to Asia’s coal supply deficit, strategist says