Skip to main content

Editorial comment

If there is one thing our industry can be sure of at the moment, it’s that the need for energy is growing rapidly. According to United Nations (UN) projections, the global population will reach 8.5 billion by 2030, 9.7 billion by 2050 and 11.2 billion by 2100, with almost all of the growth occurring in developing countries, where energy use is set to double to allow for increased activity and improved living standards. That's a lot of people, and a lot of power.

Register for free »
Get started now for absolutely FREE, no credit card required.

“Understanding the demographic changes that are likely to unfold over the coming years, as well as the challenges and opportunities that they present for achieving sustainable development, is key to the design and implementation of the new development agenda,” said Wu Hongbo, UN Under-Secretary-General for Economic and Social Affairs, following the release of the World Population Prospects: The 2015 Revision report last July.

It is now clearer than ever that governments, industry organisations and private companies must work together to develop new, broad spectrum solutions for energy provision and, as a result, economic progression – this is where the energy mix comes into play. To put it simply, each country must establish the right balance of energy resources available to it, such as fossil fuels, nuclear power, hydropower or renewables, to match demand with supply and create the ideal ‘energy mix’.

In its Energy Outlook: 2016 Edition, despite the ever-changing nature of the global fuel mix, BP notes that fossil fuels remain the dominant source of energy, providing around 60% of the growth in energy and accounting for almost 80% of total energy supply in 2035 (down from 86% in 2014). Gas is predicted to become the fastest growing fossil fuel (1.8%/y), on the back of ample supplies and supportive environmental policies. Oil is also growing steadily at 0.9%/y, although the trend decline in its share continues. Renewables, including biofuels, are set to experience rapid growth (6.6%/y), as costs continue to fall and the pledges made at the COP21 Paris climate talks support their widespread adoption, causing their share in primary energy to rise from around 3% today to 9% by 2035. Coal consumption, in contrast, is likely to slow sharply (0.5%/y) as the Chinese economy rebalances.

According to BP, more than half of the increase in global energy consumption will be used for power generation, as a result of the long-run trend towards global electrification – the share of energy used for this purpose will increase from 42% today to 45% by 2035, and more than a third of the growth will take place in developing regions across the Asian and African continents. As the main sector where all fuels compete, power generation will play a mammoth role in the evolution of the global fuel mix, with renewables and gas gaining share relative to coal – the share of coal is projected to fall from 43% in 2014 to around 33% in 2035, while the share of non-fossil fuels is set to increase, reaching nearly 45% by 2035. This will result in a more balanced and diversified portfolio of fuels for power generation.

As energy mixes are individually tailored to each and every country on the planet, and resources and technologies are constantly changing or developing, the results are, evidently, very diverse; however, it is clear that fossil fuels will be the 'star of the show' for many years to come, which is certainly an encouraging sign for oil and gas.