Emerging Economies to Fuel Energy Demand

Growth in global energy demand through 2040 will be driven by increasing prosperity and improving living standards in fast-growing emerging economies.

Plentiful supplies of energy will enable this increasing prosperity, according to the recently-released BP Energy Outlook 2018.

In the primary scenario outlined in the BP report, the majority of increased energy is consumed in Asia, with China, India and other non-OECD Asian economies accounting for two-thirds of global growth, Global Trade reported.

Energy demand within the OECD, meanwhile, will remain flat during this period.

China and India each account for 25% of the increase in world energy through 2040, but the trends seen in these two countries diverge dramatically.

China’s energy growth will slow significantly, as it transitions to a more sustainable pattern of growth and its energy needs change. India’s demand growth also slows, but much less so, making India the world’s largest growth market for energy in the 2030s.

The BP report projects that China’s energy demand will grow by 1.5% per year, less than a quarter of its growth rate over the past 20 years. China’s energy mix also changes, as it moves to cleaner and lower carbon fuels.

China’s coal consumption is projected to fall through 2040, in sharp contrast to the rapid industrialization seen in the country over the last 20 years when coal provided the vast majority of the energy used.

“It seems increasingly likely that China’s consumption of coal has peaked,” the report concluded.

Renewable energy, nuclear and hydro will account for over 80% of the increase in China’s energy demand through 2040. Renewables will become the second largest energy source in China during the period, overtaking oil.

The rise in India’s energy demand is supported by continued robust economic growth. Coal will continue to provide the main source of energy supporting India’s economy, accounting for 45% of the increase in energy demand.