EnergyInsights.net 
Oil demand to peak in 2030 as energy experts slash forecasts 19-06-2016 3:23 pm

 

oil pump jack
McKinsey has slashed their forecasts for the world’s energy use even as global economic growth climbs Credit: Daniren/Alamy
 

The latest downward revision to forecasts, from consulting firm McKinsey, could  leave major new investments uneconomic if demand for energy fails to meet expectations.

McKinsey said it has cut its forecast for growth in demand  to 0.8pc a year to 2040, “well below mainstream base case perspectives”, including its own estimate of 1.1pc made last year.  

Demand for oil is expected to grow even more slowly  beyond 2025, with the research pointing to a possible  peak of 100m barrels a day by 2030, from current levels of 94m.

Major investments in the energy system may no longer be needed and some could be at risk of being strandedMcKinsey Energy Insights

The  industry is mired in debt  after the plunge in oil prices in recent years. 

McKinsey’s Occo Roelofsen said despite an expected increase in global population of around 36pc, and a doubling in global gross domestic product (GDP), shifting energy sector dynamics are set to depress energy demand.

“ This change is driven by three factors: first, overall GDP growth is structurally lower as the population ages; second, the global economy is shifting away from energy-intense industry towards services; and third, energy efficiency continues to improve significantly,” he said. “Peak oil demand could be reached around 2030. ”

oil wells at Gudong oil field
 
“Peak oil demand could be reached around 2030. This has major implications for the global energy balance, oil market dynamics and the oil industry,” said McKinsey’s Occo Roelofsen Credit: Wu Hong/EPA

 Meanwhile growth in electricity demand will outstrip other sources of energy by more than two to one, due to the steady “electrification” of building and industry in China and India.

Almost 80pc of the capacity needed to meet this  increase will be  from solar and wind power, McKinsey predicts.  

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