Ahead of the 23rd World Energy Congress the World Energy Council has issued a statement calling on the energy sector to embrace a historic opportunity to redefine the energy contract.
Seven uncomfortable 'realities' are highlighted in the statement, including that per capita demand for energy will peak before 2030, that we haven’t done enough to decarbonise our economies, and that these two on their own will have a significant impact on national and private balance sheets.
Marie-José Nadeau, chair of the World Energy Council, commented: “The grand energy transition is an unstoppable phenomenon. Adapting to this new reality with innovative technologies and different business models will require a massive effort and our ability to respond rapidly will define both winners and losers.”
Christoph Frei, secretary general of the WEC, added: “Slower global growth and shifting demographics define a new normal. The main driving forces are increasing political pressure to decarbonise, innovation fuelled by an unstoppable digital revolution, as well as emerging risks for which yesterday’s unlikely has become today’s reality. This is a moment for positive and inclusive leadership where leaders and society need to embrace these new realities, define a new energy contract to enable timely decisions, maintain stable investment frameworks and strive for continued innovation.”
• The council has issued a statement and a prediction that global demand for energy will peak in 2030 thanks to new technology and stricter government policies.
In a report on a range of scenarios for global energy use, the group of academics, energy companies and public sector bodies outlined a “fundamentally new world for the energy industry” calling it the “grand transition”.
The report, launched ahead of the World Energy Congress in Istanbul, forecast demand for energy – including transport fuels, heating and electricity – would begin to fall after 2030.
Ged Davis, executive chair of scenarios at the World Energy Council said: “Historically people have talked about peak oil but now disruptive trends are leading energy experts to consider the implications of peak demand.”
But while overall energy demand will begin to fall, demand for electricity will double by 2060, the council said, requiring greater infrastructure investment in smart systems that promote energy efficiency.
The “phenomenal” growth of solar and wind energy is predicted to continue, while coal and oil will fade out of the energy mix. Solar and wind accounted for just 4% of power generation in 2014 but could supply as much as 39% by 2060, while hydro-electric power and nuclear are also slated to grow. But fossil fuels will remain the number one source of energy, having fallen just 5% since 1970 from 86% of energy supply to 81% in 2014.
The council drew up three scenarios to assess different areas of energy use. The range of outcomes could see fossil fuels provide anything from 50% to 70% of energy by 2060, said the council, which is the UN-accredited global energy body. Under two of the scenarios, oil production will peak in 2030 at between 94m barrels per day (bpd) and 103 mb/d, although the third scenario would see it peak and plateau at 104 m/bpd for a decade from 2040.
But the council warned that keeping global warming below 2°C would require an “exceptional and enduring effort, far beyond already pledged commitments and with very high carbon prices”.
Its predictions for carbon emissions vary wildly depending on the strength of efforts to tackle the problem, from a reduction of 61% by 2060 to a slight increase of 5%. Overall, the report’s theme of a grand transition envisages lower population growth, radical new technologies, greater environmental challenges and a shift in economic and geopolitical power.
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