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World Energy Demand forecast

, May 27, 2013, 2 Comments

world-energy-demandThe world energy demand forecasts made by the International Energy Agency (IEA) are quite revealing. According to the forecast the world demand for coal is expected to increase from 3294 million tons of oil equivalent (mtoe) in 2009 to 4101 mtoe in 2035.

During the same period the demand for oil will increase from 3987 mtoe to 4645 mtoe. The compound annual growth rate (CAGR) for the former will be 0.8 per cent per annum while for the latter it is expected to be 0.6 per cent per annum. Thus the use of coal is expected to increase at a faster rate as compared to use of oil for the world as a whole.

The consumption of nuclear energy and hydro power is expected to increase at a CAGR of 2.1 per cent in both cases. The fastest CAGR is expected to be realized by renewables the figure being 7.8 per cent in this case. However, the demand for renewables will still be only 690 mtoe in 2035 as compared to 4645 mtoe for oil. Gas and biomass and waste are both expected to record a CAGR of 1.7 per cent during the period.

The energy demand forecast shows that the fastest increase will be in the consumption of renewables and the slowest increase will be in oil. This is good news for the environmentalists though the news is not equally good when one finds that the coal consumption will increase at as faster rate than consumption of oil. The nuclear energy demand is expected to be increasing at a CAGR of 2.1 per cent which will again not be music to the ears of the environmentalists.

On the whole world energy demand is expected to increase at a CAGR of 1.3 per cent during the next quarter of a century which will not be a welcome scenario as far as environmentalists are concerned.

India is expected to be one of the countries expected to record the fastest increase in oil demand during the period 2010 to 2035. In India primary oil demand is expected to increase from 3.3 million barrels per day (mb/d) during 2010 to 7.4 mb/d in 2035, i.e. at a CAGR of 3.4 per cent. China is another country that is expected to record a high CAGR of primary oil demand of 2.1 per cent. Primary oil demand is expected to decline in USA and Japan during the period. In USA primary oil demand is expected to decline at a CAGR of 0.9 per cent while in Japan the decline is expected be at a CAGR of 1.2 per cent. For the world as a whole primary oil demand is expected to increase at a CAGR of 0.5 per cent.

Even though growth in oil demand in India is expected to be at one of the fastest rates during the next quarter of a century, primary oil demand will continue to be higher in USA and China during 2035 as compared to India. Primary oil demand is expected to be 14.9 mb/d in China in 2035 compared to 14.5 mb/d in USA and 7.4 mb/d in India. Russia and Japan will record comparable levels of primary oil demand in 2035 of 3.2 mb/d and 3.1 mb/d respectively.

The forecasts indicate that oil will continue to be the predominant fuel used as energy in the world even after another 25 years. However, demand for oil will grow at a moderate pace considering the supply constraints that are likely to emerge in the production of oil. As regards countries China is expected to overtake USA as the most important consumer of oil considering the declining CAGR of oil consumption in the USA and the rapid increase in China.






About author
P V Rajeev , former Economic Adviser of Government of India and worked as an Economist in Government of India for more than three decades. ...more
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  • Rajeev

    Well compiled article!