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Energy gets brighter

As the world’s population increases its energy consumption will grow, but much more efficiently

Global energy demand per capita will peak before 2030 as technological innovation and government policies will drive efficiency increases, Nuri Demirdoven, Managing Director of Accenture Strategy Energy told delegates.

Rapid digitalisation in the end user utility sector and upstream will also be a key driving force in increasing both energy efficiency, Demirdoven said.

This is in stark contrast to historic global growth levels, which have seen global demand for energy more than double since 1970.

"Demand per capita is peaking but absolute energy demand is still increasing because of (increased) productivity and a rising population," Demirdoven said. "What's changing is how we're meeting that demand and the mix is changing. With electrification of our homes, they are getting smarter."

Accenture Strategy has developed a set of global energy demand projections alongside the World Energy Council. These scenarios: Unfinished Symphony, Modern Jazz and Hard Rock, differ depending on the impact of energy market evolution and the extent to which regional cooperation is achieved to mitigate the effects of climate change.

The Modern Jazz scenario is a forecast based on assumptions that global energy demand increases will be driven by the economy.

"In this, we're using solar panels because they're cheaper than the alternatives," Demirdoven said. "We're using electric vehicles because we as consumers believe they're more beneficial to us from a cost perspective. In this one there's electricity for all. Because the market makes it happen."

The Unfinished Symphony scenario is a forecast which assumes greater international coordination and a bigger role for government to reach carbon reduction goals.

The Hard Rock scenario assumes local energy needs are prioritised over global ones, resulting in higher use of fossil fuels.

The scenarios forecast an ongoing shift in final energy consumption with demand for electricity doubling by 2060.

This will be partly driven by a tripling of the global light duty vehicle fleet, Demirdoven said, and increased use of electric vehicles within it.

Renewable power will also see significant gains in the global energy mix over the next few decades. Solar and wind, which today account for around 4% of power generation globally, will experience the largest increase over the five decades. By 2060 the two renewable fuels will account for between 20% and 39% of power generation globally.

Meanwhile, fossil fuel usage could fall to as little as 50% of the total, global primary energy mix, according to one of the report's scenarios.

Despite this, the world's carbon budget will be exceeded within the next 30 to 40 years, Demirdoven said.

In all three scenarios global gas demand will rise, Demirdoven said whereas growth in global liquids demand will start to fall from 2030.

"Historically we've seen (global liquids demand) increases of 0.8m b/d per year," Demirdoven said. "In Unfinished Symphony, which is the most interventionist scenario, we see a 0.5m b/d per year increase."

Across all three scenarios fossil fuels will remain the mainstay provider of global energy demand for decades to come, particularly in the transport sector.

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