ExxonMobil’s annual energy review is always a fascinating read. This year’s issue looks out to 2040 for the first time. It thus forecasts the relative share of the major fuels over the next 30 years.
Interestingly, it also shares the blog’s belief, as set out in our ‘Boom, Gloom and the New Normal‘ eBook, that demographics will play a critical role in changing demand patterns over this period, noting that:
• “Demographics and economic expansion drive energy demand”
• “Population growth is slowing. In some places – many OECD countries plus China – populations will change little by 2040”
• China will see “a steep drop in its working age group”
• “India and Africa become some of the strongest areas of GDP growth”
EM also provide the above historical chart showing how fuel use has changed over the past 300 years.
Biomass, mainly wood (brown), was the main fuel from 1800. It began to be replaced by coal (light brown) from 1850. Then oil (green) began its reign from 1900. More recently, gas (red) has begun its rise. EM expect a 60% growth in its use by 2040. Hydro (light blue), nuclear (dark blue) and other renewables (yellow) are at an early stage of growth.
EM make the useful point that the variability of wind and solar power can be balanced by ‘on-demand’ sources. This will add to gas’s more obvious advantages such as its relative abundance and low price.