Global demand for energy will plateau from 2030 as electrification drives increased energy efficiency, according to a report from quality assurance and risk company DNV GL.
The report predicts the continued growth of renewable generation, suggesting renewable sources will deliver nearly half the world’s energy supply by 2050, cutting energy related carbon emissions in half by that time. Gas supply will peak in 2035 – but it will still be the biggest single source of energy by 2050.
The report claims that the proportion of global GDP spent on energy will fall from the current level of five per cent to just three per cent by 2050, driven by efficiency measures and the failing cost of renewables. It predicts solar PV and wind costs will fall by 18 per cent and 16 per cent respectively as capacity rises, and that electric vehicles will reach cost parity with traditional vehicles in just five years.
Group president and chief executive of DNV GL Remi Eriksen said: “The profound change set out in our report has significant implications for both established and new energy companies. Ultimately, it will be a willingness to innovate and a capability to move at speed that will determine who is able to remain competitive in this dramatically altered energy landscape.”
Despite increased energy efficiency, the report predicts global warming of 2.5 degrees centigrade by 2050, missing two degrees target set out in the 2015 Paris Agreement.
Eriksen said: “Even with energy demand flattening and emissions halving, our model still points to a significant overshoot of the 2°C carbon budget. This should be a wake-up call to governments and decision-makers within the energy industry. The industry has taken bold steps before, but now needs to take even bigger strides.”