THUR, SEPTEMBER 7 2017-theG&BJournal-DNV GL’s Energy Transition Outlook (ETO), a forecast that spans the global energy mix to 2050, predicts that global demand for energy will flatten in 2030, then steadily decline over the next two decades, due to step-changes in energy efficiency. The fossil fuel share of the world’s primary energy mix will reduce from 81% currently to 52% in 2050.
Demand for oil will peak in 2022, driven by expectations for a surge in prominence of light electric vehicles, accounting for 50% of new car sales globally by 2035. Gas will continue to play a key role alongside renewables in helping to meet future, lower-carbon, energy requirements. Major oil companies intend to increase the share of gas in their reserves, and DNV GL expect an accelerated shift by 2022 as they decarbonize business portfolios.
While demand for hydrocarbons will peak over the next two decades, significant investment will be needed to add new oil and gas production capacity and operate existing assets safely and sustainably. However, the results of DNV GL’s model reinforce the need to maintain strict cost efficiency in order to achieve the margins necessary for future capital and operational expenditure.
“We have seen impressive and important innovative efforts across the energy industry, resulting in cost saving and efficiency gains. The oil and gas industry must continue on a path of strict cost control to stay relevant. Coming from a tradition of technological achievements, and having the advantage of existing infrastructure and value chains, this industry has the potential to continue to contribute to energy security and shape our energy future,” said Elisabeth Tørstad, CEO, DNV GL – Oil & Gas.
“Increased digitalization, standardization and remote or autonomous operations will play a central role in achieving long-term cost savings and improving the oil and gas industry’s carbon footprint. We also expect the industry to turn to innovations in facility design, operating models and contracting strategies,” Tørstad added.
DNV GL has published a suite of reports on the Energy Transition Outlook, which are available to download free of charge. The main ETO report covers the transition of the entire energy mix to 2050. Three sector-specific supplements will accompany this: an oil and gas supplement and a renewable, power and energy supplement are both available this week. A maritime supplement will be available later this year. DNV GL’s oil and gas supplement considers some of the key trends identified by the company’s model across the sector’s value chain, and explores their implications.
Some of the findings of DNV GL’s inaugural Energy Transition Outlook, a report that charts the world’s energy future to the middle of the century includes expectations that energy efficiency will improve faster than global economic growth due to the rapid electrification of the world’s energy system, leading to a plateau in energy demand from 2030.
2- Renewable energy sources will continue to rise, making up nearly half of global energy supply by 2050, cutting energy-related CO2 emissions in half by that time.
3-Gas supply will peak in 2035, but will still be the biggest single source of energy by mid-century.
4-Oil supply will flatten out in the period 2020 to 2028 and then fall significantly to be surpassed by gas in 2034.
5-The world will manage the shift to a renewable future without increasing overall annual energy expenditure, meaning that the future energy system will require a smaller share of GDP.