How Will Demand Increase?
Over the last quarter century, as the world economy has grown, global energy demand has increased by about 60 percent. It is expected that today’s expanding populations and economies will result in continuously large increases in energy demand in the future – experts have predicted that by 2030, world energy consumption will increase by as much as 50% from 2000 levels (see the "EIA reference" projection in the following graphic).
Among worldwide forecasts, the (Energy Information Administration) EIA has projected in one scenario that developing countries will require 95% more energy by 2030 than their current levels of energy use, while OECD nations, which currently account for roughly one half of the world’s energy consumption, could require about 24 percent more energy by 2030. A key factor behind non-OECD demand growth is the expected continued expansion of large markets such as China.
About 1.6 billion people currently live "off the grid" entirely; unlocking energy demand in such areas presents both the enormous opportunity to eliminate poverty and to promote economic development and the associated challenge of making these new energy supplies affordable and environmentally sustainable (See Energy & Development). Where populations are gaining access to modern energy’s benefits, consumers are pressing for further improvements in their standards of living including more widespread use of air conditioning and car ownership – which in turn contributes to increase in energy demand.
Another factor creating more demand for energy is the simple fact that the population is increasing – the current global population is expected to increase from today’s 6.7 billion to 9.2 billion in 2050. It is expected that a large portion of this growth will happen in developing countries – non OECD population is projected to rise from 5.4 billion in 2007 to 7.9 billion in 2050. Population growth is only one driver of energy demand growth – India’s population will grow by over 20% by 2020, while China’s will grow by less than 10% – yet energy demand growth is forecasted to be eight times higher in absolute terms in China than in India. This difference is largely driven by China’s more rapid GDP growth and the rise of its middle class that is demanding more energy to fuel its growing appetite for convenience and mobility. The Middle East is also driving demand for energy; as a result of income effects and subsidies demand for petroleum products, this region is expected to surpass Northwestern Europe by 2020.