Despite all climate change talk, global energy consumption continues to rise

30 May 2018 Authored by Consultancy.uk

Global energy consumption has more than tripled in the past 50 years, driven by unprecedented economic and population growth in the Asia Pacific region. A new analysis from specialist energy consultancy UMS Group examines the reasons behind this dramatic upsurge in consumption, and outlines its projections for future demand.

Calculating the production, supply and consumption of energy on a global scale is an immensely complex challenge. Yet it is possible. Accurate data stretching from 1965 to 2016 is available and has been investigated by analysts from boutique consultancy UMS Group. With its specialist focus on the global energy and utilities industries, the consulting firm can offer distinctive insights into the past, present and future trends surrounding one of the world’s most urgent issues.

The numbers involved are astronomical given the technological advances and population surge that has occurred since the Industrial Revolution. But, as outlined by Mart Vos, Consultant at UMS Group, changes in both production and consumption have been especially remarkable in the past five decades. To properly assess this paradigm shift, the researchers work with figures based on Total Primary Energy Supply (TPES) and gauge energy in Mtoe (Millions tonne of oil equivalent). 

Global energy consumption

Global TPES, says Vos, can be calculated by taking the sum of production and imports for each country, or region, then subtracting exports and storage changes. “Energy losses throughout this process means that the global annual TPES is always higher than the total final consumption”, notes Vos, but the measurement remains the most accurate indication of global production and supply that can be used with confidence. 

The most recent data acquired by UMS Group relates to the year 2016 when the global TPES stood at more than 13,000 Mtoe. In layman’s terms this equates to the burning of almost 13 billion tonnes of crude oil in one year alone. The annual volume of tonnes of crude oil burned has risen by almost 10 billion since 1965 when the global TPES was 3,731 Mtoe. Roughly speaking, TPES worldwide has increased by a factor of 3.5 in the past 50 years, and almost doubled since 1985. 

Aside from the sharp increase in TPES, the most eye-catching statistic is the enormous rise in Asia Pacific region’s contribution to global energy supply. The region was responsible for 12% of total Mtoe in 1965, which almost quadrupled to 42% in 2016. By contrast the Eurasia region has halved its share of worldwide Mtoe from 44% in 1965 to 22% in 2016. North America too has seen a substantial decline in its share – from 38% in 1965 to 21% in 2016. Although the Middle East has seen its share of the energy pie rise slightly, and Africa’s is expected to shoot up in the coming decades, Asia Pacific is the undoubted driver of global TPES increases.

Asia’s rise in energy consumption can be chiefly explained by China’s singular transformation from sleeping giant to economic superpower. “China’s share of total energy consumption went up from 10.5% in 1990 to 27.7% in 2016”, says Vos, while “Europe’s share in the same period fell from 20.8% to 13.5%”. Although India is also on the rise and is in terms of population size about as big as China (both around 1.3 billion), China today accounts for 63% of Asia’s energy consumption.

global energy mix

India is however expected to play catch-up, remarks Vos, with energy demand expected to grow exponentially in the near future. Interestingly, China may play a key role in lifting India – “China’s transformation to an economic powerhouse led to a steep increase in China’s GDP per capita, from $2.695 in 2007 to $8.123 in 2016. As a result, China is now no longer attractive for the cheapest labor processes, such as plastic recycling or cloth manufacturing. India and other countries in South-East Asia are likely to take over these processes, since their GPD per capita is significantly lower than China’s.” By comparison, India’s GDP per capita stood at $1.709 in 2016.

“The prediction is therefore that energy demand in Southeast Asia will grow at twice the pace of China.”

Fossil fuels

China and India are at the forefront of developing new solar energy technology but the big three fossil fuels – coal, gas, and oil – together provide most of the planet’s energy. In 2016 oil (32.7%) was the single largest source of energy, followed by coal (28%), and gas (22.4%). Nuclear, biofuels, hydro, and other renewables together made up around 18% of TPES. 

The United States, Russia, and Saudi Arabia are the world’s three leading oil producers. Russia and the US lead the rankings on total natural gas production, while China dominates global coal production, accounting for 44.6% of the total while India comes a distant second with 9.7%. Together the Asian giant produce more than half the world’s coal and, because of huge internal demand, they export less than 1% of it. 

Global energy consumption by region

Saved by the Sahara?

In contrast to the dramatic rise in energy consumption over the past five decades, UMS Group anticipates the annual rise to slow down to just 2.3% per year, a cumulative increase of 28% by 2040. Vos cites the enhanced focus on energy efficiency in the US, Europe and Japan, as well as a growing energy and environmental consciousness in China, as major reasons for the slower consumption growth.

While the global giants reevaluate their energy sources and consumption, Vos identifies future energy demand hotspots such as India and South East Asia are set to follow a completely different trajectory. “The way how this region will generate the energy needed for their predicted energy consumption boom, will be one of the most important levers in the energy transition mix.” 

UMS Group’s forecasts for Africa (which has 13% of the world’s population but accounts for just 4% of energy demand) project a rapid surge in consumption due to increasing population, urbanisation and economic productivity. Solar could play an important role in Africa’s energy demand”, concludes Vos, “if just 0.4% of the Sahara desert was used for solar panels...the entire continent could be supplied with energy.”

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