Commodities Buzz: Global primary energy demand is set to increase around 23% over next two and half decades

OPEC World Oil Outlook 2050 stated that global primary energy demand is set to increase from around 312 million barrels of oil equivalent per day (mboe/d) in 2025 to nearly 383 mboe/d in 2050. This is an increase of around 23% over the outlook period, or 0.8% p.a. on average. The growth will come almost entirely from developing countries and regions, led by India, Other Asia, the Middle East, Africa and Latin America. At the same time, primary energy demand in developed countries is expected to increase only marginally, or in some cases decline.

Demand for all primary fuels is set to increase in the period to 2050, except for coal. Demand for renewable energy, including biomass, solar, wind, hydro and other sources, is expected to record the strongest combined growth of 51.3 mboe/d. Solar and wind account for most of this expansion, driven mainly by declining generation costs and policy support. However, grid constraints and rising integration costs remain the key challenges.

Demand for oil and gas is also expected to increase strongly, in line with the need for reliable and affordable energy. Oil demand is expected to rise by 18.6 mboe/d to 2050, while natural gas rises by 19.3 mboe/d. After a long period of stagnation, nuclear energy is likely to see significant growth, rising by 10.5 mboe/d within the outlook period. At the same time, demand for coal is expected to drop by 29.3 mboe/d, due to unfavourable energy and climate policies and its substitution by other fuels, especially in the power sector.

Oil is set to maintain the largest share in the energy mix over the entire forecast period. It is projected to be at just below 30% by 2050. The combined share of oil and gas is expected to be at around 54% at the end of the forecast period. At the same time, the share of renewables in the energy mix increases to around 26% in 2050, up by ten percentage points (pp) from around 15% seen in 2025.

Total electricity generation is expected to increase from around 32,000 terawatt hours (TWh) in 2025 to around 59,500 TWh in 2050.

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