Business | Oil & Gas

Emerging markets lead in energy growth

Developing countries' demand will be double that of other nations

By Aya Lowe, Staff Reporter
Published: 00:00 May 19, 2011

Image Credit: Gulf News Archive
While global demand for energy will be up 35 per cent in 2030 compared to 2005, demand coming from non-OECD countries is expected to increase by 70 per cent in 2030.

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Dubai: The main drivers for energy demand will come from countries outside the Organisation for Economic Cooperation and Development (OECD), according to ExxonMobil's latest Energy Outlook Report.

While global demand for energy will be up 35 per cent in 2030 compared to 2005, demand coming from non-OECD countries is expected to increase by 70 per cent in 2030, the report says.

"Following the downturn, the biggest surprise this year was the fact that developing economies didn't slow down nearly as much as expected.

"This resulted in a higher GDP output of three per cent for the developing economies," said Rob Gardner, manager for the energy and economics division of ExxonMobil's Corporate Strategic Planning department.

By 2030 the world's population will be close to eight billion with 85 per cent residing in non-OECD countries.

China and India are fast growing economies, each with an average annual GDP growth of six per cent expected from now until 2030.

The report also forecasts that energy demand in the Middle East will grow 85 per cent between 2005 and 2030 driven mainly by power generation and industry activities.

Saudi Arabia and Iran will generate the most demand followed by the UAE and Iraq.

Electricity demand

The main driver for demand is power generation which is forecast to represent 55 per cent of the total growth in demand to 2030.

Global electricity demand is predicted to rise by more than 80 per cent in the same period with non-OECD countries driving the growth with more than 150 per cent growth to 2030. On the other hand, OECD demand is expected to rise by about 25 per cent.

The types of energy consumed is also forecast to change in the coming years.

While oil, natural gas and coal will continue to meet most energy needs, the fastest growing demand among these fuels will be for natural gas.

"There will be a growing use of natural gas and other less carbon intensive energy supplies which will help mitigate environmental impact," said Gardner.

Global demand for natural gas is expected to rise by about 85 per cent between 2005 and 2030 and reach a point where natural gas will provide more than a quarter of the world's electricity needs.

Renewable energies such as wind, solar and biofuels will also grow sharply to 2030, however, due to their current limited output, the contribution is likely to remain small in comparison to other forms of energy.

In 2005, renewables represented less than 0.5 per cent of the total energy output. By 2030 this number is predicted to rise to just under three per cent of the total.

Global focus

A recent report by the UN body reporting on climate change suggested renewable energy could meet 80 per cent of world demand by 2050.

Gardner however disagrees, saying: "By 2030 fossil fuels will be 79 per cent of the mix.

"Nuclear, biomass, renewables etc will make up the rest. We don't have a 2050 projection, but 80 per cent seems aggressive," he said.

In line with the increased global focus on renewable energies, Dubai recently announced that it was looking into reducing its energy consumption by 30 per cent by 2030.

"About a 30 per cent reduction in energy consumption in Dubai by 2030 means saving four gigawatts of power which is equal to the production of seven power plants," Najeeb Zaafrani, CEO of the Dubai Supreme Council of Energy, said at the Dubai Global Energy Forum.

Outlook on nuclear energy is positive

While nuclear energy output has suffered some setback's recently as a result of the explosions at the nuclear plant in Fukushima, Rob Gardner, manager for the energy and economics division of ExxonMobil's Corporate Strategic Planning department predicts that nuclear energy is going to continue being an important power generation source in the future.

"Nuclear is going to continue being an important energy source. It's an important energy source for the future, it's important that countries diversify their energy supplies," said Gardner.

"We have over 200 gigawatts of increased nuclear capacity going in, 100 of that is going to be in China. US and Europe are also expanding. Right now we see some nuclear capacity offline in Japan and some has been shut down in Germany," he said.

At the Global Energy Forum held in Dubai recently Dr Mohammad Al Baradei, former head of the IAEA emphasised the growing appetite for nuclear energy in the face of meeting the challenge to provide sufficient and sustainable energy supplies.