Asia is projected to become the largest market for energy imports by 2040: BP
Global energy demand could increase by about a third by 2040, led by fast-growing developing economies in Asia, says BP in the 2019 edition of its Energy Outlook. Asia is projected to become the largest market for energy imports by 2040, with China and India accounting for one third of total global energy demand.
China will remain the largest energy market in 2040, despite shifting away from energy-intensive industrial sectors. This will lead to a rise in industrial energy demand in India and other parts of Asia. BP projects that by the mid-2020s, India will surpass China as the world’s largest growth market in global energy.
Other key observations from the report:
- Renewables will overtake coal as the largest source for the global power sector by 2040. Driven by significant declines in solar and wind power costs, renewables are expected to rise sharply over the next two decades, to comprise around 30 per cent of the energy mix for the power sector. This echoes the thinktank roundtables at SIEW 2018, which discussed ASEAN’s clean energy challenge. Panellists said that renewables will have a lower levelized cost of electricity in the Asia-Pacific region by 2020 compared to coal and natural gas.
- High demand for natural gas is expected to continue. Natural gas growth is projected at an average rate of 1.7 per cent per annum, as plentiful supply and increasing availability keep costs low. Natural gas will maintain their current 20 per cent share in the global power sector through to 2040, even as the shares of oil and coal drop below 30 per cent. This builds on BP’s 2018 Energy Outlook, which found that the global energy mix will be at its most diverse by 2040.
- Rising oil demand is expected to plateau by the 2030s. Global demand for liquid fuels could peak at 108 million barrels per day in the 2030s but is expected to drop after that. Transport demand for liquid fuels will slow as alternative sources of energy, such as electricity and natural gas, enter the transport system. However, BP says that trillions of dollars of investment in new oil over the next two decades will still be required to meet the rising demand.
For more scenarios that could shape the global energy markets until 2040, please download the BP Energy Outlook 2019.