World Economic Forum discovered eight areas that are most likely to experience an advancement that result in serious impacts for the energy sector as a whole. Yet, the eight shifts could impact fossil fuel and result to its reduction. Today, due to climate change and the challenges the environment faces it is of a big importance for the industry to find solutions in additional renewables.
According to WEForum, although any one of these eight shifts could have a substantial impact on annual oil, gas, coal, and power demand, the degree to which a shift occurs is interesting.
For instance, although it is expected that the electric vessels’ demand will increase, in the possibility that the acceleration becomes more rapid either due to consumer behavior, decreasing prices for EVs, or government action, oil demand from road transport could fall 70%.
As such, the eight shifts that could have a negative impact on the market, are:
- Faster uptake of electric vehicles;
- Efficiency, gains and faster uptake of low-emission fuels for aviation and marine;
- Accelerated cost reductions for renewables and storage;
- Accelerated electrification of residential heat;
- More rapid electrification of cooking in non-OECD countries;
- Increase demand reduction and recycling of plastics;
- More efficiency gains, recycling and low-emission feedstock in iron and steel;
- More electrification of EU industry low and medium temperature heat.
World Economic Forum’s analysis highlights that a combination of these eight shifts could have a disproportionately large impact on global energy markets.
If all shifts fully materialize, fossil fuel demand by 2050 would be significantly affected. Overall, fossil fuels in 2050 would account for 58% of total primary energy demand.
Yet, the eight shifts could have the fossil fuel demand decreased in the 2020s, as oil and coal are declining and share gas remains stable.
