Global Energy Outlook 2050 - McKinsey & Co
Monday December 5th, 2016
The next 35 years will undoubtedly bring significant change to the way we power our world. Already we see rapidly falling renewable generation and battery storage costs, increasingly connected grids, and a shift towards electric cars emerging as major components of this change.
As pollsters learned to their chagrin in 2016, trying to predict what the world will look like in a few months can be a challenge. But what about 35 years from now? The Energy Insights Team of McKinsey & Company, a strategy consultancy, seeks to do just that. Their Global Energy Perspective to 2050 provides an energy demand outlook meant to be usable for strategic decision making.
Sixty LBS students and alumni were on hand in early December to explore possible future energy scenarios with members of the McKinsey Energy Insights Team, including Matt Frank, a specialist focusing on the medium and long-term demand of energy.
“Fossil fuels will dominate the energy mix through 2050, but their share of total energy will decline to 74% from 82%.”
The audience was invited to explore what were, at times, some surprising predictions about the future of energy. Using remote voting devices, they participated throughout the presentation in interactive quizzes.
McKinsey’s team predicts that most of the world’s annual energy demand growth (just 0.7% overall) will be driven by the chemicals sector, as the rest of the world’s energy demand plateaus, suggesting population growth will increasingly be offset by energy efficiency gains.
Oil and coal appear to be the biggest losers with coal demand peaking by 2023 and oil demand growth flattening to just 0.4% per annum.
Those hoping for a significant renewables revolution were left somewhat disappointed with McKinsey forecasting renewables to capture a modest 8 additional points of the energy mix over the entire time period. That said, solar and wind are expected to make up 80% of all new generation capacity additions through 2050 and electric cars could represent 30% of all new cars sold as soon as 2030.
For more information on the Global Energy Outlook to 2050, click here.