Wednesday, November 23, 2011

Energy Growth Slowing Sharply Around The World

World population reaches 7 billion people, Chinese energy demand is soaring, and the impression created is that global energy demand is growing rapidly. Not so fast actually.

While global energy demand is rising, the growth rate is slowing significantly.  For the last 27 years, world energy demand rose by 2% per year and is projected to increase by 1.4% per year from 2008 to 2035, even if there are no changes to current energy policies, including to the massive subsidies of fossil fuel and electricity consumption, that range from $300 billion to $500 billion per year.  Those numbers come from the International Energy Agency and its 2011 report (

Put another way IEA is projecting a 30% decline in the global growth rate for energy.  Indeed the IEA projects a 40% decline to an annual growth rate of 1.2% in its New Policies scenario in which the IEA models the impacts of declining fossil fuel subsidies and other policy changes.

To be sure, even with a 1.2% annual growth rate, global energy demand increases by 36% from 2008 to 2035.  That is a substantial amount of new energy production that will be required and the IEA projects that fossil fuels and non-fossil fuels will each provide 50% of the new, incremental demand.  But the slowing of the world's energy growth rate is a significant change in a fundamental world energy fact that warrants close watching.

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