Interesting to see the different scenario’s popping up on the near future of our energy industry.
There is a big debate what will follow fossil: electricity gained from either transition of gas to power and/or renewables by solar and wind, or a move to H2 as replacement of natural gas.
There are many reports pleading for either of the ways to replace electricity generated by fossil fuels (gas and coal) or re-using the gas infrastructure for H2, generated by either transforming fossil gas into H2, or transforming water with hydrolysis to H2 with usage of renewable power.
The ‘electrification’ of our energy sources means heavy investments in reinforcing and expanding the electricity network. Alternatively going for H2 means changing the natural gas network to H2 including all appliances, with large scale H2 generation not yet proven.
Oil demand to peak in 2022 but gas to become primary energy source by 2035, DNV GL says
Oil and gas will be crucial components of the world’s energy future, according to DNV GL’s forecast of the energy transition published on Tuesday.
While renewable energy will grow its share of the energy mix, oil and gas will account for 44% of world energy supply in 2050, compared to 53% today. Gas will become the largest single source of energy from 2034, DNV GL’s report revealed.
DNV GL’s Energy Transition Outlook (ETO), a forecast that spans the global energy mix to 2050, predicts that global demand for energy will flatten in 2030, then steadily decline over the next two decades, thanks to step-changes in energy efficiency. The fossil fuel share of the world’s primary energy mix will reduce from 81% currently to 52% in 2050.
Demand for oil will peak in 2022, driven by expectations for a surge in prominence of light electric vehicles, accounting for 50% of new car sales globally by 2035. However, the stage is set for gas to become the largest single source of energy towards 2050, and the last of the fossil fuels to experience peak demand, which DNV GL expects will occur in 2035.
DNV GL futher said that gas will continue to play a key role alongside renewables in helping to meet future, lower-carbon, energy requirements. Major oil companies intend to increase the share of gas in their reserves, and DNV GL expect an accelerated shift by 2022 as they decarbonize business portfolios.
While demand for hydrocarbons will peak over the next two decades, significant investment will be needed to add new oil and gas production capacity and operate existing assets safely and sustainably. However, the results of DNV GL’s model reinforce the need to maintain strict cost efficiency in order to achieve the margins necessary for future capital and operational expenditure.
“We have seen impressive and important innovative efforts across the energy industry, resulting in cost saving and efficiency gains. The oil and gas industry must continue on a path of strict cost control to stay relevant. Coming from a tradition of technological achievements, and having the advantage of existing infrastructure and value chains, this industry has the potential to continue to contribute to energy security and shape our energy future,” said Elisabeth Tørstad, CEO, DNV GL – Oil & Gas.
“Increased digitalization, standardization and remote or autonomous operations will play a central role in achieving long-term cost savings and improving the oil and gas industry’s carbon footprint. We also expect the industry to turn to innovations in facility design, operating models and contracting strategies,” Tørstad added.