16 17 While the rate of economic growth may be slowing, the total size of the economy continues to grow at pace, calling on the world to provide more energy. While economic growth may shift from energy-intensive industries to less energy-intensive services, energy providers will be challenged to meet the pace of growth intensified by a growing consumer middle class and a new energy- intensive sector: data centers. To keep up with economic progress, we will need to do more with less - producing more energy at lower cost, using less energy per unit of activity and producing more GDP per unit of energy (the economic principle of productivity). To create a more efficient energy system, the world will need to electrify at pace, even as data centers running on electrons add huge demand and a growing Global South will rely on more electricity for cooling. The pace of energy growth and transition to electricity will be constrained by the availability of capital and resources, making the long-term outlook very uncertain, as growth tries to balance between energy, capital, resource and carbon intensity to deliver an optimal energy outcome. Energy has played an essential role in shaping the progress of modern civilization, driving industrialization, improving living standards, and supporting technological advancements. Over the past century, fossil fuels, nuclear and hydro provided cost-effective, reliable sources of energy to power industry, technology, transport and our homes, with energy demand growing almost four-fold in the last 60 years. Over the past 40 years, these developments have fuelled remarkable global achievements, such as a 10-year increase in life expectancy, a rise in literacy rates from 70% to nearly 90%, and the lifting of over 1 billion people out of poverty. Central to this progress is the energy industry, which has provided the critical infrastructure and resources necessary to support industrial, commercial, and social growth. Since 1980, global energy demand has increased by 2.2 times, from 270 EJ to 592 EJ. This surge has underpinned growing wealth and sustained economic development with world GDP per capita almost doubling over the period. But it has also highlighted persistent inequalities: 750 million people still lacked access to electricity in 2021, and electricity consumption per capita in the Global North remains five times higher than in the Global South. Meeting the Growing Demand for Energy in Uncertain Times 4 Keeping up the next wave of AI and consumer-enabled growth Long-term trend: Energy is at the nexus of three mega trends Figure 3: Energy is at the nexus of Three megatrends Looking ahead, the world is at the nexus of three megatrends (Fig. 3) which will shape the future energy landscape. • The energy system transformation will need significant upfront energy and investment to meet the growth in the minerals required for solar, wind, grid expansion, battery storage and EVs. • Increasing access to energy for emerging economies, in particular in the Global South, and progress towards meeting basic requirements for quality of life such as access to electricity, clean water and basic transportation. • The emergence of AI, which will add to energy demand but will also accelerate innovation in improving productivity, discovering more energy- efficient materials, optimizing a more complex energy ecosystem, and supporting less energy-intensive economic progress, helping propel the planet into its next phase of growth. Significant uncertainty exists around the speed of progress on these three megatrends, but what is clear is that any plausible pathway for the energy system must continue to ensure the provision of affordable and secure energy. In doing so, it will need to balance energy intensity (energy efficiency – doing more with less), capital intensity (the effective distribution of capital), resource intensity (the demand for critical minerals) and carbon intensity (GHG emissions) which, in a more pragmatic energy approach, is the outcome of efficient resource allocation. Achieving higher rates of electrification of end-use demand will be key to improving the overall efficiency of the energy system, reducing inefficiencies that result from thermal losses. These include replacing internal combustion engines with electric mobility and conventional boilers with heat pumps, making electrification one of the defining trends of the next 25 years. Unattributed quote Energy Transformation Emerging Economies AI revolution Oil demand to plateau but still contribute to ~ 25% of global energy demand in 2050 Renewables & gas to meet 28% & 24% respectively of total energy demand in 2050 Base chemicals demand to grow 65% by 2050 Emerging economies contribute to ~ 65% of global growth till 2050 Global South share of demand increases from 30% to 38% for gas and from 35% to 45% for oil India and the Global South to make up ~37% of global electricity demand in 2050 Advanced analytics & AI have the potential to transform energy companies & improve energy efficiency across industries AI to become major energy demand driver, with data centers consuming 8% of global power by 2050 1 2 3 We are seeing unprecedented growth in demand for gas-powered turbines. All technologies are needed — gas, nuclear, renewables — planned in advance to make sure we can deliver what is required.