36 Funding the Growth 7 Calls to halt investment in fossil fuels were premature. Demand for oil in 2050 will have barely fallen from today’s levels and as such, so we must at least sustain the current level of investment and continue to invest in innovation, to produce harder-to-access oil and increase the recovery rate from existing fields. Today’s operators, with the help of AI, are becoming smarter, building topside capacity to limit initial peak production but maintain production for longer, upgrading recoverable oil estimates to prolong this production and minimize costs, which has helped to drive today’s oil prices below the long-term average of $73/bbl in 2024 real terms. The rate of electrification in the Global North and some industrial heartlands of the Global South will simply not be able to scale up renewables fast enough or reliably enough to satisfy growing demand for electricity. Electrification will grow from 22% of energy demand to 35% in 2050 (or 51% in a high case). While renewables will account for 85% of new installed capacity, gas will play a significant role in replacing retiring inefficient coal generation capacity (800GW of Coal retirements anticipated 2024-2050) and meeting the demand gap. As domestic gas demand in the US and Europe peaks, and production in Asia declines as it increasingly industrialises and needs increased dispatchable power loads, LNG demand will grow ~70% to resolve the regional imbalance. Efficient & effective distribution of capital to unlock global growth AI and the Intelligence Age will not run on code alone, but will require an abundance of kW to achieve their potential. Islanded data centers with their own power generation will evolve to support the power consumption of a city the size of Dubai, requiring reliable energy to run training models 24/7. The uncertainty in data center power demand is significant, with the base case assuming The world requires vast amounts of materials as it prospers, building huge cities of steel and cement, industrial plants and the infrastructure that connects it all together. The electrification of our energy system will add to this materials demand, with the associated demand for these metals being 1% of total energy demand alone. Petrochemicals will play an increasing role in substituting more energy-intensive materials, increasing from 6% of core materials (excluding lumber). While the world may need abundant affordable energy, it needs to make choices along the way. Getting the speed of transformation right can help to reduce energy demand, emissions, materials and capital, but it is a complex jigsaw to solve. See Call Out Box 3 global demand will grow 10-fold from 71GW today to 800GW in 2050, but the range of analyst views is wide, with the US alone (38% of data center demand) ranging from 220GW to 950GW in 2050. Yet let’s not get carried away – while data centers share of electricity demand will grow from 1.5% today to 8% in 2050, we have a lot of work to do to keep the lights on across the globe. This year, keeping the lights on has caught a lot of media attention. Today’s grid languishes in the 20th Century, relying on transformers with an average age of between 24 and 45 years. The grid is the largest machine in the world, connecting spinning generating capacity to thousands of spinning motors, all vulnerable to the smallest of changes in grid’s frequency. As the power system increasingly relies on renewable generation, the grid capacity needs to be increased three to four times that of conventional thermal power capacity, adding to the challenge of bringing the grid into the 21st Century. In the US alone, the grid will need 70,000 miles of additional transmission capacity by 2035, yet last year only 350miles of capacity was built. At that rate we will only have enough capacity by 2235 not 2035! Unattributed quote There’s $40 trillion sitting in sovereign and pension funds. It’s not about the money — it’s about execution. We need to rewire the financial system so that capital can flow into power and data infrastructure.