18 18 Meeting the growing demand for energy in uncertain times Overall, the global population is projected to increase by 1.5 billion, reaching 9.7 billion by mid-century, even though the rate of growth has almost halved from 1.2% pa from 2000 to today, to just 0.7% pa to 2050. With that, the rate of consumption will decline, as construction and infrastructure expansion slows, leading to a deceleration in the speed of global growth. As the economy gets bigger, however, absolute growth – which effectively measures incremental economic activity – continues to increase. See Fig. 4 Slower economic growth with lower energy intensity Figure 4: Economic growth is slowing but absolute activity is expanding Unattributed quote Unattributed quote 19 With the global economy projected to expand by 75% in real terms by 2050, the call on energy and resources will continue to increase. That said, a more efficient use of energy per unit of GDP means that energy demand grows by only 18% as the global economy shifts from highly intensive industrial activity and infrastructure investment to less energy-intensive service- and technology-led growth and improving productivity. See Fig. 5 The energy-intensive growth of China is unlikely to be replicated elsewhere. Today more than 50% of the world’s steel production, minerals and metals processing, and chemicals capacity is in China. However, China’s own demand for energy-intensive materials is expected to slow as construction and infrastructure investment declines along with its population, requiring half the number of houses to be built each year compared to the last 20 years. Figure 5: Population, GDP and energy demand growth Figure 6: Wealth distribution impact access to appliances and travel with huge implications for energy Developing country Number of People Developed country Wealth Access to Elec Clean Cooking Mobile Phone Fridge Scooter Car Holiday Washing Machine Wealth distribution Productivity, Wealth and Consumption Private Jet 0 1 2 3 4 5 1985 1990 1995 2000 2005 2010 2015 2020 2025 741 1,146 879 1,595 1,644 1,697 2,110 1,405 3,277 1985 1990 1995 2000 2005 2010 2015 2020 2025 % Global Growth Annual Global Growth ($bn - 5-year average) 741 1,146 879 1,595 1,644 1,697 2,110 1,405 3,277 1985 1990 1995 2000 2005 2010 2015 2020 2025 Annual Global Growth ($bn - 5-year average) +75% 2024 2035 2050 +18% 2025 2035 2050 +18% 2024 2035 2050 Population (Billions) Real GDP ($Trillions) Final Energy (EJ) Emerging Markets China Advanced +75% 2024 2035 2050 +18% 2025 2035 2050 +18% 2024 2035 2050 Real GDP ($Trillions) Final Energy (EJ) Emerging Markets China Advanced 2024 2035 2050 +18% 2025 2035 2050 Final Energy (EJ) +75% 2024 2035 2050 +18% 2025 2035 2050 +18% 2024 2035 2050 Population (Billions) Real GDP ($Trillions) Final Energy (EJ) Emerging Markets China Advanced +75% 2024 2035 2050 +18% 2025 2035 2050 +18% 2024 2035 2050 Population (Billions) Real GDP ($Trillions) Final Energy (EJ) Emerging Markets China Advanced +75% 2024 2035 2050 +18% 2025 2035 2050 +18% 2024 2035 2050 Population (Billions) Real GDP ($Trillions) Final Energy (EJ) Emerging Markets China Advanced Today’s consumption per capita is expected to decline in developed countries, as the turnover of aging capital stock is replaced by more energy-efficient electrified assets such as heat pumps in homes and electric power trains for transportation. In emerging economies energy per capita will increase with wealth and living standards. See Fig. 6. However, consumption will not replicate that of developed countries. Industrial demand growth is more muted and lower in its energy intensity, in some parts of the world constrained by infrastructure and capital investment; while demand for housing and transport increases in lockstep with wealth which, on average, remains significantly below that of the developed world. Worldwide, we are living with an electricity system that is inefficient — in buildings, in infrastructure — and we need to replace it. Through an exercise enabling private investment, we found we can save up to 30% in electricity and water before adding new capacity. The human body needs calories. AI needs electricity. Without those calories, data and compute mean nothing. We need all of the above — molecules and electrons — because electricity for intelligence cannot come from a single source.