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Global Energy Perspective 2021

Global Energy Perspective 2021


The Global Energy Perspective describes our view on how the energy transition can unfold, through four scenarios.

The global energy landscape is going through major shifts
We publish this long-term energy outlook at the start of 2021, after a year that has brought extraordinary challenges. The COVID-19 pandemic and subsequent economic crisis caused unprecedented disruption in the energy landscape—and the path to recovery  
remains uncertain. 

At the same time, the world’s energy systems are going through rapid transitions that   are triggered by simultaneous shifts in technological development, regulations, consumer preferences, and investor sentiments. Our Reference Case sheds light on these developments and provides a synthesis on how energy demand will evolve. 

In the short term, a return to pre-COVID-19 levels is projected in one to four years.
The impacts of COVID-19 have permanently shifted energy-demand curves. Although demand rebounds to 2019 levels in one to four years, it does not return to the previous growth path. Electricity and gas rebound more quickly than oil demand, and coal does not return to pre-COVID-19 demand levels. 

Recent work by McKinsey on the effects of the COVID-19 crisis on economic growth introduces a set of scenarios, reflecting varying levels of effectiveness of the public-health response and speed and strength of policy interventions. 

From these scenarios, two were selected as most likely outcomes by a group of more than 2,000 executive respondents globally: “Virus Contained; growth returns” and “Muted Recovery.” At the time of this report’s publication  
(January 2021), the latest actual numbers show a trajectory that comes closest to “Virus Contained; growth returns.” Consequently, this scenario underlies the projections in our report. 

Given the unparalleled size of many economic-recovery packages, the focus of the stimulus measures plays a key role in shaping energy systems in the decades to come.
In the longer term, fundamental shifts already emerging pre-COVID-19 are going to be the key drivers of the energy transitionAs economies and energy markets recover from the short-term impact of COVID-19, fundamental shifts in the energy system continue, and the coming decades will likely see a rapid acceleration of the energy transition.
In the longer term, fundamental shifts already emerging pre-COVID-19 are going to be the key drivers of the energy transition
As economies and energy markets recover from the short-term impact of COVID-19, fundamental shifts in the energy system continue, and the coming decades will likely see a rapid acceleration of the energy transition.
Energy efficiency
The energy intensity of the global GDP drops  40% by 2050 because of energy efficiency gains coming from technological advancements and fuel switching
As an example, EV passenger cars require  3–4 times less energy compared with conventional ICE engines
Energy consumption per capita drops by  5% globally from 2019 to 2050, despite strong economic development that affects billions of people during that same period

Peaks in fossil-fuel demand keep coming closer
Projected peaks in demand for hydrocarbons have come forward. Oil demand peaks in 2029 and gas in 2037, whereas coal shows a steady decline.

Yet in the Reference Case fossil fuels continue to play a major role in the energy system by 2050, driven by growth in areas such as chemicals and aviation.

In the Accelerated Transition scenario, demand for fossil fuels continues to decline, particularly oil and coal. Peak oil demand could move forward by five years to the early 2020s, at a level less than 1 MMB/D above 2019 levels.


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Source: mckinsey
Anand Gupta Editor - EQ Int'l Media Network