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The key global gas industry body has criticised the scenarios which are relied on by policymakers in tackling climate change for failing to take into account future energy demand, and warned of energy shortages by 2030.
The Swiss-based International Gas Union said there was a “significant gap” between what was forecast for demand based on historical consumption patterns and the pathways shown by institutions such as the International Energy Agency to achieve the cuts in emissions behind climate change.
The biggest contributor to greenhouse gas emissions is the burning of fossil fuels for energy and heating, including the shortlived but potent methane which is the main component of gas. Scientists say a rapid near-term solution to global warming would be to reduce methane emissions.
A new report by the industry group seeks to challenge the underlying assumptions in climate plans, however. “If energy system planning and decisions about supply investments across energy sources and infrastructure are based on scenarios that underestimate the actual energy demand growth, we are heading for a significant global energy crisis,” said Menelaos Ydreos, IGU secretary-general.
“Supply investments need to be planned well ahead based on expected demand, so the resource is there by the time it is needed,” he said. “If plans are made for a demand level that is understated, there will be severe energy shortages.”
The IGU report showed that between 2021 and 2024, global energy demand had risen 2.7 per cent annually. At that pace, the world would consume 586 exajoules (EJ) of energy in 2030, according to the IGU.
This would be led by “new sources of power demand” such as the adoption of energy-intensive AI, as well as the increased need for cooling, especially in developing countries, brought about by more extreme temperatures, the group said.
In contrast, “all the diverse energy demand scenarios examined . . . assume that the growth rate of global energy demand will significantly decelerate towards 2050”, the report said.
It added that the scenarios indicate “a flattening and eventual decline in demand”, something that it said had not been seen since the Industrial Revolution apart from periods of severe disruption such as the Covid-19 pandemic, when economic activity slowed and energy consumption waned.
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For example, the scenario from the International Energy Agency, which charts a pathway for the global energy sector to achieve net zero carbon dioxide emissions by 2050, assumes energy demand at 452EJ in 2030.
The difference with demand forecast under the present growth trend reaches 134EJ, which is twice the energy demand in Europe in 2023.
Even under the IEA’s stated policy scenario, or what it calls “a more conservative benchmark for the future”, the gap is 60EJ — equivalent to Europe’s annual consumption.
The IEA declined to comment on the gas industry report assumptions.
The IGU also compared its outlook with scenarios from the Institute of Energy Economics Japan, and Rystad Energy, which authored the report. Compared with the IEEJ’s “reference scenario”, or an outlook which takes into account past trends as well as the energy and environmental policies that are in place, the difference in energy demand reaches 64EJ.
The energy demand gap was the lowest when compared with Rystad’s scenario which limits global warming to 2.2C, at 39EJ.
However, this is beyond the Paris accord to limit global warming at 2C and ideally to 1.5C to prevent irreversible planetary consequences. The world has already warmed by at least 1.1C since the pre-industrial era.
“Energy systems can’t be designed on scenarios alone, because scenario assumptions always face a risk of diverging from reality, even if the outcome they are aiming to achieve is the most desirable one,” Ydreos said. “Both scenarios and current trends are needed to plan energy investments and assure near and medium-term security of supply.”
