French oil and gas giant TotalEnergies (NYSE: TTE) has forecast that global oil demand will peak after 2030 in its most likely scenarios. The company attributes this projection to factors such as population growth, slow investments in power grids, and delayed adoption of electric vehicles (EVs).
Aurelien Hamelle, Total’s Director of Sustainability and Strategy, explained at a press conference that approximately 4.5 billion people in the “global south” currently lack sufficient access to energy. With population growth expected to continue through 2050, he said global energy production will need to increase fourfold to address energy poverty in these regions.
TotalEnergies’ outlook stands in contrast to recent predictions from other energy agencies. Last month, the International Energy Agency (IEA) reported that global demand for all fossil fuels is expected to plateau this decade. The IEA noted that while oil and liquefied natural gas (LNG) supplies are projected to keep growing, this could put downward pressure on oil and gas prices.
Despite the bearish outlook for fossil fuels, the IEA sees positive implications for consumers. As renewable energy sources expand, the agency anticipates a decline in electricity prices. IEA Executive Director Fatih Birol emphasized that, barring significant geopolitical tensions, the world will likely enter a period of lower energy prices in the latter half of this decade due to eased market balances for oil and gas.
The IEA also predicts a major shift in energy consumption patterns. Electricity use is expected to grow six times faster than total energy demand over the next 10 years. Electric vehicles are forecast to make up 50% of global car sales by 2030, up from 20% today. Furthermore, the IEA expects the levelized cost of electricity (LCOE) for solar power with storage in the U.S. to drop to $45 per megawatt-hour (MWh) by 2030, significantly undercutting natural gas, which is expected to cost $70/MWh.
In summary, while TotalEnergies sees oil demand peaking post-2030, other agencies like the IEA are predicting a shift toward renewables, with the potential for lower energy prices as fossil fuel demand levels off.
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