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About the Energy and Utilities Industry

Global consumption of energy has expanded 45% in the last twenty years and over the next twenty years is forecast to grow by 39%. Energy consumption outside of OECD countries will grow 68% by 2030, highlighting the energy impact from emerging economies. Over the course of the next couple of decades, the fuel mix will changes relatively slowly, although gas and non-fossil fuels will increase their share in place of coal and oil. Clearly, there has been much focus on renewable energy, and renewables, including biofuels, will grow the fastest over the period to 2030 at 8.2% per year.

Oil will experience a decline in market share, while gas will experience growth. Whilst coal has seen an increase in market share, this is mainly due to industrialisation in China and India. Coal's gains will decline to 2030.

In the ten years to 2010, fossil fuels accounted for 83% of the growth in energy. To 2030, it will have declined to 64% of energy growth. Furthermore, in 2030 non-fossil fuels will account for 36% of energy growth, which is larger than any single fossil fuel. Renewables, including biofuels, will account for 18% of that energy growth. The diversification of the fuel mix is being driven largely by the power sector, where non-fossil fuels, led by renewables, account for more than half of the growth. Gas accounts for more than half of the growth in fossil-fuelled power.

Oil will be the slowest growing fuel source in the next twenty years. It is expected however, that global liquids demand will ruse by 16.5 million barrels a day, surpassing 102 million barrels a day by 2030. The growth in oil will come from emerging economies, with emerging Asian countries accounting for 75% of the global growth.

China is the largest source of oil consumption growth and in 2030 will overtake the United States to be the world's largest oil consumer. China is much less dependent on oil in its overall fuel mix than many other emerging economies at similar points in their development. It is also probable that China will introduce policies to put a brake on oil consumption, such as tax hikes on transport fuels.

The fossil fuel growing most rapidly to 2030 will be natural gas, with Asia accounting for the largest production and consumption demands. China will account for 56% of Asia's consumption growth. Gas will grow 7.6% a year in China to 2030 to a level comparable to that of the European Union today. Brazil, Russia, India and China will contribute 40% to the total non-OECD gas consumption growth. In terms of global gas reserves, there were 6,621 Tcf in 2009, enough to last for 63 years at current levels. Unconventional gas reserves could add at least 30 years to this timeline.

The US gas market has been revolutionised by unconventionals. Share gas and coal bed methane are set to represent nearly 60% of North American production by 2030, although there are risks associated with the cost and methods of production.

China's growth has been supported by coal. China accounts for 47% of global coal consumption and will grow to 53% in 2030. China does recognise that it needs to transition from coal dependence, due to environmental issues and the increasing cost of coal resources.

In summary, the global fuel mix will continue to evolve and change - ultimately with non-fossil fuels accounting for a significant share of energy growth. The contribution of renewables to energy growth increases from 5% to 18%. This does mean that fossil fuel's contribution to the fuel mix will fall, from 83% to 64%.