Energy 2050: The Paradox of Choice

The availability of energy resources, the climate, greenhouse gas emissions, the pursuit of carbon neutrality, and demographics are all changing the course of traditional energy develops. Participants in the Russian Energy Week session ‘Scenarios of Global Energy Development’ discussed what path countries will choose in the long term until 2050.

KEY CONCLUSIONS

Experts have developed all sorts of scenarios for changes in traditional energy usage

“The uncertainty surrounding numerous parameters of the energy transition that is under way has led to a fairly wide range of possible paths for global energy development. In this regard, modern studies have virtually no point forecasts. Each analytical group usually proposes at least three possible scenarios for the energy transition – from the inertial continuation of existing trends in the energy sector to the implementation of the goal proclaimed in the Paris Agreement of achieving carbon neutrality by 2050,” said Alexey Kulapin, director general of the Russian Energy Agency of the Russian Ministry of Energy.

“The global energy balance will shift dramatically in the coming years […] [The share of] renewable sources will grow from 3% to 17% by 2050. The share of coal will decline significantly as efforts expand to clean up the air. Asia-Pacific countries will be the main place of growth, particularly countries with large populations. [The share of] natural gas will grow significantly – by 36% by 2050, and its main consumers will be the Asia-Pacific region, the Middle East, and Africa. Demand for gas in Europe and America will decrease due to the policies of the European Union, which wants to boost energy efficiency and use more renewable energy sources,” said Galia Fazelyanova, an energy economics analyst at the Department of Energy, Economics, and Forecasting of the Gas Exporting Countries Forum (GECF).

“BRICS has an enormous influence on the global energy sector. For example, with regard to coal, [BRICS countries account for] 70% of the global coal market […] How will the picture change? Within BRICS, the share of coal will decrease significantly, oil will adjust downward, while gas, renewable energy, and nuclear energy will increase. At the same time, I would like to note that fossil fuels will continue to dominate the BRICS energy balance in the next two decades,” said Vyacheslav Kulagin, director of the Global and Russian Energy Industry Research Division at the Institute of Energy Research of the Russian Academy of Sciences.

PROBLEMS

There are no definitive scenarios for the future of energy

“Due to the uncertainty surrounding numerous aspects of the technologies needed for the energy transition, the range of scenarios we are getting is quite broad, both for each individual forecast and, in particular, for the numerous scenarios developed by different analytical groups […] The difference between the scenarios, for example, in terms of the possible amount natural gas consumption by 2050 is more than 5 billion cubic metres. This is a quarter more than current global gas consumption. The difference in the possible share of renewable energy sources in primary energy consumption will reach 71 percentage points by 2050. Consequently, the difference in the possible share of fossil fuel energy sources by 2050 is 72 percentage points – from 15% to 87%,” Kulapin said.

“OPEC has multiple forecasts […] Our main scenario is based on energy needs as a whole [...] We see that the population is growing, as is the economy. It’s not an issue of energy being distributed unequally, the demographics in countries are also changing in different ways,” said Abderrezak Benyoucef, director of the OPEC Energy Studies Department.

Eliminating fossil fuels to achieve carbon neutrality by 2050 will require exorbitant investments

“According to our estimates, the net zero [emissions] scenario looks unaffordable for the global economy. The scale of investments that are already needed in the near future and for many years to come in the low-carbon development of technologies exceeds 7–8% of GDP, which well-respected researchers of the energy transition consider unlikely,” Kulapin said.

“It’s essential to understand that many countries now face the serious problem of ensuring that every home has stable electricity. Above all else, we need to resolve these issues and finance this area. And once everything is taken care of, additional opportunities will appear to develop new types of energy,” Kulagin said.

SOLUTIONS

The ‘Sustainable Technological Choice’ scenario could become a compromise

“A possible compromise could be an energy transition based on the ‘sustainable technological choice’ scenario with more intensive growth in the absorption capacity outside the fuel and energy industry. Moreover, not only increasing the absorption capacity of ecosystems, but also building up systems to directly absorb CO2 from the air in the developed world could play an important role,” Kulapin said.

“We want to make natural gas a sustainable fuel that will enable sustainable and inclusive growth. In a pragmatic assessment of the energy policy, we expect energy demand to grow significantly – by 22%. The supply of natural gas to the poorest countries will need to be increased. Its production will grow by 3% and amount to 33% by 2050,” Fazelyanova said.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en.

The Russian Energy Week International Forum is a key global platform for discussing current trends in the development of the modern fuel and energy sector. This event is traditionally held at the highest level, featuring the participation of leaders from the largest companies in the energy industry. In 2022, more than 70 events, with the involvement of over 270 speakers, were held as part of REW. The Forum attracted over 3,000 participants and media representatives from Russia, as well as 83 foreign countries and territories. The Forum is organized by the Roscongress Foundation and the Ministry of Energy of the Russian Federation, with the support of the Moscow City Government.

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