Oil, gas and coal will continue to dominate global energy supplies after 2050 as demand for electricity grows faster than the transition to renewables. This follows from a report by the consulting company McKinsey. The continued use of fossil fuels poses a major challenge to achieving global climate goals.
The demand for electricity is expected to increase mainly due to the expected increase in the industrial and construction sectors. This growth is expected to range from 20 to 40 percent by 2050. Data centers in North America are believed to be the biggest contributors to this growth. McKinsey expects fossil fuels to account for 41 to 55 percent of global energy consumption in 2050. This is less than the current 64 percent, but more than previous estimates indicated. The use of natural gas for electricity production should increase significantly. Coal consumption may remain at a higher level. Data center-related electricity demand in the US will grow by nearly 25 percent annually through 2030. Demand for data centers worldwide is expected to increase by an average of 17 percent annually between 2022 and 2030, especially in Organization for Economic Co-operation and Development (OECD) member countries. Alternative fuels are unlikely to achieve widespread adoption before 2040 unless they are mandatory. But renewables have the potential to cover 61 to 67 percent of global electricity supplies in 2050, McKinsey added. McKinsey partner Diego Hernandez Diaz told Reuters that McKinsey now does not expect oil demand to peak before the 2030s. Combined with regional and global economic conditions for some fossil fuels, this means fossil fuels could account for up to 55 percent of global electricity supplies by 2050, according to the report. The global energy outlook is affected by geopolitical uncertainty and governments prioritizing affordability and secure energy over meeting the goals of the Paris Agreement. The report also cites the risks of an energy recession, tariffs and technological innovation as factors behind continued dependence on fossil fuels.