China, India Lead Growth in Energy Demand

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The Asia-Pacific regions energy demand in 2040 will be 61 percent higher in 2040 than in 2010, with oil, gas and coal accounting for 78 percent of total energy consumption, according to ExxonMobils The Outlook for Energy: A View to 2040.

Of projected growth in global energy demand to 2040, China is projected to account for 30 percent, and India for 20 percent. China and India together are expected to account for half the growth in global energy demand because these two developing economies will lead the world in terms of population size and the pace of growth in standards of living, ExxonMobil stated.

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Demand for all energy types in Asia-Pacific will increase at an average annual rate of 1.6 percent a year from 2010 to 2040.

Coal will remain the top energy source, supplying 35 percent of the regions energy demand in 2040, down from 44 percent in 2010. Coals share of Chinas power generation fuel mix is expected to decrease from about 85 percent in 2010 to less than 50 percent in 2040, the company projects, while nuclear, natural gas and renewables are all expected to grow in share. In India, ExxonMobil expects coal to continue to be the main fuel for power generation, nearly tripling over the 2010-2040 outlook period.

Natural gas will be the fastest-growing energy source in Asia-Pacific, with consumption rising 168 percent from 2010 to 2040. By 2040, natural gas is expected to account for about 15 percent of the heavy-duty transportation sector in both China and India. Globally, about 45 percent of the projected growth in natural gas as a fuel for heavy-duty vehicles is seen coming from China and India. China is making increased use of its stranded gas resources through small liquefaction operations (trucked LNG), the company noted, and India also is promising increased use of natural gas.

Oil will supply 26 percent of the regions energy demand in 2040, down slightly from 28 percent in 2010.

From 2010 to 2040, nuclear energys share of Asia-Pacifics total energy demand is expected to more than double to 8 percent, up from 3 percent. Globally, nuclear capacity is expected to increase by about 90 percent from 2010 to 2040, with growth led by China and India. The rapid expansion of Chinas nuclear power serves economic, environment and supply security needs, the company said. Nuclear power in India also is expected to see significant growth, rising about nine times by 2040, compared to 2010.

Wind, solar and biofuels are projected to account for 4 percent of energy supplies in 2040 in the region, up from 1 percent in 2010. This is identical to the global demand projection to 2040.

Asia-Pacifics energy demand for transportation will grow by 96 percent from 2010 to 2040, the company forecasted. Globally, such demand is expected to rise 40 percent over the outlook period, with China and India together accounting for about half of the global increase.

The number of light-duty vehicles in the world – cars, pickup trucks and sport utility vehicles – is projected to more than double, from 825 million in 2010 to about 1.7 billion in 2040. China is expected to account for about 40 percent of the global light-duty vehicle fleet increase. Other developing nations in the Asia-Pacific with strong fleet growth include India and Indonesia.

By 2040, the company projects Chinas light-duty vehicle fleet to reach about 400 million – 40 percent bigger than the U.S. fleet – compared to 60 million in 2010. The main reasons are rising incomes and an expanding middle class, the company said. Whereas 10 years ago, only the wealthiest Chinese were active in buying personal vehicles, cars now are being purchased much more broadly across all segments of the countrys population.

The company does note that even by 2040, China will likely only have about 30 cars for every 100 people compared to about 80 cars per 100 people in the United States and about 40 per 100 in South Korea. We believe that even as income levels rise, per capita vehicle growth in China and many other developing countries will not follow the pattern seen in many [Organization for Economic Cooperation and Development] nations, ExxonMobil said. Instead, we expect China and others, including India, to develop more along the lines of South Korea, where vehicle growth per capita to 2040 is limited to an extent by relatively high population density and government policies that seek to encourage public transportation.

Total energy demand for heavy-duty vehicles is expected to rise by about 65 percent from 2010 to 2040, driven by economic expansion and the associated increased movement of goods.

Chinas heavy-duty transportation fuel demand is expected to rise by 130 percent in 2040, compared to 2010, putting it ahead of U.S., the tops in such demand in 2010. India is projected to reach third place in 2040, as its heavy-duty transportation fuel demand growth outpaces even China, more than tripling over the 2010-2040 period. Together, China and India likely will account for about 30 percent of the global growth in demand for energy for heavy-duty vehicles, the company said.

Asia-Pacifics carbon dioxide emissions are projected to increase 42 percent from 13.2 billion tons in 2010 to 18.9 billion tons in 2025, and then remain at that figure in 2040.

Within the region, the company expects China to rise from 7.4 billion tons in 2010 to 10.8 billion tons of carbon dioxide in 2025, before declining to 9.2 billion tons in 2040. ExxonMobil expects a drop in Chinas emissions post-2025 as further diversification of its energy mix, including reduced dependence on coal, and a tempering of industrial growth combine to produce a peak in Chinas carbon dioxide emissions around 2025.

The 2015 edition of The Outlook for Energy: A View to 2040 is posted on ExxonMobils web site here.

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