Scottish energy consultancy Wood Mackenzie (WoodMac) says renewable-energy could grow nearly 500% globally over the next 20 years, with coal and oil demand peaking well before 2035.
The forecasts are in a new report – Fossil fuels to low-carbon: The majors’ energy transition – identifying three main risks facing the world’s biggest oil and gas companies.
According to Edinburgh-based WoodMac, these are the growth of renewable-energy, intensifying government policy and increasing low-carbon competition.
The report says natural gas and zero-carbon fuels will satisfy at least 60% of the rise in global energy demand to 2035, while under some scenarios renewable-energy could grow nearly 500%.
As global demand for oil slows and energy growth shifts to lower carbon fuels, renewables will grow rapidly across all regions, it adds.
Yesterday, WoodMac global trends research director Paul McConnell said: “As carbon policy intensifies, the oil and gas majors will face more regulatory burden and are likely to face increasing costs.
“Green financing could also mean higher cost of capital for more carbon-intensive oil assets, such as oil sands, as investors shift to alternative fuels and lower-carbon technologies.”
He added: “While all the major oil companies put a price on carbon in their long-term planning, the big question is how much risk each has taken into account.
“As costs for renewables and energy storage continue to fall, subscription-type services could open up new low-carbon growth markets. For example, electric car sharing.”
WoodMac’s report says up to 50% of majors’ production could be hit with carbon costs over the next decade as they come under pressure to “de-risk their existing business models and diversify into low-carbon energies”.
Recommended for you
