The International Energy Agency (IEA) released its World Energy Outlook 2023 on Tuesday, projecting that global demand for natural gas will reach its peak by 2030. The report indicates that gas consumption has been steadily increasing by an average of almost 2% since 2011 but will slow down to less than 0.4% annually for the remainder of the decade.
The outlook, titled “The Golden Age of Gas is nearing an end,” highlights that the power and buildings sectors have already witnessed peaks in natural gas usage. Power plants and space heating boilers, which are among the largest consumers of natural gas, account for 39% and 21% of total demand, respectively. The decline in natural gas use in these sectors is expected to contribute to the overall peak in demand by 2030.
The IEA also notes that although annual additions to the global installed capacity of natural gas power have been slowing down, the overall capacity continues to expand. This is in contrast to coal, where installed capacity is projected to decrease in the future.
“The demand for natural gas in the power sector is expected to decline from today until 2050, with a particularly significant dip in the 2030s when co-firing in gas-fired power plants starts to be deployed at a large scale,” the report explains.
In advanced economies, the rebound in natural gas demand observed in 2021 was short-lived and declined below pre-pandemic levels the following year. The report predicts that this trend will continue, with demand decreasing by 2030, offsetting any growth in emerging markets and developing economies.
The findings of the IEA’s report have significant implications for the global energy landscape. As natural gas demand reaches its peak, it suggests a shift towards cleaner and more sustainable energy sources. This aligns with the growing global emphasis on reducing greenhouse gas emissions and combating climate change.
The transition away from natural gas may impact the global energy sector and have implications for energy producers, consumers, and policymakers. It underscores the need for continued investment in renewable energy sources and energy efficiency measures to meet the world’s energy demands in a sustainable and environmentally responsible way.
Overall, the World Energy Outlook 2023 highlights the projected peak in global natural gas demand by 2030 and outlines the declining trend in usage in the power and buildings sectors. This transformative shift in the energy landscape presents opportunities and challenges for the global energy industry as it seeks to balance energy security, economic growth, and environmental sustainability.
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