Energy demand will rebound quickly following the Covid-19 pandemic, with hydrogen set to “change the landscape”, according to research.
On 18 January, McKinsey published its Global Energy Perspective 2021, highlighting developments in the world’s energy systems, as well as forecasting how energy demand will evolve in the years that follow. After Covid-19, it stressed government policies have become more important in the energy transition with the focus of stimulus packages set to play a key part in shaping energy systems in the following decades.
Power consumption is set to double by 2050 as energy demand electrifies, wealth increases and green hydrogen gathers momentum. On green hydrogen specifically, the report forecast it to become cost competitive in the 2030s, with indirect power demand for electrolysis accounting for around 40% of electricity demand growth from 2035 to 2050, mostly in industry and transport.
Low cost renewables will dominate power markets and outcompete existing fossil assets in most regions by 2030, with fossil fuel demand peaking in 2027. By 2036, half of the global power supply will come from intermittent renewable sources. Enabling this shift will require both traditional capacity and new, flexible capacity to ensure system security, with batteries to play an important role.
