Global Energy Demand and Supply

Why are energy demand and consumption rising?

Energy demand is rising. It is predicted that by 2040, the energy supply will need to increase to meet the demands of another China and India combined (that's an additional 2.7 billion people!) That is a lot of people and a lot of energy. But what are the reasons for this increase in demand and consumption?

Wealth

Around the world, people are becoming wealthier. This means that the standard of living increases, as more people have access to wealth and goods. Energy demand will rise when people begin to be able to afford more cars or home appliances. Energy demand is rising in Newly Emerging Economies, such as India and China, as their economies start to boom.

Population increase

The population of the world is predicted to hit 8 billion by November 2022, and with further population rise, demand for energy is only going to increase further. If there are more people, more energy supplies will be needed to make sure everyone is energy secure.

Technology

Technology is increasing around the world. As we become an even more digitised society, people demand technological products, which require energy to function.

Energy consumption by country

The highest energy consumption is found in most of the developed countries around the world, such as the United States, and the majority of Europe. Although energy use is relatively high around the world, the map below shows that some places have little to no access to energy sources. This is predominantly found in developing countries. Look at central Africa for example; the majority of the continent has little to no energy use at all.

One of the clear exceptions is that energy use is high in some areas of the Middle East, such as Saudi Arabia, the U.A.E. and Oman; this is because oil is produced here, which is exported around the world. We'll talk more about this later.

Fig. 1 Global energy consumption 2019

Generally, developed nations are consuming more energy due to an average higher standard of living. However, in some developed nations, such as the UK, energy demand is actually decreasing, due to reduced industrial production, more efficient technologies, and an increase in awareness about saving energy. Take a look at our UK Energy Provision explanation for more.

Certain countries have the resources available to exploit, and therefore have higher energy consumption. For example, countries in the Middle East, like Saudi Arabia, or countries like the US or Russia have vast amounts of oil to use, export and supply to countries all over the world. Other countries may rely on imports for energy, meaning that they are not self-sufficient in their energy resources, such as the UK. As we have already discussed, lower-income or developing countries may have less access to secure energy sources. However, we are seeing an increase in the energy use of developing countries, as they begin to industrialise and become more developed.

Global energy consumption by source

Fossil fuels are still the main source of energy consumption globally. This is a problem, not only because fossil fuel production has a negative impact on the environment, but also because these resources are eventually going to run out. As you can see, the majority of our energy comes from fossil fuels (coal, oil, and gas).

Fig. 2 Global primary energy consumption

The use of renewable energy sources is beginning to increase, especially in more developed countries. Norway ranks highest in the world for its renewable energy resource use! Increased education and awareness of energy consumption, as well as increasing wealth, means that people are beginning to work towards reducing their carbon footprints.

Some areas of the world are also more suited to certain renewable energy sources. For example, the UK would be able to harness massive amounts of tidal power, as they are an island with a surrounding coastline (tidal power only produces a small amount of energy currently for the UK.) Geothermal energy can be harnessed in areas where there is tectonic activity. Some countries use an 'energy mix', meaning a combination of renewable and non-renewable energy resources are used, for example, in the UK.

Factors affecting energy supply and demand

There are many factors that could affect the supply and demand of energy. Let's briefly take a look at these factors:

• Physical e.g., geology, climate, location
• Technology e.g., fracking, renewable and sustainable energy sources
• Politics e.g., war and conflict, corruption, government policy

Make sure you check out the Factors Affecting Energy Supply and Demand explanation for more in-depth information and case studies.

Global energy demand and supply examples

So, we've already spoken about where demand and supply may differ. Let's take a look at some examples.

The UK's energy mix

As we have already mentioned, the UK's energy demand is actually going down- because of better awareness and efficiency. Although the UK does produce energy, such as gas, coal, nuclear, and renewable energy, the UK is not self-sufficient in energy supplies, meaning it imports a vast amount of the energy that is consumed in the country. As a way to increase supplies within the UK, the UK is beginning to source energy from fracking and renewable energy resources, such as wind power, solar power, hydroelectric power, and biomass.

The rise of China

China, located in East Asia, is known as a Newly Emerging Economy, and a BRICS country because of the country's growth.

Location of China on the continent of Asia, map data: © 2022 Google Earth

China consumes a large amount of energy, and is heavily reliant on fossil fuels; the country consumes the most amount of energy globally, even more than the United States. China relies on imports for its energy sources, meaning the country is not self-sufficient.

China is also not energy secure due to its reliance on the use of coal for energy, which is particularly bad for the environment. Although the use of fossil fuels has helped with China's development, as they were cheap and helped the country to industrialise, they are now planning ahead for the future; China intends to be carbon-neutral by 2060. The country is set to move towards producing newer forms of energy, to then supply to the rest of the world.