Global demand for fossil fuels is expected to peak in 2023, something which will put oil, coal and gas assets worth trillions of dollars at risk, since energy giants may be unprepared for the inevitable energy transition, a prominent climate change think tank revealed in a fresh report.
MOSCOW (Pakistan Point News / Sputnik - 11th September, 2018) Global demand for fossil fuels is expected to peak in 2023, something which will put oil, coal and gas assets worth trillions of Dollars at risk, since energy giants may be unprepared for the inevitable energy transition, a prominent climate change think tank revealed in a fresh report.
"Rapid global growth of clean technologies will see fossil fuel demand peak in the 2020s, putting trillions at risk for unsavvy investors oblivious to the speed of the unfolding energy transition ... Solar and wind will displace all growth in fossil fuels as they continue to expand against a backdrop of falling energy demand. With global energy demand expected to grow at 1-1.5% and solar and wind at 15-20% a year, fossil fuel demand will peak between 2020 and 2027, most likely 2023," Carbon Tracker said in the report.
According to the think tank, the demand for fossil fuels will soon start to fall due to decreasing costs of renewable energy coupled with many governments' efforts to pursue clean energy, curb emissions and reduce air pollution.
"The 2020s will be the decade of fossil fuel demand peaks, as one bastion after another is stormed and overwhelmed by the rising renewable tide. This will inevitably lead to trillions of dollars of stranded assets across the corporate sector and hit petro-states that fail to reinvent themselves ... Fossil fuel demand has been growing for 200 years, but is about to enter structural decline. Entire sectors will struggle to make this transition. They can expect price declines, greater competition, restructuring, stranded assets and market derating," Kingsmill bond, a new energy strategist for Carbon Tracker and author of the report, said.
However, the think tank noted that global energy giants and fossil fuel exporting countries appear "blind to this risk" and do not expect peak fossil fuel demand for another generation or more.
Peak demand is a demand-side concept rivaling "peak oil." While the latter theory states that fossil fuel output will peak before declining due to falling extraction rates and reserve depletion, peak demand refers to demand, and thus output, declining as new technologies, electric vehicles and green energy make fossil fuel obsolete even before its depletion.
