Here’s the forecast by the International Energy Agency for fossil fuels, including oil, gas and coal for Southeast Asia upto 2040.
On Tuesday, the International Energy Agency forecast that the demand for crude oil in Southeast Asian is likely to grow until at least 2040 since emerging economies will need to rely on fossil fuels to transport their rapidly growing populations.
As a result, usage of oil is set to expand from 4.7 million of barrels per day (bpd) to around 6.6 million bpd by 2040.
As per the agency’s report, the number of vehicles on the road is likely to increase by two-thirds to around 62 million.
The report, launched at the Singapore International Energy Week, comes in the wake of a global push to replace combustible engines in vehicles with electric-powered ones to fight climate change.
The reduced dependency on fossil fuels has raised concerns in the oil industry that international oil demand could peak in the next 10-20 years.
The IEA’s forecast, in contrast to the global trend of preferring green energy sources, states that oil will continue to meet 90% of transport-related demand in Southeast Asia.
“In 2040, there are about 4 million electric cars in a total passenger vehicle stock of 62 million, but electricity accounts for only 1 percent of transport energy demand,” reads the IEA report.
Along with oil, the demand for coal, is also forecast to fuel growth in southeast Asia’s twin power and transport sector, with the region’s energy demand expected to rise by 60% by 2040 from their current levels.
With rising income levels, consumers are likely to buy more electrical appliances, including air conditioners, said the IEA, as a result the regions will need to generate more power, the bulk of which will come coal and oil.
Power generation capacity in the region is likely to rise by to 565 gigawatts (GW) in 2040, from 240 GW today, with coal and renewables accounting for almost 70% of new capacity.
Coal is likely to account for nearly 40% of the mix in the increase of this new capacity and is likely to overtake gas in the electricity mix, said the IEA.
Although electricity generated by natural gas-fired plants is set to rise by 60%, its share in the electricity mix however is set to drop to 28%, by 2040 from its current 43%, said IEA.
Southeast Asia is likely to become the key driver for global energy demand, as economies in the region triple their current size and populations growth rises by a fifth.
This is likely to provide oil producing countries a win-win scenario since net energy import bills are likely to rise with declining oil oil production in the region, which will raise concerns over energy security.
As a result, Southeast Asia will have to shell out more than $300 billion in 2040 for net energy imports, equivalent to nearly 4% of the region’s total gross domestic product (GDP), said the IEA.
The region’s net oil imports of 6.9 million barrels per day in 2040 will require $280 billion in annual outlay by 2040, making oil the largest chunk of projected imports, said the IEA.
“Apart from the mounting import bill, the region’s increasing dependence on imported energy raises significant energy security concerns,” said the agency.