Long-term development of the global energy sector under the influence of energy policies and technological progress

Abstract

The world energy sector is entering a period of transformation, defined by the emergence of a whole range of cost-effective technologies and the formation of new state priorities that can radically change the structure of energy use. The calculations of the development of world energy markets for the period up to 2040 were made using economic and mathematical optimization modeling based on the ERI RAS SCANER model complex, for two scenarios: Conservative (maintaining key benchmarks and regulatory measures within the framework of existing energy policies, as well as incremental development of technologies without major breakthroughs) and Energy Transition (assuming ambitious goals in the field of reducing emissions, as well as accelerated technology development). The results of calculations show that the growth rate of primary energy consumption will slow down significantly. Renewable energy sources (RES) will be able to provide up to 35–50% of electricity production and up to a quarter of the world’s energy consumption by 2040, while the share of fossil fuels will decline. Oil and coal will pass the peak of consumption before 2040. This will not only lead to a radical change in the price environment of energy markets, but also to a transformation of the way they are organized and regulated, as well as to a revision of business models of most energy companies.