Mexico: Energy in Transition

Wednesday, June 27th 2019 8:00 A.M.
At Espacio Virreyes.

Key messages - Global perspective

Global primary energy demand plateaus after 2035 despite strong population expansion and economic growth

Energy intensity falls as service industries take up a larger share of the global economy and efficiency increases.

Fall in energy intensity offsets the effects of a growing high-income population.

Electricity consumption doubles until 2050, while renewables are projected to make up >50% of generation by 2035

Energy intensity falls as service industries take up a larger share of the global economy and efficiency increases.

Fall in energy intensity offsets the effects of a growing high-income population.

Gas continues to grow its share of global energy demand – the only fossil fuel to do so and then plateaus after 2035. Further gas capacity additions limited due to the increasing competitiveness of renewables.

Oil demand growth slows down substantially, with a projected peak in the early 2030s

Oil demand growth projected to slow, with strongest declines in demand happening in power and road transport

Peak oil reached in the early 2030s at 108 MMb/d, but even in an accelerated transition scenario there is a need for new investment in oil production.

Carbon emissions are projected to decline due to decreasing coal demand, yet a 2-degree pathway remains far away

Global carbon emissions peak in 2024 and fall by ~20% by 2050, primarily driven by a reduction in coal emissions.
However, to reach a 1.5-degree scenario, zero-carbon fuel alternatives would need to be prevalent in all industries.

What are other players doing?

To capture opportunities and mitigate risks associated with key trends, oil and gas players are:

- Restructuring their core portfolio to center on gas and lower-risk projects

- Decarbonizing existing operations, focusing on efficiency and use of renewables in their operations

- Diversifying portfolio into new businesses to increase exposure new technologies