Economics starts by saying that the resources possess scarcity and this leads to the solution of managing those resources in an efficient manner, so that it will be benefitted to any single entity in the society. This particular statement accounts partly for global energy because energy can be regarded as a resource for any country.
However energy resources are unevenly distributed and if all countries were to make do with their own resources, there would be even more energy poverty in the world than there is now.
Access to energy is a unique factor in the modern world where the energy demand keeps flying day-by-day. The conventional energy demand which found few decades back has ripped its way for current demand hikes and this has a lot of influence on globalization. According to the well-known index of globalization-KOF (Sri Lanka 51.81 in 2017), it is a process that removes national borders and integrates into economies, policies, and technologies which influence in energy demand and supply.
The world economy is expected to be almost double over the next 20 years, with growth averaging 3.4% per annum. The boom in Asian markets and production growth in many countries has paved its way for high energy demand. Much of the expected growth in the global economy is driven by emerging economies like China and India where they accounts for around half of the increase.
Future energy demand
On the other hand the world’s population is projected to increase by around 1.5 billion people to reach nearly 8.8 billion people by 2035. The projected gains in productivity leads to increasing global prosperity, with more than 2 billion people lifted from low income which contributes in more demand.
In this light any country is compelled to plan in meeting their future energy demand. In that sense two major areas are to look for. This includes the ways adopted for optimum management of existing energy resources and exploiting and investing new sources of energies. The immerging technological world trends that relate to energy to be considered in tracking new means and their suitability along with the impacts they create. For example the risk incorporated in nuclear power plants and the emissions of coal power plants has more effect than cutting down of production cost.
When speaking of oil as an energy resource an oligopoly market structure could be seen in the global scenario where the access retains in the hands of a few and the prices are determined by a collective cartel.
A formal agreement to collusion is called a cartel. Countries with access to their own oil reserves acts together to maximize their profits by restricting output collectively. Each firm then receives their respective shares of profits based on their share of the market. The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organisation which can be listed as an ideal example. In this regard economies of other countries are influenced by the determined price and output by OPEC.
Global oil demand is projected for an increase by around 15 million barrels per day (Mb/d), to reach 110 million barrels per day by 2035. OPEC is assumed to account for nearly 70% of global supply growth and Non-OPEC supply grows by just over 4 Mb/d by 2035 with growth from the US (4 Mb/d), Brazil (2 Mb/d), Russia (1 Mb/d) and Canada (0.5 Mb/d) largely offset by declines in high-cost. Transport accounts for almost two-thirds of the growth in overall demand.
Renewable energies
Coal and Nuclear power is used to meet the domestic and industrial demand of many countries. Growth in global coal demand seen slowing down sharply relative to the past (0.2% p.a. versus 2.7% p.a. over the past 20 years). Nevertheless global coal consumption is expected with a peak in the mid-2020s. Nuclear capacity in Europe declines as ageing plants are gradually decommissioned and there reported low amounts for new investment.
Expected EU nuclear power generation by 2035 will be 30% which is lower than in 2015. Japan is assumed to restart some of its reactors gradually over the first half of the year. Nuclear and hydro power generations are expected to grow steadily by 2.3% p.a. and 1.8% p.a. respectively, broadly maintaining their combined share within the power sector.
When looking at those trends the world attention focus more towards renewable energies as it gives more prospects.
Renewable accounts for 40% of the growth in power generation, causing their share of global power to increase from 7% in 2015 to nearly 20% by 2035.
China is the largest source of growth over the next 20 years, adding more renewable power than the EU and US combined. The strong growth in renewable energy is underpinned by the view that the competitiveness of both solar and wind power improves significantly.
The cost of solar power is expected to continue to fall, although the pace of that reduction slows, as the rapidly-declining PV module costs account for a decreasing share of the total installed solar costs.
In contrast, wind power costs are assumed to fall materially, reflecting the view that there is considerable scope to improve the performance of wind turbines in harvesting the wind. Assessing the competitive needs of renewable to take into account the costs of ensuring system stability as increasing amounts of intermittent energy are added.
Detailed analysis of these costs (which vary significantly across technologies and countries) indicate that they are likely to be relatively low for the levels of penetration projected out to 2035.
Some energy efficient countries are trying hard to ensure that they can save as much money on energy, decrease as much possible energy used and their effect on the environment. Some countries have set their goals to becoming more energy efficient. Germany has been ranked the most energy efficient in the world.
Both top–down and bottom–up energy policy models seen developed at addressing various policies and planning concerns in developed countries. These models provide a good starting point for analyzing issues in modern industries of developing countries where improvement in operations, impact of technology mix, and effects of certain aspects taken into consideration.
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