Development and advancement in solar generation, batteries and EVs is persistent and fast. Under present circumstances, cost and performance improvements aren’t sufficient to convince consumers to easily give up what they have now in favor of new carbon-free alternatives.
Technology development won’t stall and it will be there once governments offer more support for energy transition, but it will come with some bumps on the road. Policies to hinder climate change advance, but political uncertainty and budget pressures keep preventing a full commitment to the goals of the Paris Agreement.
Also, on the road to arresting climate change, technology and policy aren’t the only ones that matter – consumers lead the way as well. They want EVs and renewable energy but aren’t willing to pay to replace what they already have. Consumers are slow to adapt, and drivers are inching their way to becoming more comfortable with EV range and charging times.
Things are beginning to shift and alternative energy is becoming competitive and/or superior to fossil fuels. It’s simply a matter of time until consumers become accepting of the new technology as they learn more about hydrogen sulfide removal and all the environmental benefits. And when they start purchasing it, the energy transition will happen.
The impact of economic growth
Unlike in developed countries, oil and gas demand is much more sensitive to economic growth in developing countries where it actually works against decarbonization. However, they can still work on minimizing their environmental impact by making use of high-quality equipment available at OFMP and similar well-supplied marketplaces. In the recent past, countries such as India and China have been more coal-dependent and less natural gas-dependent whereas countries in richer regions whose energy needs are replete are much more accepting of costly alternatives and less innovative technologies.
The coal and nuclear factor
As recent history shows, coal-fired generation has been decreasing by an average of 1% per year globally. But, this phenomenon is very uneven geographically. Coal consumption has dropped by 5% per year in Europe and North America, gone up by 5% per year in India and has been stable in China. However, from the perspective of climate change, as the Paris Agreement states, the goals call for a sustained 5% decrease in coal consumption until it’s eliminated completely.
As for nuclear power, experts project 2% growth per year. In reality, it was a lower growth than that, but a shift toward decarbonization at any speed will require nuclear power to hold its ground on the market.
Internal combustion engine fuel efficiency
As the long-running trend of internal combustion engine vehicles has proven better for fuel efficiency, it’s estimated there will be 1% annual improvement. It may be slower than it could be, but it’ll continue to improve steadily. Regardless of the environmental benefits of more efficient cars, the policy environment will continue to focus on vehicle electrification. Efficiency improvement needs funding so it’s more probable that investment will move toward developing innovative technologies rather than improving existing ones.
Consumer acceptance of EVs
EVs are steadily becoming both cost- and performance-competitive, but consumers don’t always opt for what is considered the best or cheapest alternative.
Although the Paris Agreement goals plan 100% market share by 2035, in reality, it will take longer to defeat consumer resistance to essentially different driving and fueling experience. And historically, speaking differently has always taken a certain period of time. Currently, EVs claim a little less than 40% market share, such a number is historically consistent with the acceptance of other innovative alternative technologies, such as the color TV.
The transition to renewable power
In projection models, what is measured is the speed of transition to renewables and to meet the goals of the Paris Agreement, the renewable share should be larger than 100%. Essentially, gas generation needs to be abandoned completely and replaced by renewables. Currently, it’s about 50/50.
The impact on oil and gas demand
There are numerous estimates trying to pinpoint the moment when oil demand will peak and how natural gas demand will rise. In accordance with the Paris Agreement, oil demand is expected to peak within the next 5 years, and natural gas would rise steadily but slowly for the next 25 years before reaching the peak in the first half of the 21st century and then decreasing to approximately the level where it is presently.
The road to clean, decarbonized energy is surely going to be a long one. The present energy mix is keeping the consumers in OECD countries satisfied and brings steady profit to the industry. However, the transition is possible but it will require consistent, steady changes that demonstrate well-established patterns of commercial and consumer behavior. No one knows how it will turn out, but it is certainly a possibility.