ELECTRICITY MARKETS AND POLICY
Meeting Future Electricity Needs
Peter R. Hartley CES Lead, Electricity
Energy Demand and Electrification All energy demand projections forecast continuing global growth. This largely stems from the expectation that more high population developing countries will begin to grow. There is a close relationship between per capita energy demand and per capita income because abundant supply of high-quality energy is indispensable to a modern lifestyle.1 The modernization of agriculture usually begins the process, releasing large amounts of labor to work in the industrial and commercial sectors. Human and animal labor is displaced by machinery that requires energy. Historically, this has been fossil fuels. The production of fertilizers to support expanded agricultural productivity also requires fossil fuels. As people move to cities, the construction of urban and transportation infrastructure, modern housing, and the expansion of manufacturing, further increase the demand for energy. Until recently, energy demand projections also forecast declining, stagnating, or at most slowly growing, energy demand in the most developed economies. At later stages of economic growth services tend to grow faster than other sectors of the economy, and these have traditionally been much less energy-intensive than the manufacturing and infrastructure sectors. Many energy-intensive industries that are also labor intensive also relocate from the developed to the high population developing economies. The spread of new, more energy-efficient technology also tends to reduce the demand for energy despite the potential for rebound effects. Population growth in the developed economies has also stagnated.
Energy Insights 2025
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