The world is approaching a watershed moment as energy demand is set to plateau from 2030 driven by greater efficiency, according to a report by consultancy DNV GL.

The Energy Transition Outlook said that a “rapid decarbonisation” of the energy supply is underway with renewables set to make up almost half of the energy mix by 2050, although gas will become the biggest single source of energy.

The report also predicted that energy efficiency will improve faster than global economic growth due to the rapid electrification of the world’s energy system, leading to a plateau in energy demand from 2030.

Other findings include:

►Renewable energy sources will continue to rise, making up nearly half of global energy supply by 2050, cutting energy-related CO2 emissions in half by that time.

►Gas supply will peak in 2035, but will still be the biggest single source of energy by mid-century.

►Oil supply will flatten out in the period 2020 to 2028 and then fall significantly to be surpassed by gas in 2034.

‘Profound change’

“The profound change set out in our report has significant implications for both established and new energy companies.

Ultimately, it will be a willingness to innovate and a capability to move at speed that will determine who is able to remain competitive in this dramatically altered energy landscape,” said Remi Eriksen, Group President & CEO of DNV GL

The report predicts that global energy transition will occur without a significant increase in overall annual energy expenditure and on a straight comparison, the world’s energy will cost less than 3% of global GDP compared to the current level of 5%.

Solar PV and wind costs are set to decrease by 18% and 16% respectively per the doubling of capacity.

Although the oil and gas industry has responded impressively to the present lower price environment, renewables will improve cost performance at a much faster rate, benefitting from the ‘learning curve’ effect. Electric vehicles will achieve cost parity with internal combustion vehicles in 2022 and, by 2033, half of new light vehicle sales globally will be electric.

> Read more on the report here