Electricity generation to drive growth in natural gas demand through 2050: GECF


Electricity generation will be the main driver of natural gas demand growth, accounting for 42% of incremental gas demand volumes through 2050, according to the Gas Exporting Countries Forum (GECF).
This contrasts with the residential and commercial sector, which is expected to provide only 7% of total gas demand growth between 2020 and 2050, GECF said in its latest Global Gas Outlook 2050.
The power generation sector will be the main driver of growth thanks to the substantial increase in electricity demand as well as government policies and regulatory initiatives aimed at phasing out coal-fired capacity and nuclear power plants in some regions.
Additionally, with incremental additions of solar and wind capacity, the need for flexibility as a mainstay of electrical security will increase, and gas-fired power generation is expected to play an increasing role in helping to balance variable renewables and ensure the stability of electrical systems. Batteries and demand response will cover part of this role, but are unlikely to be able to offer long-term and seasonal storage.
In this context, dispatchable and low-emission generation capacities will become more central to ensure system flexibility and gas generation will remain the first choice.
Overall, between 2020 and 2050, gas demand in the power generation sector will increase by 755 billion m3 (or 55%) to reach 2.130 billion m3 by 2050, noted the GECF.
Regionally, Asia-Pacific and Africa will contribute the most to this growth, together accounting for more than 70% of the increase, although Latin America and the Middle East will also show considerable growth.
Europe will be the only region to experience a clear downward trend. However, gas in this sector will remain resilient over the next decade, filling some of the void left by the retirement of nuclear and coal-fired capacity, but gradually declining thereafter as the growth of renewables strengthens.
Global electricity production will more than double, from 26,460 TWh in 2020 to almost 54,500 TWh. At the same time, the electricity generation mix continues to shift towards low-carbon sources. The strong development of renewable energies will increase their share from 10% in 2020 to 46% by 2050, while the share of coal, the main fuel to lose ground, will drop from 35% to 13%.
The shares of hydropower and nuclear, despite rising production in absolute value, will also decline, although much less sharply, and will respectively provide almost 11% and 7% of the electricity production mix in 2050.
Gas-fired generation, which will cover about 16% of growing electricity needs over the forecast horizon, will maintain its current share in the generation mix at 24% until the early 2030s, and then decline to 20% from here 2050.
In terms of gas capacity additions, an expansion from 1,892 GW in 2020 to 3,170 GW by 2050 is expected, taking into account all commissionings and retirements over the forecast period, GECF said. .

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