According to a report by McKinsey Energy Insights (MEI), global energy demand will decouple from economic growth for the first time by 2035. The report highlights that global energy demand will plateau by 2035, as developed OECD countries transition away from fossil fuels to green sources of energy. It is predicted that the renewable generation will account for more than half of global power supply post-2035, with oil peaking in the early 2030s and natural gas beginning its decline after 2035. During this time, MEI predicts “strong” GDP and population growth, marking the first time ever that global energy demand and economic growth will be decoupled. Despite the predicted fall in energy-related emissions, a 2°C pathway by 2050 envisioned by the Paris Agreement will “stay out of reach” according to the report. The report notes that technologies such as hydrogen could have a key role to play in driving the world towards the 2°C pathway, but that market prices for the technology would have to drop below $3.5 per kg, much lower than today’s retail price of $13.99/kg.

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