Uncertain projected economic conditions and growth patterns in China, India, and Africa dominated the US Energy Information Administration’s 2018 International Energy Outlook when it was released on July 24.
“How these regions develop economically is likely to have important implications for global energy markets because of increased demand from the production and provision of goods and services,” its executive summary said. “In addition, the way these countries develop economically will affect their industrial mixes, and, as a result, their energy consumption,” the summary said, adding that these factors also may affect the US as it plays a larger energy exporting role.
The 2018 IEO’s side cases focused on faster economic growth and different development patterns for the three regions. For China, the economy was assumed to grow at an average 5.7%/year from 2015 to 2040 in the two high-growth cases. But one case assumed China will move from investment-led and export-led to a more consumption-led growth pattern, while the other assumed the transition will not occur.
For India, the economy was assumed to grow at an average 7.1%/year from 2015 to 2040 across three high-growth cases, while varying the magnitude of the investment-led, consumption-led, or export-led growth pattern compared with the 2018 IEO’s reference case. For Africa, the high-growth case examined the effect that average economic growth of 5%/year from 2015 to 2040 would have on that continent’s energy consumption.
Key findings from these side cases included:
• Faster economic growth in China increasing energy use, but the magnitude and rate will depend on how quickly the country changes to a more personal consumption-based economy. In a no-transition case, delivered energy consumption would increase by 25% relative to the IEO’s reference case in 2040, compared with a 20% increase in the fast-transition-to-services case.
• Across all China cases, the country would remain the world’s largest producer of energy-intensive goods by far in 2040.
• India was projected to have the world’s largest population and fastest-growing economy over the projection period under all three of its cases. However, its total energy use and energy use per capita was expected to remain below China, the US, and other industrialized countries over the next 2 decades.
• India’s industrial sector remained the largest energy-consuming end-use sector through 2040 across all the country’s 2018 IEO side cases.
• Higher growth in Africa could lead to expanded manufacturing and increased industrial energy use because of possible regional competitive advantages. Higher assumed economic growth over the forecast period may make African energy consumption per capita in 2040 about 30% higher than in the IEO’s reference case, but still lower than in India, Brazil, and other emerging economies.