The various decarbonization pathways and scenarios likely underestimate the rate at which global energy consumption is increasing, which could lead to a natural gas supply gap by the end of the decade, the Switzerland-based industry organization International Gas Union (IGU) said on Tuesday in its Global Gas Report 2024.
If global demand for natural gas continues to rise without additional production increases as it has over the past four years, a global supply deficit of 22 percent is to be expected by 2030, the IGU’s annual report said.
“If demand continues to rise, the deficit will become even more significant. This underlines the urgent need to increase investment,” the industry association said.
It also warned that the decarbonisation scenarios published by various agencies on which policymakers rely in their decisions may not have fully taken into account the recent increase in data centre energy consumption and cooling.
“These scenarios are likely to underestimate the actual rate of demand growth, putting immediate pressure on planners to ensure sufficient supply to meet demand,” the IGU said.
This “significant gap between actual consumption patterns and scenario assumptions,” according to the group, underlines the need for a realistic planning approach to address the scalability, reliability and affordability requirements of changing consumption patterns.
Global gas demand rose 1.5 percent last year compared to 2022, and this year demand is expected to rise another 2.1 percent thanks to strong demand growth in Asia.
The report also shows that “even the comparatively less ambitious climate and energy consumption scenarios are unlikely to achieve the 2030 energy targets,” the IGU said.
Natural gas plays a key role in solving the so-called energy trilemma – sustainability, security and affordability, says the gas industry group.
“Looking ahead, the potential supply and investment gap in gas and other low-carbon energy sources requires immediate attention,” the report says.
“It is critical to align scenario development with actual forecasts to avoid misalignment and ensure that energy supply keeps pace with evolving demand.”
By Charles Kennedy for Oilprice.com
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