LONDON: The world is on the brink of a new age of electricity with fossil fuel demand set to peak by the end of the decade, meaning surplus oil and gas supplies could drive investment into green energy, the International Energy Agency said on Wednesday.
But it also flagged a high level of uncertainty as conflicts embroil the oil and gas-producing Middle East and Russia and as countries representing half of global energy demand have elections in 2024.
“In the second half of this decade, the prospect of more ample – or even surplus – supplies of oil and natural gas, depending on how geopolitical tensions evolve, would move us into a very different energy world,” IEA Executive Director Fatih Birol said in a release alongside its annual report.
Surplus fossil fuel supplies would likely lead to lower prices and could enable countries to dedicate more resources to clean energy, moving the world into an “age of electricity,” Birol said.
In the nearer term, there is also the possibility of reduced supplies should the Middle East conflict disrupt oil flows.
The IEA said such conflicts highlighted the strain on the energy system and the need for investment to speed up the transition to “cleaner and more secure technologies.”
A record high level of clean energy came online globally last year, the IEA said, including more than 560 gigawatts of renewable power capacity. Around $2 trillion is expected to be invested in clean energy in 2024, almost double the amount invested in fossil fuels.
In its scenario based on current government policies, global oil demand peaks before 2030 at just less than 102 million barrels/day, and then falls back to 2023 levels of 99 mb/d by 2035, largely because of lower demand from the transport sector as electric vehicle use increases.
The report also lays out the likely impact on future oil prices if stricter environmental policies are implemented globally to combat climate change.
In the IEA’s current policies scenario, oil prices decline to $75 per barrel in 2050 from $82 per barrel in 2023.
That compares to $25 per barrel in 2050 should government actions fall in line with the goal of cutting energy sector emissions to net zero by then.
Although the report forecasts an increase in demand for liquefied natural gas of 145 billion cubic meters between 2023 and 2030, it said this would be outpaced by an increase in export capacity of around 270 bcm over the same period.
“The overhang in LNG capacity looks set to create a very competitive market at least until this is worked off, with prices in key importing regions averaging $6.5-8 per million British thermal units, or mmBtu, to 2035,” the report said.
Asian LNG prices, regarded as an international benchmark are currently around $13 mmBtu.
‘Age of electricity’ to follow looming fossil fuel peak, IEA says
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‘Age of electricity’ to follow looming fossil fuel peak, IEA says
- Global oil demand to peak before 2030 at less than 102 million barrels/day
- LNG demand growth to be outpaced by capacity growth to 2030
Industry leaders highlight Riyadh’s Metro, infrastructure as investment catalysts
RIYADH: Saudi Arabia’s capital, Riyadh, is experiencing a transformative phase in its real estate sector, with the construction market projected to reach approximately $100 billion in 2025, accompanied by an anticipated annual growth rate of 5.4 percent through 2029.
The Kingdom is simultaneously advancing its data center capacity at an accelerated pace, with an impressive 2.7 GW currently in the pipeline. This expansion underscores the critical role of strategic land and power planning in establishing national infrastructure as a cornerstone of economic growth.
These insights were shared by leading industry experts during JLL’s recent client event in Riyadh, which focused on the city’s macroeconomic landscape and emerging trends across office, residential, retail, hospitality, and pioneering sectors, including AI infrastructure and Transit-Oriented Development.
Saud Al-Sulaimani, Country Lead and Head of Capital Markets at JLL Saudi Arabia, commented: “Riyadh is positioned at the forefront of Saudi Arabia’s Vision 2030, offering unparalleled opportunities for both investors and developers. National priorities are continuously recalibrated to ensure strategic alignment of projects and foster deeper collaboration with the private sector.”
He added: “Recent regulatory developments, including the introduction of the White Land Tax and the rent freeze, are designed to stabilize the market and are expected to drive renewed focus on delivering premium-quality assets. This dynamic environment, coupled with evolving construction cost considerations in select segments, is fundamentally reshaping the market landscape while accelerating progress toward our national objectives.”
The event further underscored the transformative impact of infrastructure initiatives. Mireille Azzam Vidjen, Head of Consulting for the Middle East and Africa at JLL, highlighted Riyadh’s transit revolution. She detailed the Riyadh Metro, a $22.5 billion investment encompassing 176 kilometers, six lines, and 84 stations, providing extensive geographic coverage, with a depth of 9.8 km per 100 sq. km. This strategic development generates significant TOD opportunities, with properties in proximity potentially commanding a 20-30 percent premium. JLL emphasized the importance of implementing climate-responsive last-mile solutions to enhance mobility and accessibility, particularly given Riyadh’s extreme temperatures.
Gaurav Mathur, Head of Data Centers at JLL, emphasized the rapid expansion of the Kingdom’s AI infrastructure, signaling a critical area for technological investment and innovation.
Focusing on the construction sector, Maroun Deeb, Head of Projects and Development Services, KSA at JLL, explained that the industry is actively navigating complexities such as skilled labor availability, material costs, and supply chain dynamics.
He highlighted the adoption of Building Information Modeling as a key driver for enhancing operational efficiency and project delivery.
