Global Energy Demand and Supply Trends

A growing need for energy

Energy powers much more than lights and electrical appliances. It is also needed to heat buildings, operate factory machinery, produce food and move people and goods. Energy demand is the amount required for these activities; energy supply is the energy made available to meet that demand.

Over the past 100 years, global energy demand has increased rapidly. Energy use has grown, while the range of sources supplying it has widened. These changes are linked to human intervention: population growth, increased wealth and technological advances have changed both how much energy people need and how they obtain it.

Population growth increases total demand

A larger world population means more people need homes, food and transport. Even if each person used the same amount of energy as before, adding more people would increase total demand.

The effects also extend beyond households. Producing more food can involve more intensive farming, using powered machinery, lighting and heating. As countries develop and urbanise, growing towns and cities also require energy for homes, businesses and services. Population growth therefore increases energy demand directly through people's everyday needs and indirectly through the activities that support them.

Greater wealth changes how people live and work

Energy demand also increases when people use more energy per person. As incomes rise, households can afford more appliances, such as refrigerators and televisions. More people can own cars or travel by air, increasing demand for transport fuels or electricity.

Economic development often involves industrialisation. Factories need energy to run machinery, provide lighting and produce heat. This means that greater wealth can increase household energy use at the same time as industrial growth increases demand from businesses.

Population and wealth can reinforce one another: a growing population with rising incomes means both more energy users and greater energy use by many of those users.

Technology affects both demand and supply

Technological advances create more devices and activities that depend on energy. The spread of electrical appliances, for example, increases the number of uses for electricity. Technology therefore helps explain why demand has grown rather than simply responding to that growth.

Technology also changes supply. Improvements can make energy resources easier or cheaper to obtain and use. Fracking, for example, can make oil and gas resources accessible that would otherwise be difficult to extract. Technologies for nuclear, wind and solar power have widened the range of energy sources available.

The important connection is that technology works on both sides: it creates new uses for energy while also providing new ways to supply it.

How the sources of supply have changed

The energy system of the early twentieth century was less varied than today's. Around 1900, approximately half of global energy came from coal and half from traditional biomass, such as wood, charcoal and crop waste. This provides a starting point for understanding the changes that followed.

During the twentieth century, the world increasingly used oil, natural gas and hydro-electric power alongside existing sources. Nuclear energy also became part of the global mix during that century. Modern wind and solar power began contributing in the 1980s, much later than coal, oil and gas.

These developments made global supply more diverse as energy use expanded. However, adding a new source did not mean that older sources immediately disappeared. Historically, major changes in the dominant energy sources have taken decades, sometimes a century.

The overall change is therefore not simply a switch from one fuel to another. It is a growth in energy use, supported by a broader range of supplies, as more people, greater wealth and new technologies increase the world's demand.