31 Mar 2017

Reading time 1 min

McKinsey Global Institute: How technology is reshaping supply and demand for natural resources

A report from the McKinsey Global Institute published week 8/2017, “Beyond the supercycle: How technology is reshaping resources,” estimates that renewables, primarily solar and wind, could jump from 4% of global power generation today to as much as 36% by 2035, reshaping global electricity markets in the process.

Technological advances are driving these developments. The rapid growth of renewables is part of a bigger trend of rising global energy productivity. Increased energy efficiency in residential, industrial and commercial buildings, lower demand for energy in transportation due to the rise of electric and autonomous vehicles and ride sharing as well as falling costs and greater penetration of renewables is transforming the way we consume energy.

As a result of these developments, we calculate that the growth of primary energy demand worldwide will slow and could even peak in 2025 if new technologies such as robotics, data analytics and the Internet of Things are adopted rapidly. Global demand for oil and coal will most likely peak and could decline over the next two decades.