Asia Projected to Drive 70 Percent of Global Energy Demand

Asia is projected to drive 70% of global energy demand growth through 2040, requiring $1 trillion annually in energy investments over the next 15 years, according to a report by McKinsey cited by OilPrice. The continent's energy demand is expected to reach 370 million terajoules, marking a 15% increase from prior forecasts due to data centers, industrial expansion, and cooling needs.

Fuel Mix and Coal Dominance

Coal remains the most dominant fuel in Asia's energy mix, accounting for about 47% of total primary energy and over 50% of electricity generation, reaching 67% in South Asia. While coal use is expected to slowly decline in China due to renewable energy growth, demand in India and Southeast Asia remains steady. Natural gas demand is projected to decelerate over the next 5 to 10 years before a long-term industrial rebound.

Renewables and Biofuels

McKinsey reported that roughly $300 billion in annual investments will be required for wind and solar infrastructure, primarily across India and Southeast Asia. Solar has overtaken gas as Asia's third-largest power source as capital and equipment costs decline. Additionally, biofuels could replace $90 billion to $100 billion in annual fuel imports by 2040, with India and Indonesia expanding blending mandates.

Key facts

• Asia will drive 70% of global energy demand growth through 2040.
• McKinsey reports Asia requires $1 trillion annually in energy investments over the next 15 years.
• Coal represents about 47% of Asia's total primary energy mix and over 50% of its electricity mix.
• Biofuels could replace $90 billion to $100 billion in fuel imports by 2040.