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1 in 5 cars to be electric by mid-2030s, says WoodMac

Bnamericas Published: Thursday, August 10, 2017
1 in 5 cars to be electric by mid-2030s, says WoodMac

More than one in five vehicles will run on electric motors within 20 years as new technologies reshape global energy markets, according to a new study.

In a report by Wood Mackenzie and GTM Research, electric cars are seen displacing around 6.5M/b of oil demand, offsetting growth from other sectors such as petrochemicals.

It predicted a global population of 350mn electric cars by 2035, accounting for 21% of the total.

Dubbed Future of Renewables: A Radical Disruption, the report considers a "carbon-constrained scenario," which foresees a faster rate of progress for renewable power and storage technology than Wood Mackenzie's base case view, the company said.

"The carbon-constrained scenario describes consistent marginal change, rather than sudden revolution," Wood Mackenzie research director of global trends Paul McConnell said in a statement.

"But it is a transformational scenario nonetheless, because consistent marginal change will bring disruption to established markets long before a wholesale switch away from hydrocarbons occurs."

Such an outlook would prompt long-term double-digit growth for renewables, particularly wind and solar power, Wood Mackenzie said.

Together the sources will meet 30% of the world's electric power demand in 2035, according to the study, representing a seven-fold expansion of the renewables segment.

As a result, coal's contribution to global power use is projected to shrink by 30% while the need for nuclear and even natural gas-fired power plants is also seen diminishing.

"On a per-watt basis, the scenario forecasts a drop in solar costs by about 60% between 2015 and 2025, and by a further 20% by 2035," McConnell said.

"Wind costs will come down by about half in that 20 year period and [those of] energy storage technologies, needed to underpin intermittent generation, will fall by about 80%," he added.

The report comes as major oil companies bring forward their growth predictions for the electric vehicle market.

Last month, Royal Dutch Shell's CEO Ben Van Beurden said crude oil demand could peak by the end of the 2020s and revealed plans to buy an electric car.

And this week, Brazilian state-run energy giant Petrobras said oil consumption could hit an apex in 2025.

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