The energy market in the world is at the pace of revolution fueled up by innovation triggered by decarbonization. History says, with increase disposable income, the standard of living, consumption of energy has been increased drastically. Despite the fact that how many years exhausted in making the whole world fully supplied with energy identified as countless. From medieval times to the 20th centuries reforms in energy supply have met mixed success in achieving greater demand-supply participation. However, in the past 8 years, participation of household and small businesses remains minimal. In 2017, a new market aggregate was introduced to provide FCAS services.
As per the IEA, 2020 report, global energy demand is expected to increase by 4.5% in 2020 supported by rebounding economic activities. A number of factors influence the global energy demand growth of renewable energy nuclear power in the tight spot of non-renewable sources application. Recently demand from non-renewable resources has decreased by 3% among them coal was the hardest hit energy accounted 4.4% drop known as the largest decline made in history. A regressive study is followed in this article to determine the potential energy marketing economic potential.
The energy market contributes to economic growth in two ways- first energy is creating jobs and value by extracting energy and transforming the goods and service throughout the economy secondly underpin rest of the economies nearly referred as input of all goods and services. For instance, in 2009, the energy industry is accounted 4 % GDP of the USA (Yeager and Sharma, 2019). Some countries who are heavenly dependent on the energy export whose GDP is even higher.
It’s been a long axiomatic that energy and economic growth is interlinked that means if energy demand increases, economic growth will be increased automatically. That’ been a case since the dawn of industrialization, But in the latest study, demand of the 55 types of energy from the 30 countries reflecting decoupling of energy demand and economic growth. In past decades energy demand and economic growth pronounced even bit higher since there is no region of the world that will be energy-hungry. Indeed energy landscape is poised to be a foundational change from now and 2050.
Energy Industrialization- A Slow Pace
In the past two centuries, energy tracked with long economic growth and the economy has to lock it off to make the value it creates economies viable. At the same time, wealth creation depended on the burning times. During 18oo, energy come from the fallen biomass, like people burn the fallen tree, but at the end of the 18th century when the USA and Europe begun industrialized creation of enormous energy points up from distinct sources. Like it is said by the assignment writer biomass is highly inefficient as fuel because the entire energy embodied was lost at the time of burning. Before industrialization, energy loss could be bearable but the resulting wealth was not enormous. Similarly, when energy has been converted into electricity, its demand will increase by 1% since 1950 (IREA, 2020).
In the 20th century, the demand for energy and economic growth both accelerated in different ways. GDP per capita in 1950 was twice that of 1900 in the USA and from that level of wealth creation, burning other forms of biomass would not be sufficient.
Moving onwards it has been seen in many cases, living standards of people in the west and other advanced economies rising. Those dynamics continued to be expanded as china helped the global GDP rise by 3.7% by the year 2020(IEA, 2020).
Accessing Economic Impact Of Increased Global Energy Demand
Energy is input to nearly every product and service also underpins the activities at each economic level. In this sense, the power sector continues to attract the majority of new investments. The relationship between the energy sector and the economy questioned a transformed energy system. As we have discussed energy sector contributing to GDP and employment for instance it predicts the national dialogue.
However, when energy grows, proportionate investment in the energy sector will also get uplifted. In order to analyze the potential benefits the energy sector serves, investors identified to invest large sums of capital towards renewable energy development. Many assignment makers believed investment in the renewable sector has to be increased substantially.
As per IRENA. Org report investment in global renewable sources at REmap Case should be lied in between USD 500 billion to USD 750 billion till 2030. IRENA’s REthinking Energy: Renewable Energy and Climate Change reported investment in power sector reach to at least USD 400 billion in 2020 further needed to extend up to USD 600 billion in 2030. As the report estimated this projection in global power tends to support the investment by 1.8% (Price and Keppo, 2017). Meanwhile, when energy demand meets renewable targets, it would become easier to configure economic benefits for the environment as well. However, the persistent question still produces scepticism whether the potential investment yields satisfactory outcomes or not. Many experts believed the realizing observation of positive macroeconomic factors is equally important in eliminating the investment gap. Current trends show the investment will be likely to be the same as in 2030. Public funding stakeholder investment will behave the same as catalyst fueling investment needs of renewable sources.
How Economic Changes Affects The Global Energy Sector
The investment needs in the global energy sector not only fell when GDP rises even it can be traced at the sectoral level. The general deployment of renewable sources is likely to influence the other sectors but the benefits incur will be largely enjoyed by one produces goods and services at the global level. Few sectors like engineering, construction and manufacturing would likely be impacted largest as these sectors are completely dependent on volatile demand of goods and services investment. In fact, these sectors barely recovered from the financial crisis negatively being affected with covid invasion. If a large amount of investment is done in this sector, the economic output tends to be increased by 1.3% ( Guo et.al, 2019).
The main energy drivers of the majority of Middle East countries are petroleum, coal, natural gases and renewable sources. Globally petroleum and other fuels are including biodiesel and biofuels most prevalent of energy being utilized at a massive level.
No doubt the energy industry is an engine of growth that serves huge input for goods and services produced, but how energy is utilized differ country to country. The energy sector in economics drives employment transforms and spread goods and services. Jobs are instrumental to achieve the maximum output from the energy sector beyond those core-wide societal goals influenced with economic wide productivity, poverty level, improved sustainability in post conflicts societies. At the global level, online assignment help experts said, the continuous drop of non-renewable sources and their prices have had a serious impact energy sector. Despite this, in many Arabian countries, experts noticed the growing renewable sources seeing as a bright side of employment. But the employment generated from the renewable sector varies greatly like Solar Photovoltaic provides generate more jobs in comparison to the windmill. Currently, it accounted for 4 million jobs across the globe as per the 2014 census.
World Energy OutLook
The energy sector is one of the largest capital consuming industries in the world. As per the 2011 world energy outlook., IEA, estimated US$ 38 trillion global energy investment will be needed to meet global energy demand in 2035. Also, the investment requirements per worker are higher than in any other sector. For instance sole in the USA, the investment requirement per worker is $ 176,000 in the past 10 years; meanwhile, the compensatory cost is US$101,000 per worker. Hence it can be said, energy sector companies invest at least 70% capital on the worker. Henceforth the flow of capital from the energy industry to at individual level creates additional jobs, increase GDP and tax revenues (Liko, Gentian. 2019).
Determining the impact of the supplier network on the energy sector is also crucial. Countries have energy handling skilled laborers retain benefits domestically. On the other side, the impact on those countries that could not produce skilled labor would be lower.
Looking beyond energy sector expansion, employment in the border energy sector will be increased in both cases whether huge investment takes place renewable sources or Fossil fuel get disseminate. As per the world outlook, employment in fossil fuel has been decreasing steadily with lowering demand, on the other side, nuclear energy remains stable.
A High Pattern Shift Of Global Share Into Renewable Energy
Globalization permits the exchange of goods and services at a wider range thereby act a key enabler for economic growth. The past two decades have eyewitness the increase in export in many developing countries including Middle East countries quadrupling 6.3 trillion in 1995 to USD 23.4 trillion in 2014(Brockway, 2019).
Consequently, the global GDP has increased by 30% in 2014. Assignment help experts of ArabEssay have noticed world fuels exports have increased than any other traded products. An annual growth accounted in these years accounted 12%. Measure in US dollars, energy export was eight times higher in 2014 than in 1995. Henceforth it can be said, in 2014. Global energy trade reported 17% of the whole GDP of the world. Currently, most of the countries are not fuel importers, some countries are exporters benefitted greatly. Countries like CHINA, India, Japan spend 7% of their GDP to import fuel. In this case, a miracle could be happened if these countries make a route towards implementing an ample segment of renewable energy sources.
These values in magnitude are larger enough when compared with public health expenditure. Global opportunities of focusing on installation of renewable sources definitely benefitting all the economies similar enhance the employment rate and meeting the global energy demand will become much easier.
Overall trade will be higher in 2030, than in today times. The analysis showed the impact of global dependency on renewable sources would be larger enough because every time it is assumed doubling the investment in the renewable sector and decreasing in non-renewable energy by 40 million $. The movement of global energy trade will be impacted largely by three factors defined below-
Reducing dependency on fossil fuels with varying impaction of fossil fuel exportation
The demand for goods and services has to be increased like investment in the renewable energy sector. The impact of demand for renewable energy will be resulted from growing or lowering GDP
Since the capital investment nature of energy is quite alluring, it is usually assumed GDP will be highly influenced by the expansion of the energy system. To know more about recent trends in global energy outlook, take instant assignment help from ArabEssay
Energy is life of economy or a crucial component nearly for all the goods and services manufacturing industry. To the best compilation of recent trends in energy outlook, this report concluded when energy grow, proportionate investment in the energy sector will get uplifted also In order to analyze the potential benefits the energy sector serves, investors identified to invest large sums of capital towards renewable energy development. It is also defined in this study Jobs are instrumental to achieve the maximum output from the energy sector beyond those core wide societal goals influenced with economic wide productivity, poverty level, improved sustainability in post conflicts societies. Meanwhile, when energy demand meets with renewable targets, it would become easier to configure economic benefits for the environment as well.
Brockway, P.E., Owen, A., Brand-Correa, L.I. and Hardt, L., 2019. Estimation of global final-stage energy-return-on-investment for fossil fuels with comparison to renewable energy sources. Nature Energy, 4(7), pp.612-621.
Liko, Gentian. 2019. Impacts of Energy Sector on Economy, Social and Political Landscape, and Sustainable Development. 10.13140/RG.2.2.12626.91847.
Iea.2020. Annual average growth rates of electricity demand in selected regions, 2001-2020. Available at- https://www.iea.org/data-and-statistics/charts/annual-average-growth-rates-of-electricity-demand-in-selected-regions-2001-2020
Price, J. and Keppo, I., 2017. Modelling to generate alternatives: A technique to explore uncertainty in energy-environment-economy models. Applied energy, 195, pp.356-369.
Yeager.K. Energy and Economy. Available at- https://iiasa.ac.at/web/home/research/Flagship-Projects/Global-Energy-Assessment/GEA_Chapter6_economy_hires.pdf
Trygested.C Sharma. N. 2019. The decoupling of GDP and energy growth: A CEO guide. Available at- https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/the-decoupling-of-gdp-and-energy-growth-a-ceo-guide#
World Economic Forum. 2020. Energy for Economic Growth. Available at- http://reports.weforum.org/energy-for-economic-growth-energy-vision-update-2012/
IRENA. 2020. RENEWABLE ENERGY BENEFITS: MEASURING THE ECONOMICS. Available ar- https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2016/IRENA_Measuring-the-Economics_2016.pdf
IEA.2020. Electricity. Available at- https://www.iea.org/reports/global-energy-review-2021/electricity
Guo, Z., Zhou, K., Zhang, C., Lu, X., Chen, W., & Yang, S. (2018). Residential electricity consumption behavior: Influencing factors, related theories and intervention strategies. Renewable and Sustainable Energy Reviews, 81, 399-412.