Consulting engineering and project implementation firm Hatch’s Global managing director of Energy, John Pearson, recently highlighted that approximately 1.4-billion people across the globe survive without electricity – 59% of which are located in Africa (according to the International Energy Agency).

With the global population estimated to grow by more than one billion people between 2010 and 2025, the lack of electricity is set to become one of the key drivers in the creation of what Pearson calls a ‘new energy reality’. Population growth, a changing and ever-expanding global economy, urbanisation, a lack of electricity, as well as a structural shift in commodity demand from Organisation for Economic Co-operation and Development (OECD) affiliated countries to non-OECD countries, have seen new energy source patterns emerge.

The demand for coal and oil is expected to drop in OECD countries, while it is anticipated to increase in China and other non-OECD countries. The demand for all other energy sources is expected to increase by between 40% and 50% from 2012 to 2035. Pearson points out that the increased demand from non-OECD countries is expected to be met by new supply from Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC countries alike from new sources such as bio-fuels and oil sands (the world’s third largest reserve).

Pearson points out that estimated shale gas technically recoverable resources for select basins in 32 countries is equally abundant to natural gas and should last for 136 years at 2009 consumption levels, while hydropower and wind power are expected to be the largest producers of electricity from the renewable energy sector by 2035.
The majority of investments in energy-supply infrastructure are expected to be in OECD countries and China, while significant investments are also expected in Latin America and Africa. Approximately US$38-trillion is expected to be invested in energy-supply infrastructure between 2011 and 2035.

Pearson points out that the modernisation of many African economies, as well as the social progress that comes with this modernisation, will result in an unprecedented energy demand increase by an average of 5.7% per annum from between 2011 and 2040. The corresponding generation capacity increase is 6% per year – a five-fold increase over the same time.

South Africa remains heavily dependent on coal, both in terms of power generation and primary energy supply. South Africa is the sixth largest holder of coal in the world with close to 31 billion tonnes of recoverable (anthracite and bituminous) coal reserves, a significant portion of the world’s total coal reserves.