BAKU, Azerbaijan, June 20. Globally, the share of natural gas in total generation is expected to decrease marginally, from 22.4 percent in 2021 to 21.9 percent in 2031, as an expanding role for gas among emerging markets (EM) (rising from 18 percent to 19.2 percent) is offset by a declining role among developed markets (DM) (falling from 29.8 percent to 27.1 percent), Trend reports with reference to Fitch Solutions.
“Nevertheless, the power sector’s overall demand for gas will grow robustly, reflecting broader energy demand growth, increasing by 1,738TWh (27.1 percent) globally over the 10-year forecast period: 333TWh (11.1 percent) among DMs and 1,309TWh (42.9 percent) among Ems,” reads the report released by Fitch Solutions.
The report reveals that every region is set to see gas generation rise in volume terms, although growth rates vary markedly.
“Asia-Pacific is the clear outperformer, with gas generation forecast to increase by 898TWh, or 62 percent, over 2022-2031. Growth rates are also robust in the Middle East and North Africa (37.2 percent), Latin America (30 percent) and Sub-Saharan Africa (26.7%), although growth is occurring from a very low base in the latter region. The drivers vary by region and market, but common threads include the improving efficiency of gas-fired power plants, ongoing decarbonization efforts and attempts to diversify the power supply away from alternatives such as hydropower, coal and oil. Although the LNG-to-power markets remains nascent, it shows a lot of potential worldwide, in particular in markets lacking adequate domestic gas supplies and where the options for pipeline gas are limited,” the company said.
Fitch Solutions analysts point out that the project pipeline is heavily skewed towards emerging markets in Asia-Pacific, Latin America and the Caribbean and, to a lesser extent, Sub-Saharan Africa. In APAC, some of the strongest growth prospects lie in South East Asia, in markets including Vietnam, the Philippines, Indonesia and Myanmar.
“In general, natural gas already plays a significant role in the power sector, but domestic gas supply constraints are increasing the reliance on imports, with LNG generally offering the most feasible import alternative. LNG-to-power projects are gaining particular traction in the region, as they help to meet fast-rising energy demand, while curbing emissions growth.”
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