Falling birth rates could curb global energy demand

Declining birth rates could alter global energy demand forecasts over the coming decades. An analysis by Wood Mackenzie indicates that slower demographic growth should be considered a structural risk for the sector.

The consultancy studied the low birth rate scenario included in the United Nations population projections. Under this hypothesis, the world population would peak at 8.9 billion people in 2053 and then decline to 7 billion by 2100.

This trajectory differs from the UN’s central projection, which anticipates a population of nearly 10 billion by 2060. Therefore, a downward revision would modify the energy consumption, economic growth, and investment models used by the industry.

Falling Birth Rates Bring Fertility Closer to Replacement Level

Firstly, Wood Mackenzie highlights that the global fertility rate fell from 2.6 births per woman in 2007 to 2.2 in 2025. This figure approaches the replacement level of 2.1 needed to maintain a stable population in the long term.

This trend is already visible in major economies. In 2025, China recorded a rate of 5.6 births per 1,000 inhabitants, its lowest in recent history. Furthermore, the country’s population decreased by 3.4 million people during the last year analyzed.

This decline left China with approximately 1.4 billion inhabitants, about 9.6 million below the demographic estimate made by the UN in 2024.

Peter Martin, Head of Economics at Wood Mackenzie, believes that these signals should be incorporated into the sector’s central scenarios. In his opinion, a smaller workforce would limit GDP growth and have direct effects on energy demand.

Primary Energy Consumption to Peak in 2035

On the other hand, Wood Mackenzie’s base scenario forecasts that global primary energy consumption will increase by 8% compared to current levels.

Primary energy includes the total use of oil, gas, coal, renewables, and other sources before their transformation into electricity or final fuels.

According to the projection, consumption would peak at 717 exajoules in 2035, then begin to decline to approximately 672 exajoules by 2060.

This change would be related to a combination of slower demographic growth, an aging population, and a shrinking workforce. These factors could limit economic expansion and moderate oil and gas demand.

However, the decline would not be uniform across all energy sources. Emerging economies still have extensive energy access needs and greater potential for consumption growth.

Electricity Demand to Maintain Upward Trajectory

In contrast, Wood Mackenzie forecasts that global electricity consumption will double by 2060.

Even under a weak demographic scenario, the world population would grow by approximately 700 million people during that period. Furthermore, rising incomes in Asia and Africa would sustain a significant portion of the new demand.

Likewise, the electrification of transport, industry, and buildings would increase electricity consumption. This process would be joined by the expansion of renewable energies and the growing use of artificial intelligence systems.

Data centers, industrial automation, and digital networks require large amounts of electricity. For this reason, declining birth rates could reduce aggregate energy consumption without preventing electricity demand from continuing to rise.

Automation to Increase Pressure on Critical Minerals

Additionally, a smaller workforce would increase the incentive to invest in automation. Companies could turn to robots, artificial intelligence, and electric processes to compensate for the lack of workers.

This shift would boost demand for copper, lithium, nickel, rare earths, and other critical minerals. These materials are necessary for manufacturing electricity grids, batteries, electric vehicles, renewable systems, and electronic equipment.

Prakash Sharma, Vice President of Energy Transition at Wood Mackenzie, argues that a smaller population would not eliminate pressure on these resources.

Electrification and artificial intelligence could accelerate the structural shift away from hydrocarbons. At the same time, they would create new investment needs in power generation, energy storage, and transmission networks.

Asia and Africa to Continue Driving Energy Consumption

Meanwhile, much of the demand growth would be concentrated in regions with unmet energy needs.

Millions of people in Asia and Africa still lack stable access to electricity, modern transportation, and clean fuels. Urbanization and rising incomes can increase per capita consumption even as birth rates decline.

Therefore, the demographic effect will depend on each market. Mature economies could see a clearer reduction in total demand, while emerging countries would maintain expansion linked to economic development.

The Energy Sector Must Review Its Long-Term Models

Finally, Wood Mackenzie warns that governments and companies must prepare their investments before demographic aging limits economic growth and fiscal capacity.

The next revision of the UN’s World Population Prospects could lead to changes in long-term energy models. Wood Mackenzie does not expect the organization to fully adopt the low birth rate scenario. Even so, any downward correction would have economic consequences.

A world population peaking earlier than expected would reduce some of the pressure on primary energy consumption. However, electrification, automation, and the energy transition would keep demand for electricity, infrastructure, and critical minerals high.

Source: Wood Mackenzie

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