IEA (2019), Global Energy & CO2 Status Report 2019, IEA, Paris https://www.iea.org/reports/global-energy-co2-status-report-2019
Natural gas consumption grew by an estimated 4.6% in 2018, its largest increase since 2010 when gas demand bounced back from the global financial crisis. This second consecutive year of strong growth, following a 3% rise in 2017, was driven by growing energy demand and substitution from coal. The switch from coal to gas accounted for over one-fifth of the rise in gas demand. The United States led the growth followed by China.
Natural gas consumption worldwide grew by an estimated 4.6% in 2018, or 170 bcm, its strongest increase since 2010 when gas demand was rebounding from the 2008 global financial crisis. This second consecutive year of strong growth (after a 3% gain in 2017) was nearly three times the average growth of 1.5% over the previous five years.
The United States and China together accounted for 70% of the global growth, which was driven by a strong global economy and by substitution from coal. The switch from coal to gas was responsible for nearly 40 bcm of the increase in gas, more than one-fifth of the total extra demand.
The United States was the single largest driver of higher demand, with a gain of 80 bcm, up 10.5% from the previous year – its highest increase since the early 1950s. This higher consumption, the equivalent of the United Kingdom’s annual consumption, absorbed the majority of the growth in domestic gas production, which also hit record levels in 2018.
Such historic demand growth was mainly driven by power generation and buildings. A colder winter and hotter summer than average was responsible for around half of the extra gas demand in both sectors. The ongoing switch from coal to gas in power generation also contributed strongly to the growth, adding 18 bcm to gas demand. The share of gas in power generation hit an all-time record of 34%.
Gas demand in China increased by almost 18%, or 42 bcm, the fastest growth rate since the introduction of its 13th Five-Year Plan (2016-2020) and its more ambitious promotion of the use of natural gas relative to previous Plans. Gas now accounts for 8% of primary demand in China, double its share at the start of the decade.
The country became the world’s largest natural gas importer in 2018, ahead of Japan, and was the second-largest contributor in volume to global demand growth after the United States. This results from the country’s policy framework in favour of cleaner energies (known as the “Three- Year Action Plan for Winning the Blue Sky War”) and, in particular, by restricting the use of coal boilers for industrial and residential use. Across all sectors, the switch from coal to gas contributed 17 bcm to demand growth.
In the Asia-Pacific region, natural gas demand was also pushed by growing industry and power generation needs in South Asia as well as by nuclear reactor shutdowns in South Korea.
In the Middle Eastern and North African oil and gas producing countries, reducing oil burn for power generation through the development of natural gas-fired combined cycles contributed to the global gas demand trend. Egypt, which achieved self-sufficiency in its gas supply in late 2018, inaugurated the world’s largest combined cycle gas-fired power plant, with a capacity of 14.4 GW. In Iran, the region’s largest natural gas consumer, consumption growth is driven by power generation growth and the phasing out of fuel oil burn.
After several years of decline, consumption rose in Russia for a third consecutive year. The increase in gas sales was driven mainly by power generation as the use of coal for power decreased slightly.
Europe experienced a decline in natural gas consumption in 2018 after two years of growth. This is partly due to the temperature sensitivity of gas demand, with demand for space heating reduced by a mild fourth quarter (in spite of cold snaps over the first quarter).
Additionally, 2018 saw lower gas use for power generation, especially in some of the largest consumers such as Germany, Italy, Spain, Turkey and the United Kingdom. Despite lower demand, the combination of declining domestic production and urge to replenish storage after massive withdrawal over the first months contributed to a record of over 200 bcm of imports from Russia.