Energy Poverty, Energy Affordability, and Demand Modelling

Summary

Energy poverty remains a critical structural constraint on global oil and gas demand growth, with 730 million people worldwide lacking electricity access as of 2024 declining by only 11 million from 2023, a pace slower than pre-pandemic levels . Sub-Saharan Africa accounts for 80% of the global access deficit, where population growth continues to outpace electrification despite record solar PV imports and grid expansion.
From a demand modelling perspective, developing economies exhibit income elasticities of 1.2–1.9 for total energy demand significantly higher than OECD ranges of 0.8–1.1, indicating that GDP growth in emerging markets drives disproportionately higher energy consumption. OPEC's latest World Oil Outlook projects non-OECD oil demand to increase by 26.1 mboe/d by 2050, with Africa contributing 4.1 mboe/d of incremental demand. However, affordability constraints persist: household energy bills in emerging markets are projected to rise 80% by 2050, outpacing disposable income growth.