Wood Mackenzie: How Birth Rates Reshape Energy Transitions

Demographic shifts in global fertility rates could reshape energy consumption patterns and resource planning over the coming decades.

Wood Mackenzie has examined how declining birth rates might influence the sector's long-term forecasts, with implications spanning from grid infrastructure to critical mineral supply chains.

The analysis centres on the United Nations' low-birth-rate scenario. Under this model, global population would peak at 8.9 billion in 2053 before falling to seven3 billion by 2100.

This contrasts with the UN's central projection, which forecasts population rising to 10 billion by 2060. A high-birth-rate scenario sees numbers reaching 12.6 billion by century's end.

Population trends and energy models

The distinction between these pathways could have implications for how energy infrastructure and decarbonisation strategies are planned.

The divergence between scenarios widens significantly after mid-century, creating uncertainty for investments with multi-decade timeframes.

Infrastructure built today may need to serve vastly different population levels depending on which trajectory materialises.

According to Wood Mackenzie, recent demographic data shows population growth is slowing in key regions.

Global fertility stood at 2.6 births per woman in 2007 but had fallen to 2.2 by 2025, approaching the 2.1 replacement rate needed to maintain stable population levels.

The pace of this decline has surprised many demographers.

Fertility rates have dropped faster than anticipated across multiple continents, with declines recorded not only in developed economies but increasingly in middle-income nations as well.

This suggests the trend may be more persistent than earlier models assumed.

China has seen particularly pronounced changes.

The country's birth rate fell to 5.6 per 1,000 people in 2025, the lowest on record.

China's population contracted by 3.4 million last year, reaching 1.4 billion.

This sits 9.6 million below the UN's 2024 projection for the country.

The shortfall indicates that even recent forecasts may have underestimated the speed of demographic transition in the world's second-largest economy.

Peter Martin, Head of Economics at Wood Mackenzie, argues demographic trends should feature in core planning scenarios.

"Shrinking workforces mean slower GDP growth, with direct consequences for energy demand.

"This is not a tail risk.

"It belongs in the core scenario of every long-range model the industry relies on," he says.

Energy consumption projections

According to Wood Mackenzie, global primary energy consumption could rise by 8% from current levels under its base-case forecast.

Primary energy consumption measures total energy use across all sources before conversion into electricity or fuel.

The firm projects consumption peaking at 717 exajoules in 2035. 

Wood Mackenzie then forecasts consumption declining to 672 exajoules by 2060.

Electricity demand, however, is projected to double over the same period.

This divergence reflects the ongoing shift from direct fossil fuel combustion towards electrified end uses, a transition that continues regardless of demographic assumptions.

Even under the low-birth-rate scenario, global population would grow by around 700 million people by 2060.

Unmet energy needs across Asia and Africa, combined with rising incomes and continued rollout of renewables and AI, could mean many demand drivers remain intact regardless of fertility trends.

Billions of people still lack reliable access to modern energy services, creating baseline demand that persists across all population scenarios.

Critical minerals and electrification

A shrinking workforce could create greater incentive to invest in automation.

This in turn could push up demand for electricity and critical minerals even as demand for oil and gas cools.

Automation requires significant upfront capital investment but reduces ongoing labour costs, making it more attractive in economies facing workforce contraction.

Manufacturing, logistics and even energy infrastructure maintenance could see accelerated adoption of robotic systems and AI-driven processes.

Each of these technologies requires substantial electrical power and relies on materials such as copper, lithium and rare earth elements.

Prakash Sharma, Head of Energy Transition at Wood Mackenzie, says the implications for resources could be substantial.

"Electrification, renewables and AI adoption create unprecedented demand for those resources while accelerating the structural shift away from hydrocarbons," he says.

"The capital exists now.

"The question is whether governments move decisively enough to deploy it before the window narrows after 2060."

A revised UN World Population Prospects report is due in July 2026.

This could prompt renewed scrutiny of these projections across the sector.

Wood Mackenzie does not expect the UN to adopt the low-birth-rate scenario in full.

However, any downward revision could carry economic weight, given the pressure ageing populations place on GDP growth and public finances.

Governments may face difficult trade-offs between funding energy transition programmes and meeting rising healthcare and pension obligations.

Environmental implications of demographic change

Some in the sector see slowing fertility rates as potentially easing pressure on energy systems.

For years, energy companies have worked to keep pace with surging demand, particularly from data centres and electrification, straining grids and supply chains.

A plateau or decline in the demand curve could give planners time to build out capacity in a more considered way.

There could also be environmental implications.

Fewer people could in principle mean less resource consumption and lower aggregate emissions.

This has drawn interest from climate researchers as well as economists.

However, most experts caution against treating population decline as a route to decarbonisation.

Zeke Hausfather, a climatologist working at the Breakthrough Institute, has argued consumption patterns matter more than population size alone.

"Sometimes people try to use population as a way to let rich countries off the hook," he says, "whereas in reality, it's our consumption and our level of economic activity that drives emissions more than the number of people we have."

Emissions and consumption patterns

Other researchers have made similar observations using global data on income and emissions.

Ajit Niranjan, the Guardian's European Environment Correspondent, says that people in the richest countries emit around 50 times more than those in the poorest, with the fastest population growth concentrated in those lower-emitting nations.

A smaller population might blunt the growth curve but may not by itself solve the emissions problem.

It could complicate the economics of the energy transition by shrinking the workforce and tax base needed to fund it.

Whether falling fertility proves beneficial or problematic could depend less on the number of people the world ends up with.

It could depend more on what kind of energy system is built to serve them.

Policy choices made in the next decade will likely matter more than demographic projections for determining whether the transition succeeds.