Power Your Movement For Less
Gas prices have been rising globally, while electricity prices have been dropping.
According to the Energy Information Administration (EIA), Brent crude oil’s nominal price is predicted to rise to $67/b (in 2021 dollars) by 2025. By 2030, world demand is seen driving Brent prices to $79/b. By 2040, prices are projected to be $84/b. By then, the cheap oil sources will have been exhausted, making it more expensive to extract oil. By 2050, oil prices could be $90/b.
The electrification of the transportation sector may cause a reduction in demand for gas, which could stabilize the price for a little while. However, this will not last long as the disappearance of these demand sources will eliminate the biggest consumer, leading to a lot of big oil and gas exiting the markets and reducing the offer at the same cadence or faster even.
On the other hand, the adoption of renewable technologies is becoming more prevalent, and the price of electricity is expected to continue to fall. This combined with new advances in the field will make it cheaper to generate electricity, bringing down the price even more. According to Statista, the global household electricity prices in 2023 vary widely across the world and sometimes even within a country itself, depending on factors like infrastructure, geography, and politically determined taxes and levies. For instance, Italy, the United Kingdom, and Ireland had some of the highest household electricity prices worldwide, as of March 2023. At the time, Italian households were charged around 0.56 U.S. dollars per kilowatt-hour, while in the UK the price stood at 0.46 U.S. dollars per kilowatt-hour. By comparison, in France and the United States, residents paid almost three times less.
In conclusion, the price of gas is expected to continue to rise over the next decade, while the price of electricity is expected to continue to fall. The adoption of renewable technologies and new advances in the field will make it cheaper to generate electricity, bringing down the price even more. However, the price of electricity varies widely across the world and sometimes even within a country itself, depending on factors like infrastructure, geography, and politically determined taxes and levies.
Transitioning to electric-powered transportation can help us avoid any instability in the oil market, as demand and regulation continue to change in the coming years. Furthermore, this switch is in alignment with the direction the world is headed in terms of powering transportation. Renewable energy is set to take off in Africa over the next decade, resulting in a faster decline in electricity prices than other regions.