Urbanization is the Driver of Energy Consumption

The average global citizen consumes half the energy of a UK resident, who consumes half the energy of an American, who consumes two-thirds the energy of a typical Texan.

–Dr. Michael Webber, Power Trip (paraphrased)

Today, 55% of the global population lives in urban areas. The UN expects this number to increase to 68% by 2050. Across China, India, Africa, and Southeast Asia more than two billion people are expected to urbanize in the coming three decades. Projected linearly that maths out to 5 million people urbanizing per month. As Geoffrey West writes in Scale: “This will be by far the largest migration of human beings to have ever taken place on the planet and will very likely never be equaled in the future. The resulting challenges to the availability of energy and resources … are mind-boggling.”

Out of curiosity I plotted urbanization against global energy consumption by country per capita using two years of the most recent data available from the World Bank. The correlation is clear and striking: as nations become increasingly urban, their energy consumption increases approximately to the square of their urbanization.

That energy usage per capita scales with the square of urbanization would support West’s suggestion of an impending energy crisis. On the other hand, one might ask why economies of scale aren’t driving this in the other direction? Well, they are, sort of.

Comparing urbanization to domestic energy consumption across each of the 50 states we see that in America there is a distinct negative correlation, indicative of economies of scale. In other words: in a developed country, less energy per capita is used where the population is the more urbanized / concentrated.

So what can explain the opposite scaling behaviors of energy consumption observed domestically versus globally? It comes down to extreme subjectivity in how we define ‘rural’.

See below one of the top Google Image results for ‘Rural Texas’.

Image source

…and compare that to a top result for ‘Rural Africa’…

Image source

Once a nation is fully developed it makes sense that rural areas would use more energy per capita than urban areas. As people urbanize, the major drivers of energy consumption can be more easily bundled. For example, climate controlling 300 independent (rural) single-family homes uses more energy than climate controlling 300 (urban) units in a high rise.

Similar logic applies to transportation, albeit the effect is less pronounced in the US with our car culture and notoriously awful public transportation offerings in most metro areas.

By contrast, rural areas in the developing world tend to have limited access to energy. As of April 2019 over two thirds of Africa’s population do not have access to electricity at all.

In the coming decades I expect that the global energy market will continue to expand, driven largely by urbanization and growth in developing economies, whereas energy consumption per capita will flatline or even decline domestically and in other developed nations as we continue to see increasing economies of scale with regard to energy consumption.

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