Fossil fuel demand growth could peak by 2020, new research suggests

New research has shown that fossil fuel growth may come to a grinding halt as soon as 2020, as price of electric cars and solar power continue to fall.

The report published by the Grantham Institute at Imperial College London and supported by the Carbon Tracker Initiative Fund found that renewables such as solar power could take as much as 10% in market share from the likes of oil and gas within that time frame.

According to the study, major energy companies are vastly underestimating their low-carbon competitors in their forecasts for continued growth.

Electric vehicles, while still not affordable for the average citizen in the UK, are becoming more and more available in the US to a wider consumer base.

One of the senior researchers for the project, Luke Sussams, said that solar power and electric vehicles are "game-changers" in terms of the energy industry.

"Electric vehicles and solar power are game-changers that the fossil fuel industry consistently underestimates," Sussma said. "Further innovation could make our scenarios look conservative in five years’ time, in which case the demand misread by companies will have been amplified even more."

The report noted that the price of solar energy has decreased by as much as 85% in the last seven years, and could realistically supply 23% of world energy production by 2040.

Head of research at Carbon Tracker James Leaton added that there are "a number of low-carbon technologies about to achieve critical mass decades before some companies expect."

Citigroup affirmed the view that non-traditional energy sources should not be underestimated, pointing towards a possible further decline in oil prices.

"Despite recent agreements, longer-term OPEC market power has been severely limited by the rise of short-cycle shale supply," the firm's research note said. "The key message is: don't underestimate the growth potential of shale and other unconventionals, and also don't overestimate the acceleration of decline rates."