Wood Mackenzie: Falling Birth Rates to Curb Energy Demand

New analysis from Wood Mackenzie suggests that falling fertility rates could pose a structural risk to long-term projections for global energy demand.

For its research, the firm looked at how the United Nations’ low-birth-rate scenario could affect the energy sector across the 21st century.

In this scenario – which is one of three total – the UN sees global population peaking at 8.9 billion in the year 2053. The projection then has population shrinking to seven billion by 2100.

That represents a significantly earlier and lower ceiling than the UN's current central projection, which has population rising to 10 billion by 2060. The high-birth-rate scenario, meanwhile, sees the population reaching 12.6 billion by the end of the 21st century.

The numbers behind the trend

Though the UN's birth rate scenarios are hypotheses based on different models, Wood Mackenzie notes that some recent demographic data shows that population growth is already slowing in key areas.

In 2007, global fertility stood at 2.6 births per woman. By 2025 that figure had fallen to 2.2, edging close to the 2.1 replacement rate required simply to hold a population steady.

The downturn in birth rates is most starkly apparent in China right now, where the birth rate fell to 5.6 per 1,000 people in 2025, the lowest ever recorded.

The country's population contracted by 3.4 million last year, leaving it at 1.4 billion, some 9.6 million below the UN's 2024 projection.

Peter Martin, Head of Economics at Wood Mackenzie, argues the energy sector needs to treat significant population decline as more than a distant possibility.

“Demographics dictate destiny,” he says. “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.”

What it means for energy consumption

Wood Mackenzie's own base-case forecast has global primary energy consumption (a measure of total energy use across all sources before conversion into electricity or fuel) rising by 8% from current levels.

That would see the consumption of energy peak at 717 exajoules in 2035, an exajoule being a unit equal to a quintillion joules and commonly used to measure energy on a national or global scale.

Wood Mackenzie then projects that consumption would eventually decline to 672 exajoules by 2060.

The demand for electricity is a different story altogether, though, as consumption is projected to double over the same period.

Even under the pessimistic demographic scenario, global population would still 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, mean many demand drivers remain intact regardless of the fertility trend.

The impact on critical minerals

A shrinking workforce carries its own consequences. Chief among these is a greater incentive to invest in automation, which in turn pushes up the demand for electricity and critical minerals even as demand for oil and gas cools.

Prakash Sharma, Head of Energy Transition at Wood Mackenzie, says that these implications for resources will be significant, regardless of changes to population.

"A lower population does not diminish the draw on critical minerals," he explains.

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

“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, due in July 2026, is expected to 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, but says any downward revision will carry real economic weight, given the pressure ageing populations place on GDP growth and public finances.

Could falling birth rates expedite decarbonisation and simplify planning?

Not everyone in the industry sees the slowing fertility rates as bad news.

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

A plateau or even a gentle decline in the demand curve could ease some of that pressure, giving planners breathing room to build out capacity in a more considered way rather than a reactive one.

There is also an environmental case to be made.

Fewer people, in principle, means less resource consumption and lower aggregate emissions, a point that has drawn interest from climate researchers as well as economists.

But most experts caution against treating population decline as a shortcut to decarbonisation.

Zeke Hausfather, a Climatologist working at the Breakthrough Institute, has argued that it is consumption and economic activity that drive emissions more than population size on its own.

“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.”

Other researchers have made a similar point 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 precisely in those lower-emitting nations.

In other words, a smaller population might blunt the growth curve, but it will not by itself solve the emissions problem, and it could just as easily complicate the economics of the energy transition by shrinking the workforce and tax base needed to fund it.

Whether falling fertility proves a relief or a fresh headache may depend less on the number of people the world ends up with, and more on what kind of energy system it builds to serve them.