Wood Mackenzie Flags Demographic Decline as Structural Risk to Long-Run Energy Demand
China's population fell 3.4 million in 2025, putting the country 9.6 million below UN projections and casting doubt on global energy demand forecasts through 2060.
China's population declined by 3.4 million people in 2025, leaving the country with 1.40 billion residents — 9.6 million below what the United Nations had projected for 2024. Wood Mackenzie, in research published on Monday (2026-07-13) and covered by industry outlets on Tuesday (2026-07-14), identified demographic decline as a structural risk that long-run energy demand models may be underweighting.5,4
The research firm's concern centres on the pace of fertility decline. The global fertility rate has dropped to 2.2 births per woman in 2025, down from 2.6 in 2007, and is now barely above the 2.1 replacement ratio required for population stability. "Demographics dictate destiny," said Peter Martin, Wood Mackenzie's head of economics. The United Nations currently projects global population rising from 8.2 billion in 2025 to 10.0 billion in 2060, but Wood Mackenzie said observed fertility trends suggest that projection could be revised lower.4,5
Under the UN's own low-birth-rate scenario, global population would peak at 8.9 billion in 2053 before declining to 7.0 billion by 2100 — nearly three billion fewer people than the baseline by century's end.5
Wood Mackenzie's central forecast already reflects some demographic caution. The firm expects global primary energy consumption to rise 8% from current levels, peaking at 717 exajoules in 2035 before falling to 672 EJ by 2060. Electricity consumption, driven by electrification and data centre growth, is projected to double over that period to 71 petawatt-hours. But Wood Mackenzie noted that the demographic assumptions embedded in rival energy models remain anchored to UN baseline population figures that observed fertility trends no longer support.5,6
The exposure is concentrated in China. The country has been the dominant driver of global LNG demand growth and industrial electricity expansion for the past decade. In 2024, China's overall power demand grew 4.6%, according to the National Bureau of Statistics, while thermal generation — mostly coal — rose 1.5% to 6.34 trillion kilowatt-hours, defying expectations that coal-fired output had already peaked.2
That coal growth rate, the slowest in nine years outside the COVID period, still describes a market expanding rather than contracting. Hydropower output climbed 10.7% year-on-year in 2024 to 1.27 trillion kWh, indicating that renewables and coal are both growing simultaneously as total electricity demand outpaces the build-out of any single generation source. JKM Asian LNG pricing, which reflects China's spot import appetite, stood at $16.65 per mmBtu on Wednesday (2026-07-15).2
The IEA, in its Electricity 2026 report, projected global power demand expanding at 3.6% per year on average between 2026 and 2030, driven by electric vehicles, air conditioning, industrial consumption and data centres. Meeting that pace of growth would require annual grid investment to rise roughly 50% above current levels of $400 billion, the agency estimated. Combined renewables and nuclear are forecast to reach 50% of the world's power mix by the end of the decade, with natural gas also gaining share as coal erodes.3,1
Wood Mackenzie's demographic analysis sits uncomfortably alongside that near-term growth picture. If fertility rates continue declining and UN population projections are revised down, the window of strong fossil fuel demand growth narrows, but so does the addressable market for new renewable capacity and grid infrastructure. The firm noted that AI-driven productivity gains could partially offset the demand drag from a shrinking working-age population, though it did not specify a figure.4
China's demographic trajectory is already visible in the data. The 3.4 million population drop in 2025 widened the gap between observed reality and UN baseline assumptions, and Wood Mackenzie's forecast horizon runs to 2060, by which point the firm said the demographic profile is expected to have shifted materially. Governments, the firm argued, need to act decisively to secure private and public capital for energy system adaptation before the full weight of that shift arrives.4,5
China's next annual population figures, expected later this year from the National Bureau of Statistics, will indicate whether the 2025 decline deepened or stabilised — and with it, how quickly Wood Mackenzie's 717 EJ peak-demand forecast may need to be revised.5