In this article, we will be taking a look at the 20 countries with the highest energy consumption. To skip our detailed analysis, you can go directly to see the 5 countries with the highest energy consumption.
When Russia invaded Ukraine in February 2022, the global economy was impacted, though no industry was impacted more than the energy sector. Russia is one of the biggest suppliers of oil and natural gas in the world, and Europe has traditionally been heavily dependent on Russian supplies, despite political tensions preceding the invasion and subsequent war. Even though European countries are attempting to move away from fossil fuel usage to renewable energy, 70% of its total energy consumption comes from fossil fuels. While Europe, which is home to some of the countries with the highest energy consumption, is a heavily energy dependent region, it relies mostly on imports, with around 40% of its natural gas needs coming from Russia alone. In 2019, before the pandemic impacted the global economy, world electricity consumption per day was 1,904 TWh.
An aerial view of an energy refinery, with massive tanks and piping defining the landscape.
In a bid to dissuade Russia from further aggression with Ukraine and as a punishment for activities already undertaken by it, Western countries, led by the U.S., implemented heavy sanctions on Russia, which also provides nearly half of all coal imports in the EU and 27% of oil imports in the region. While Europe has been attempting to move away from Russian oil and gas supply, having announced the intention of moving away completely from Russian supplies by 2027, it has faced significant issues, leading to a major energy crisis, which was one of the biggest global risks for 2023. Lack of supplies from Russia led to the price of energy increasing significantly and allowing major oil and gas companies, including some of the biggest oil companies in the world, to post their highest profits ever. While prices dropped in 2023 as compared to the peak achieved in 2022, there are still several challenges awaiting the countries with the highest energy consumption.
In an attempt to move away from Russia, top European companies signed contracts with Qatar for the supply of LNG, with one such deal including a a 27 year contract entered into by TotalEnergies SE (NYSE:TTE). In the current year, the share price of TotalEnergies SE (NYSE:TTE) has increased by more than 8%.
Aristotle Capital Global Equity Strategy made the following comment about TotalEnergies SE (NYSE:TTE) in its Q3 2023 investor letter:
“TotalEnergies SE (NYSE:TTE), one of the world’s largest energy companies, was also a primary contributor for the quarter. The company continues to execute on its strategic plan to reach net‐zero emissions by 2050 which, in contrast to many European energy providers, it looks to achieve through expanding ownership of renewable power and low‐carbon assets rather than purely divestment. The company expects to more than double its gross renewable generation capacity by 2025 (primarily in solar) and invest over 30% of its total spending in low‐carbon businesses through 2030. As such, we believe TotalEnergies is uniquely positioned to benefit from the increase in global demand for clean energy. In recent years, TotalEnergies’ reduction in capex and operating expenses has improved its FREE cash flow generation, now further aided by the favorable energy environment. This has supported its continued ability to return cash to shareholders, one of our catalysts, as demonstrated by the $3.8 billion returned through share buybacks and dividends during the second quarter.”
However, TotalEnergies SE (NYSE:TTE) mentioned recently that if needed, the company could divert natural gas from Qatar to non-European companies if it benefited Qatar and the company. "I don't see (how) you could manage complex power electricity markets in Europe with a lot of renewables without having flexible assets," TotalEnergies SE (NYSE:TTE) CEO Pouyanne said.
Renewable energy sector future outlook
The war with Russia may have accelerated it but the world, and particularly the Western world, has been moving towards renewable energy to mitigate and reverse the impact of climate change already being felt. In 2022, headwinds in the sector resulted in renewable energy growth slowing down in 2022, particularly in the U.S. Inflation has played a major role in this as costs have risen significantly and supply chain disruptions along with uncertainty with respect to trade policy and higher borrowing costs have all created obstacles to progress for the renewable energy sector. Luckily for the highest energy consuming countries in the world, demand has soared in 2023 though this could further complicate and intensify supply chain issues already present resulting in even higher prices. According to BDO, by 2024, around a third of global electricity will be produced through renewable sources and unsurprisingly, the countries with the highest energy consumption overall is in China, which was the most populous country in the world until a few month ago before being overtaken by India. This is good news for the growth of the biggest renewable companies in the world, the biggest of which are worth well over $100 billion today.
Currently, one of the biggest renewable energy companies in the world is NextEra Energy, Inc. (NYSE:NEE), though its fortunes have slid recently as its share price fell by 29% YTD 2023, after revising downwards annual growth expectations through 2026 primarily due to higher borrowing costs. However, the CFO of NextEra Energy, Inc. (NYSE:NEE) struck a more positive tone in the company's Q3 2023 earnings call, stating "Overall, we remain on track to achieve our renewable development expectations of roughly 33 gigawatts to 42 gigawatts through 2026. This quarter’s backlog additions include roughly 455 megawatts to repower existing wind facilities, which includes energy resources share of approximately 740 megawatts of repowers within the NextEra Energy Partners portfolio, which I’m going to discuss in a few minutes. As a reminder, in a repower, we invest roughly 50% to 80% of the cost of a new build, are able to refresh and enhance the performance of the turbine equipment, and start a new 10 years of production tax credits, collectively resulting in attractive returns. Energy Resources has previously repowered roughly 6 gigawatts of its approximately 23 gigawatt operating wind portfolio, and we believe we will be able to repower much of our existing wind portfolio in the coming years."
Madison Sustainable Equity Fund made the following comment about NextEra Energy, Inc. (NYSE:NEE) in its Q3 2023 investor letter:
“Although NextEra Energy, Inc. (NYSE:NEE) reported an in-line second quarter, the stock has been weak primarily because of rising interest rates. NextEra also reported slower renewables backlog growth than expected. We do not view this as an issue as we expect the development pipeline timeline may not be as predictable as investors would like. The environment for renewables remains favorable both from a demand perspective as well as cost perspective.”
Methodology
To determine the countries with the highest energy consumption in the world, we looked at both total energy consumption and energy consumption by country per capita. We obtained total energy consumption data from BP's Statistical Review of World Energy 2022, while using each country's population based on the World Bank to calculate per capita consumption. We assigned 60% weightage to energy consumption by capita while assigning 40% weightage to total energy consumption. While not part our official rankings methodology, we also looked at household electricity consumption by country, with Ghana being the country consuming the most household electricity as a percentage of total electricity.
Total primary energy consumption (exajoules): 2.28
Energy consumption per capita (exajoules per million people): 2.2
According to an energy systems expert at the Swedish Energy Agency, Sweden is likely to face really high electricity prices as winter begin its approach.
Total primary energy consumption (exajoules): 1.5
Energy consumption per capita (exajoules per million people): 3.3
Oman's government made an investment of over $30 billion to become a global player in the hydrogen industry and enable the country to transit to clean energy.
Total primary energy consumption (exajoules): 157.65
Energy consumption per capita (exajoules per million people): 1.1
China has the highest total energy consumption in the world, but its energy consumption per capita has fallen as the country transitions further to the services industry.
Total primary energy consumption (exajoules): 3.47
Energy consumption per capita (exajoules per million people): 2.0
While Netherland's consumption per capita is one of the highest in the world, new estimates suggest that the AI industry alone could consume as much electricity as all of Netherlands.
Total primary energy consumption (exajoules): 2.73
Energy consumption per capita (exajoules per million people): 2.3
For a short while in June 2023, Belgium's entire energy needs were met through wind and solar energy, despite being one of the countries with the highest energy consumption in the world.
Total primary energy consumption (exajoules): 9.41
Energy consumption per capita (exajoules per million people): 1.4
France and Germany account for around 40% of Europe's total energy consumption and France's electricity consumption is expected to increase sharply by 2030.
Total primary energy consumption (exajoules): 12.19
Energy consumption per capita (exajoules per million people): 1.4
Despite being embroiled in sanctions from Western countries for several years now, Iran's energy industry has thrived and electricity consumption in Iran broke all-time records in 2023, though this has put a heavy strain on its already overburdened grid.
Total primary energy consumption (exajoules): 1.74
Energy consumption per capita (exajoules per million people): 4.1
Kuwait is home to 6% of the world's proven oil reserves and by the end of 2023, aims to produce at least 15% of the national grid's total electricity through renewable means.
Total primary energy consumption (exajoules): 2.05
Energy consumption per capita (exajoules per million people): 3.8
Norway became the largest supplier of natural gas in Europe after Russia exited, and in 2022, Norway's energy earnings jumped by $100 billion.
Total primary energy consumption (exajoules): 17.74
Energy consumption per capita (exajoules per million people): 1.4
While being counted among the countries with the highest energy consumption, Japan has committed to carbon neutrality by 2050, though it needs to increase focus on its wind and solar energy sectors.
Total primary energy consumption (exajoules): 12.64
Energy consumption per capita (exajoules per million people): 1.5
Germany is one of the most energy intensive countries in Europe, and the energy crisis has negatively impacted its economy, which was called the worst-performing economy recently among developed countries.
Total primary energy consumption (exajoules): 1.93
Energy consumption per capita (exajoules per million people): 7.2
Qatar has the highest energy consumption per capita in the world, ensuring it remains among the highest energy consuming countries in the world.
Total primary energy consumption (exajoules): 5.72
Energy consumption per capita (exajoules per million people): 2.2
South Australia is one of the global leaders of energy transition, and crushed renewable energy records, as 86.9% of its total electricity requirement was driven by renewable energy.
Total primary energy consumption (exajoules): 3.46
Energy consumption per capita (exajoules per million people): 6.1
Singapore is set to provide households with additional incentives to reduce electricity usage during peaks times from 2024, and total electricity consumption in Singapore increased by 2.6% in 2022, reaching 53.5 TWh.
Total primary energy consumption (exajoules): 31.3
Energy consumption per capita (exajoules per million people): 2.2
Europe has continued to move away from Russia's energy provisions but Russia is likely to enter into an agreement with Kyrgyzstan to sell electricity to the latter.
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Disclosure: None. 20 countries with highest energy consumption is originally published at Insider Monkey.
