February 22, 2018 Read More →

BP Annual Outlook: Peak Oil Demand in Sight, Coal Portion of Energy Mix ‘Lowest Since the Industrial Revolution’

BP:

The speed of the energy transition is uncertain and the new Outlook considers a range of scenarios. Its evolving transition (ET) scenario, which assumes that government policies, technologies and societal preferences evolve in a manner and speed similar to the recent past, expects:

  • Fast growth in developing economies drives up global energy demand a third higher.
  • The global energy mix is the most diverse the world has ever seen by 2040, with oil, gas, coal and non-fossil fuels each contributing around 25%.
  • Renewables are by far the fastest-growing fuel source, increasing five-fold and providing around 14% of primary energy.
  • Demand for oil grows over much of Outlook period before plateauing in the later years.
  • Natural gas demand grows strongly and overtakes coal as the second largest source of energy.
  • Global coal consumption flatlines with Chinese coal consumption seeming increasingly likely to have plateaued.
  • The number of electric cars grows to around 15% of the car parc, but because of the much higher intensity with which they are used, account for 30% of passenger vehicle kilometres.

The Outlook considers the energy transition through three different lenses – by sector, region and fuel – each of which illuminates different aspects of the transition. It also looks at the impact of faster progress in reducing carbon emissions.

In the ET scenario, industry currently consumes around half of all global energy and feedstock fuels, with residential and commercial buildings (29%) and transport (20%) accounting for the remainder. In this scenario, while the industrial sector accounts for around half of the increase in energy consumption, energy use in the buildings sector also grows robustly, driven by an increase in demand for space cooling, lighting and electrical appliances. Global demand for both passenger and freight transport services more than doubles by 2040. But the impact on transport fuel demand is largely offset by efficiency gains. In the EU, new cars in 2040 are likely to be around 70% more efficient than in 2000.

The majority of the increased energy is consumed in Asia: in the ET scenario, China, India and other Asian countries account for around two-thirds of the growth. Energy demand within developed economies such as Europe, North America and Japan is flat. China and India each account for around a quarter of the increase in world energy over the Outlook. By the 2030s, India emerges as the world’s largest growth market for energy and Africa plays an increasingly important role in driving energy demand.

In the ET scenario, renewable energy is the fastest growing source of energy (7% p.a.), accounting for over 40% of the increase in energy supplies. By 2040 oil, gas, coal, and non-fossil fuels are projected to each provide around a quarter of the world’s energy. Natural gas (1.6% p.a.) grows much faster than either oil or coal, with its share in primary energy overtaking coal and converging on oil. Oil grows (0.5% p.a.), although is projected to plateau in the 2030s. Coal consumption is broadly flat, with its share in primary energy declining to 21%, the lowest since the industrial revolution.

More: BP Energy Outlook

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