The major chunk of global energy supply growth is expected to come from renewables and natural gas over the next two decades, but steep investment in oil exploration and production will be needed to meet crude demand in 2040.
The global energy demand is set to rise by around a third by 2040, driven by improvement in living standards, particularly in India, China and across Asia.
- These are the key highlights of BP Energy Outlook 2019.
It shows how rising prosperity drives an increase in global energy demand and how that demand will be met over the coming decades through a diverse range of supplies including oil, gas, coal and renewables.
The UK-based oil company said wind, solar and other renewables will account for about 30% of the world’s electricity supplies by 2040, up from 25% in BP’s 2040 estimates last year, and about 10% today.
Energy consumed by industry and buildings accounts for around 75% of this increase in overall energy demand, while growth in energy demand from transport slows sharply relative to the past as gains in vehicle efficiency accelerate, it said.
The Outlook states that 85% of the growth in energy supply is generated through renewable energy and natural gas, with renewables becoming the largest source of global power generation by 2040.
The pace at which renewable energy penetrates the global energy system is faster than for any fuel in history.
Demand for oil grows in the first half of the Outlook period before gradually plateauing, while global coal consumption remains broadly flat. Across all the scenarios considered in the Outlook, significant levels of continued investment in new oil will be required to meet oil demand in 2040, it said.
“The Outlook again brings into sharp focus just how fast the world’s energy systems are changing, and how the dual challenge of more energy with fewer emissions is framing the future. Meeting this challenge will undoubtedly require many forms of energy to play a role,” said Bob Dudley, group chief executive.
“Predicting how this energy transition will evolve is a vast, complex challenge. In BP, we know the outcome that’s needed, but we don’t know the exact path the transition will take. Our strategy offers us the flexibility and agility we need to meet this uncertainty head on.”
“The world of energy is changing,” agrees Spencer Dale, group chief economist. "Renewables and natural gas together account for the great majority of the growth in primary energy. In our evolving transition scenario, 85% of new energy is lower carbon.”
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