Home / Oil & Energy / Oil & Companies News / BP Energy Outlook: both main scenarios see 2025 oil peak, rapid renewables growth

BP Energy Outlook: both main scenarios see 2025 oil peak, rapid renewables growth

The outlook for energy in two scenarios

bp’s Energy Outlook 2024 uses two scenarios – Current Trajectory and Net Zero – to explore the speed and shape of the energy transition out to 2050 and to help shape a resilient strategy for bp.

Current Trajectory is designed to capture the broad pathway along which the global energy system is currently travelling.

Net Zero explores how different elements of the energy system might change in order to achieve a substantial reduction in carbon emissions.

The global energy system

The two scenarios are informed by recent trends and developments in the global energy system. In emerging trends, we discuss these recent developments across areas including energy security, energy demand, carbon emissions and investment.

The scenarios can be used to help inform some key insights about how the energy system may evolve over the next 25 years. We discuss trends common across both scenarios, including the rapid growth of wind and solar power and the declining importance of fossil fuels, and also trends that are more dependent on the pace of the transition, including the use of biofuels and low carbon hydrogen.

In the overview, we use the two scenarios to explore the speed and shape of the energy transition out to 2050, then in the following pages discuss the outlook for the various fuel types.

Accelerating the energy transition

We compare the two scenarios to explore what needs to change in order to move from the current relatively slow, shallow and geographically uneven decarbonization pathway to a faster global transition that could be considered consistent with the Paris climate goals.

Trends common across both scenarios

Energy demand grows more strongly in emerging economies, driven by rising prosperity and living standards. But the magnitude and persistence of the growth in energy consumption depends critically on actions taken globally to accelerate improvements in energy efficiency.

The structure of energy demand changes, with the importance of fossil fuels declining, replaced by a growing share of low carbon energy, led by wind and solar power. The world moves from the ‘energy addition’ phase of the transition, in which more of both low carbon energy and fossil fuels are consumed, to an ‘energy substitution’ phase, with declining consumption of fossil fuels.

Wind and solar grow rapidly, supported by falling costs and a steadily increasing electrification of the energy system. The rising share of variable renewable energy in power generation requires global power systems to bolster their resilience to fluctuations in generation, by upgrading grids, and increasing system flexibility, storage, and reliable spare (dispatchable) capacity.

Oil demand declines over the outlook but continues to play a significant role in the global energy system for the next 10-15 years. This requires continuing investment in upstream oil (and natural gas).

The decline in oil demand stems at first largely from the improving efficiency of the internal combustion engine (ICE) vehicle fleet, but then over time increasingly from the electrification of road transport. The number of electric vehicles grows rapidly, underpinned by regulatory standards and increasing cost competitiveness.

Transition-dependent trends

Whether the demand for natural gas increases or falls over the next 25 years depends on the speed of the energy transition. Natural gas consumption rises in emerging economies as they grow and industrialize. But in accelerated transition pathways this is offset by shifts away from natural gas to lower carbon energy.

The use of biofuels and biomethane grows over the next 25 years. But the pace of that expansion in key sectors such as aviation is highly dependent on the extent of government policies and mandates supporting their use.

Low carbon hydrogen helps to decarbonize the energy system through its use in industry and transport for activities that are hard to electrify, and, to a lesser extent, in providing resilience in power systems. The high cost of low carbon hydrogen relative to incumbent unabated fossil fuels, however, means that its significance depends on the scale of policy support. Even in a faster transition pathway, much of the growth of low carbon hydrogen occurs after 2035.

CCUS plays a critical role in enabling the transition to a low carbon energy system, but it requires government support and incentives to compensate for the additional costs its use involves. The deployment of CCUS complements a transition away from fossil fuels – it does not act as an alternative.
Source: bp

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping
error: Content is protected !!
×