BP global energy forecast: Battery-powered vehicles (BPVs) may drive the rise of renewables in low-carbon, mature economies, but we still need oil as petro-chem feedstock

BP is hedging its bets on transport power in the future with the investment in battery-powered vehicle (BPV) equipment manufacturers.
BP is hedging its bets on transport power in the future with the investment in battery-powered vehicle (BPV) equipment manufacturers.

The 2018 edition of the BP Energy Outlook – the ‘bible’ for the global energy industry – was published yesterday and considers the forces shaping the global energy transition out to 2040 and the key uncertainties surrounding that transition.

The speed of the energy transition is uncertain and the new Outlook considers a range of scenarios.

The following key forecasts – by Spencer Dale, group chief economist – are based on BP’s ‘Evolving Transition’ scenario, which assumes that government policies, technologies and societal preferences evolve in a manner and speed similar to the recent past. These include: – 

BP Energy Outlook 2018 forecast for 2040
BP Energy Outlook 2018 forecast for 2040
  • 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.
  • Oil and gas together account for over half of the world’s energy.
  • Global coal consumption flatlines and it seems increasingly likely that Chinese coal consumption has plateaued.
  • The number of BPVs (battery powered vehicles) 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 kilometers.
  • Carbon emissions continue to rise, signalling the need for a comprehensive set of actions to achieve a decisive break from the past.
Spencer Dale
Spencer Dale

Dale said: “We are seeing growing competition between different energy sources, driven by abundant energy supplies, and continued improvements in energy efficiency. As the world learns to do more with less, demand for energy will be met by the most diverse fuels mix we have ever seen.

“By 2040, oil, gas, coal and non-fossil fuels each account for around a quarter of the world’s energy – while more than 40% of the overall increase in energy demand is met by renewable energy.

“Oil demand is forecast to grow over much of the Outlook, although it plateaus in the later years. All the demand growth comes from emerging economies.

“The growth in supply is driven by US tight oil in the early part of the Outlook, with OPEC taking over from the late 2020s as Middle East producers adopt a strategy of growing market share.

“The transport sector continues to dominate global oil demand, accounting for more than half of the overall growth. Most of the growth in energy demand from transport, which flattens off towards the end of the Outlook, comes from non-road (largely air, marine, and rail) and trucks, with small increases from cars and motorbikes.

“The transport sector continues to be dominated by oil (around 85% in 2040), despite increasing penetration of alternative fuels – particularly natural gas and BPVs (battery-powered vehicles).

“The suggestion that rapid growth in BPVs will cause <global> oil demand to collapse just isn’t supported by the basic numbers – even with really rapid growth. 

“Even in the scenario where we see a total ban on new diesel and petrol sales and very high efficiency standards, oil demand is still higher in 2040 than it is today.”

21 Feb 2018

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