The report suggests that energy consumption will shift away from fossil fuels and renewables, including bioenergy, will grow rapidly, as the world continues to electrify.
The 2020 edition of the bp Energy Outlook explores possible paths for the global energy transition, how global energy markets may evolve over the next 30 years and the key uncertainties that may shape them.
“The bp Energy Outlook is invaluable in helping us better understand the changing energy landscape and it was instrumental in helping us develop our new strategy," said bp CEO Bernard Looney. "This year, the outlook reaches out a decade further than before, to 2050, the year by which we intend to deliver our net-zero ambition.
“Even as the pandemic has dramatically reduced global carbon emissions, the world remains on an unsustainable path. However, the analysis in the Outlook shows that, with decisive policy measures and more low-carbon choices from both companies and consumers, the energy transition can still be delivered.
“It is one of the reasons I remain optimistic about the future and I hope readers will find the report helpful as we all try to make a difference.”
The 2020 Outlook explores the energy transition to 2050 using three main scenarios. Bp stresses that these are not predictions but, based on alternative assumptions about policies and societal preferences, are designed to help explore the range of possible outcomes over the next 30 years.
- Rapid – Assumes the introduction of policy measures, led by a significant increase in carbon prices that result in carbon emissions from energy use falling by around 70% by 2050 from 2018 levels. ‘Rapid’ is broadly in line with scenarios that are consistent with limiting the rise in global temperatures by 2100 to well below 2oC above pre-industrial levels.
- Net Zero – Assumes the policy measures of ‘Rapid’ are reinforced by significant shifts in societal and consumer behaviour and preferences, such as greater adoption of circular and sharing economies and switching to low carbon energy sources. This increases the reduction in carbon emissions by 2050 to over 95%. ‘Net Zero’ is broadly in line with a range of scenarios consistent with limiting temperature rises to 1.5oC.
- Business-as-usual (BAU) – Assumes that government policies, technologies and societal preferences continue to evolve in a manner and speed seen in recent past. In BAU, carbon emissions from energy use peak in the mid-2020s, but do not decline significantly, with emissions in 2050 less than 10% below 2018 levels.
According to bp, both the ‘Rapid’ and ‘Net Zero’ scenarios assume a significant increase in carbon prices, reaching $250 (€210) per tonne of carbon dioxide (CO2) in the developed world by 2050 and $175 (€147) per tonne in emerging economies.
This is much lower than in the ‘BAU’ scenario, with carbon prices reaching only $65 (€54) and $35 (€29) per tonne of CO2 by 2050 on average in developed and emerging economies respectively.
The firm said all three scenarios see oil demand fall over the next 30 years: 10% lower by 2050 in ‘BAU’, around 55% lower in ‘Rapid’ and 80% lower in ‘Net Zero’.
As the energy system progressively decarbonises, bp believes there are increasing roles for both hydrogen and bioenergy. The use of hydrogen would increase in the second half of the Outlook in ‘Rapid’ and ‘Net Zero’, particularly in activities which are harder or more costly to electrify.
By 2050, hydrogen would account for around 7% of final energy consumption (excluding non-combusted) in ‘Rapid’ and 16% in ‘Net Zero’. The move away from traditional hydrocarbons also leads to an increasing role for bioenergy, according to bp, including liquid biofuels used largely in transport, biomethane as a substitute for natural gas, and biomass used predominantly in the power sector. By 2050, bioenergy would account for 7% of primary energy in ‘Rapid’ and almost 10% in ‘Net Zero’.