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Presentation on 'BP Energy Outlook 2040' by Dr Kaushik Deb

Talk on 'The BP Energy Outlook 2040', 26 April 2018 at the Centre for Policy Research

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Presentation on 'BP Energy Outlook 2040' by Dr Kaushik Deb

  1. 1. © BP p.l.c. 2018 Spencer Dale Group chief economist BP Energy Outlook 2018 edition
  2. 2. © BP p.l.c. 2018 0 5 10 15 20 2016 ET ICE ban Less gas switch RE push FT EFT Renewables Hydro Nuclear Coal Gas Oil 2 Primary energy consumption by fuel Carbon emissions 0 5 10 15 20 25 30 35 40 1970 1980 1990 2000 2010 2020 2030 2040 Evolving transition (ET) Internal combustion engine ban (ICE ban) Less gas switching Renewables push (RE push) Faster transition (FT) Even faster transition (EFT) 2040 Alternative scenarios Billion toe Billion tonnes CO2
  3. 3. © BP p.l.c. 2018 0 5 10 15 20 2016 ET ICE ban Less gas switch RE push FT EFT Renewables Hydro Nuclear Coal Gas Oil 3 Primary energy consumption by fuel Carbon emissions 0 5 10 15 20 25 30 35 40 1970 1980 1990 2000 2010 2020 2030 2040 Evolving transition (ET) Internal combustion engine ban (ICE ban) Less gas switching Renewables push (RE push) Faster transition (FT) Even faster transition (EFT) 2040 Alternative scenarios Billion toe Billion tonnes CO2
  4. 4. © BP p.l.c. 2018 0 5 10 15 20 Other Africa Other Asia India China OECD 4 0 5 10 15 20 Renewables Hydro Nuclear Coal Gas Oil Billion toe 0 5 10 15 20 Transport Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Three windows on the energy transition
  5. 5. Conventional LNG Russian pipeline 5 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% World China India Africa OECD Other Productivity Population 1990- 2016 2016- 2040 Economic backdrop GDP growth by region and factor % per annum
  6. 6. © BP p.l.c. 2018 0 5 10 15 20 Other Africa Other Asia India China OECD 6 0 5 10 15 20 Renewables Hydro Nuclear Coal Gas Oil Billion toe 0 5 10 15 20 Transport Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Three windows on the energy transition
  7. 7. © BP p.l.c. 2018 Energy demand by sector 7 Primary energy consumption by end use sector Final energy consumption growth: non-combusted versus industry % per annum 0 5 10 15 20 1970 1980 1990 2000 2010 2020 2030 2040 Transport Industry Non-combusted Buildings 0% 1% 2% 3% 4% 5% 1970- 1980 1980- 1990 1990- 2000 2000- 2010 2010- 2020 2020- 2030 2030- 2040 Non-combusted Industry Billion toe
  8. 8. © BP p.l.c. 2018 Energy demand in buildings 8 Billion toe 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 1970 1980 1990 2000 2010 2020 2030 2040 Oil Gas Coal Electricity Final energy consumption in buildings by fuel type
  9. 9. © BP p.l.c. 2018 Energy demand in buildings and transport sector 9 Billion toeBillion toe 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 1970 1980 1990 2000 2010 2020 2030 2040 Oil Gas Coal Electricity 0 1 2 3 4 5 2016 2040 Income per head Efficiency gains Population growth Contributions to transport energy consumption growth Final energy consumption in buildings by fuel type
  10. 10. © BP p.l.c. 2018 Regional energy demand 10 Primary energy consumption by region Primary energy growth and regional contributions % per annum 0 5 10 15 20 1970 1980 1990 2000 2010 2020 2030 2040 Other Africa Other Asia India China OECD -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 2000-2010 2010-2020 2020-2030 2030-2040 Billion toe
  11. 11. © BP p.l.c. 2018 Differences in the fuel mix across regions 11 Billion toe 0 1 2 3 4 5 2016 2040 2016 2040 2016 2040 2016 2040 2016 2040 Coal Oil Gas Hydro Nuclear Renewables US EU China India Middle East Primary energy demand by fuel and region
  12. 12. © BP p.l.c. 2018 0 5 10 15 20 Other Africa Other Asia India China OECD 12 0 5 10 15 20 Renewables Hydro Nuclear Coal Gas Oil Billion toe 0 5 10 15 20 Transport Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Three windows on the energy transition
  13. 13. © BP p.l.c. 2018 Global energy by fuel 13 Shares of primary energy 0 5 10 15 20 1970 1980 1990 2000 2010 2020 2030 2040 Renewables Hydro Nuclear Coal Gas Oil 0% 10% 20% 30% 40% 50% 1970 1980 1990 2000 2010 2020 2030 2040 Oil Gas Coal Nuclear Hydro Renewables Primary energy consumption by fuel Billion toe
  14. 14. © BP p.l.c. 2018 Diversified fuel mix 14 Shares of primary energy 0% 20% 40% 60% 80% 100% 1900 1920 1940 1960 1980 2000 2020 2040 Oil Gas Coal Non-fossil
  15. 15. © BP p.l.c. 2018 0 5 10 15 20 Other Africa Other Asia India China OECD 15 0 5 10 15 20 Renewables Hydro Nuclear Coal Gas Oil Billion toe 0 5 10 15 20 Transport Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Three windows on the energy transition
  16. 16. © BP p.l.c. 2018 Five key questions 16 • What have we learnt about electric cars and the mobility revolution? • When is global oil demand likely to stop growing? • Just how fast will renewable energy grow? • How resilient is the outlook for natural gas? • Is the transition to a lower carbon energy system happening fast enough?
  17. 17. © BP p.l.c. 2018 Five key questions 17 • What have we learnt about electric cars and the mobility revolution? • When is global oil demand likely to stop growing? • Just how fast will renewable energy grow? • How resilient is the outlook for natural gas? • Is the transition to a lower carbon energy system happening fast enough?
  18. 18. © BP p.l.c. 2018 Penetration of electric cars in 2040
  19. 19. © BP p.l.c. 2018 Penetration of electric cars in 2040 Share of global car parc ~15% Share of Vkm ~30%
  20. 20. © BP p.l.c. 2018 Electric cars, shared mobility and autonomy 20 0 5 10 15 20 25 30 35 40 2016 2020 2025 2030 2035 2040 Electricity Gas Liquids Trillion km Car kilometres by fuel type 0% 10% 20% 30% 40% 2016 2020 2025 2030 2035 2040 Private - autonomous Shared - autonomous Shared - human driver New mobility share of Vkm
  21. 21. © BP p.l.c. 2018 Liquid fuel demand from passenger cars 21 18.7 22.6 18.2 2.5 2.0 18.6 0 5 10 15 20 25 30 35 40 45 2016 Growth in demand for travel Tightening in vehicle efficiency standards Shared mobility EVs 2040 Switch to EVs Other gains in fuel efficiency Changes in liquids demand from cars: 2016-2040 Mb/d
  22. 22. © BP p.l.c. 2018 Global ban on internal-combustion engine (ICE) cars 22 0% 20% 40% 60% 80% 100% 2016 2020 2025 2030 2035 2040 Evolving transition ICE ban 0% 20% 40% 60% 80% 100% 2016 2020 2030 2040 Evolving transition ICE ban Electric car sales as a share of total car sales Share of total passenger Vkm powered by electricityShareShare
  23. 23. © BP p.l.c. 2018 Impact of ICE ban 23 Passenger cars liquids demand 0 4 8 12 16 20 24 2016 Evolving transition ICE ban Evolving transition ICE ban Carbon emissions from energy 0 5 10 15 20 25 30 35 40 1990 2000 2010 2020 2030 2040 Evolving transition Even faster transition 2016 2040 Billion tonnes CO2 Mb/d
  24. 24. © BP p.l.c. 2018 Impact of ICE ban 24 Passenger cars liquids demand 0 4 8 12 16 20 24 2016 Evolving transition ICE ban Evolving transition ICE ban Carbon emissions from energy 0 5 10 15 20 25 30 35 40 1990 2000 2010 2020 2030 2040 Evolving transition ICE ban Even faster transition 2016 2040 Mb/d Billion tonnes CO2
  25. 25. © BP p.l.c. 2018 Five key questions 25 • What have we learnt about electric cars and the mobility revolution? • When is global oil demand likely to stop growing? • Just how fast will renewable energy grow? • How resilient is the outlook for natural gas? • Is the transition to a lower carbon energy system happening fast enough?
  26. 26. © BP p.l.c. 2018 Demand for oil and other liquid fuels 26 0 20 40 60 80 100 120 140 2000 2010 2020 2030 2040 Cars Trucks Non-road Non-combusted Industry Buildings Power Liquids demand -0.5 0.0 0.5 1.0 1.5 2.0 2.5 2005- 2010 2010- 2015 2015- 2020 2020- 2025 2025- 2030 2030- 2035 2035- 2040 Power Buildings Industry Non-combusted Transport Total Mb/d, average annual growthMb/d Liquids demand growth
  27. 27. © BP p.l.c. 2018 Demand for oil and other liquid fuels 27 0 20 40 60 80 100 120 1970 1980 1990 2000 2010 2020 2030 2040 Evolving transition ICE ban Faster transition Even faster transition Liquids demand Mb/d
  28. 28. © BP p.l.c. 2018 Demand for oil and other liquid fuels 28 0 20 40 60 80 100 120 1970 1980 1990 2000 2010 2020 2030 2040 Evolving transition ICE ban Faster transition Even faster transition Supply with no investment Liquids demand (3% decline rate) Mb/d
  29. 29. © BP p.l.c. 2018 US tight oil: alternative scenarios 29 0 2 4 6 8 10 12 14 16 18 2010 2015 2020 2025 2030 2035 2040 0 200 400 600 800 1000 1200 2010 2015 2020 2025 2030 2035 2040 US tight oil production Number of US oil rigs (in the four main producing regions*) Evolving transition Evolving transition Mb/d *Permian, Eagle Ford, Bakken and Niobrara
  30. 30. © BP p.l.c. 201830 0 2 4 6 8 10 12 14 16 18 2010 2015 2020 2025 2030 2035 2040 0 200 400 600 800 1000 1200 2010 2015 2020 2025 2030 2035 2040 US tight oil: alternative scenarios Early peak Early peak US tight oil production Evolving transition Evolving transition Mb/d Number of US oil rigs (in the four main producing regions*) *Permian, Eagle Ford, Bakken and Niobrara
  31. 31. © BP p.l.c. 201831 0 2 4 6 8 10 12 14 16 18 2010 2015 2020 2025 2030 2035 2040 0 200 400 600 800 1000 1200 2010 2015 2020 2025 2030 2035 2040 Early peak Early peak Greater resource Greater resource Evolving transition Evolving transition US tight oil: alternative scenarios US tight oil production Mb/d Number of US oil rigs (in the four main producing regions*) *Permian, Eagle Ford, Bakken and Niobrara
  32. 32. © BP p.l.c. 2018 Five key questions 32 • What have we learnt about electric cars and the mobility revolution? • When is global oil demand likely to stop growing? • Just how fast will renewable energy grow? • How resilient is the outlook for natural gas? • Is the transition to a lower carbon energy system happening fast enough?
  33. 33. © BP p.l.c. 2018 Rapid growth in renewable energy 33 0 20 40 60 80 100 120 140 160 2000-2016 2016-2030 2030-2040 OECD China Other 0% 5% 10% 15% 20% TWh, average annual growth Largest gains in market share over 25 years, %pts Growth of renewable power Pace of power market penetration Nuclear (1966-1991) Gas (1985-2010) Renewables (2015-2040)
  34. 34. © BP p.l.c. 2018 ‘Renewables push’ scenario 34 0% 20% 40% 60% 80% 100% Evolving transition Renewables push Renewables share of power growth 2016-2040
  35. 35. © BP p.l.c. 2018 ‘Renewables push’ scenario 35 0% 20% 40% 60% 80% 100% Evolving transition Renewables push -100% -80% -60% -40% -20% 0% Evolving transition Renewables push Even faster transition Change in carbon intensity of power 2016-2040 Renewables share of power growth 2016-2040
  36. 36. © BP p.l.c. 2018 Five key questions 36 • What have we learnt about electric cars and the mobility revolution? • When is global oil demand likely to stop growing? • Just how fast will renewable energy grow? • How resilient is the outlook for natural gas? • Is the transition to a lower carbon energy system happening fast enough?
  37. 37. © BP p.l.c. 2018 Growth in natural gas demand 37 0 100 200 300 400 500 600 700 2016 2040 Transport Buildings Power Non-combusted Industry Gas consumption by sector 0 100 200 300 400 500 600 700 2016 2040 N America Europe China India & Other Asia Middle East CIS Africa Other Gas consumption by region Bcf/dBcf/d
  38. 38. © BP p.l.c. 2018 Possible risks to the outlook for natural gas Gas demand increase 2016-2040 38 Billion toe 0.0 0.5 1.0 1.5 2.0 Evolving transition Less gas switch Industry Buildings Transport Non-combusted Power Switching Other effects
  39. 39. © BP p.l.c. 2018 Possible risks to the outlook for natural gas 0.0 0.5 1.0 1.5 2.0 Evolving transition Less gas switch Industry Buildings Transport Non-combusted Power Gas demand increase 2016-2040 39 -1% 0% 1% 2% Evolving transition Less gas switch Renewables push Faster transition Even faster transition Gas demand growth 2016-2040 Billion toe % per annum Switching Other effects
  40. 40. © BP p.l.c. 2018 Five key questions 40 • What have we learnt about electric cars and the mobility revolution? • When is global oil demand likely to stop growing? • Just how fast will renewable energy grow? • How resilient is the outlook for natural gas? • Is the transition to a lower carbon energy system happening fast enough?
  41. 41. © BP p.l.c. 2018 Carbon emissions continue to rise in the ET scenario 41 Billion tonnes CO2 Carbon emissions 0 10 20 30 40 1970 1980 1990 2000 2010 2020 2030 2040 Evolving transition Faster transition Even faster transition Billion tonnes CO2 0 10 20 30 40 Evolving transition Even faster transition Other sectors CCUS Power Fuel switching Carbon emissions in 2040: EFT versus ET scenario Energy intensity
  42. 42. © BP p.l.c. 201842 0 2 4 6 8 10 12 Transport Industry & Buildings CCUS Power Billion tonnes CO2 in 2040 Reductions in carbon emissions: EFT versus ET scenario Impact of faster transition on global energy system Billion toe 0 5 10 15 20 2016 ET FT EFT Renew. Hydro Nuclear Coal Gas Oil 2040 Primary energy consumption under different scenarios
  43. 43. © BP p.l.c. 2018 Conclusion 43 • Some aspects of energy transition seem relatively likely: ➢ global energy demand continues to grow – driven by increasing prosperity ➢ slower growth as we learn to do more with less ➢ increasing abundance and diversification of energy supplies ➢ renewable energy growing in importance ➢ oil and gas continue to play a central role in the global energy system • Other aspects remain far more uncertain: ➢ impact of EVs and autonomy in reshaping transport sector ➢ role of natural gas and renewables in lower carbon transition ➢ how will we achieve a more decisive break from past to achieve sharp fall in carbon emissions?
  44. 44. © BP p.l.c. 2018 BP Energy Outlook 2018 edition

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