BP's Energy Outlook 2023: Four Major Trends in Global Energy Transition until 2050
Recently, BP released the "Energy Outlook 2023" report. The report indicates that there will be primarily four major trends in the future global energy development: a continual decline in the proportion of fossil fuels, a rapid expansion in the application of renewable energy, a continuous improvement in electrification levels, and a steady increase in low-carbon hydrogen consumption. The report predicts through the New Momentum, Accelerated, and Net Zero scenarios, analyzing the development trends and uncertainties of the world's energy transformation by 2050.
1. Terminal energy consumption will peak in all three scenarios.
Under the Accelerated and Net Zero scenarios, Total final energy consumption (TFC) will peak in the mid-to-late 2020s and will be 15%-30% lower by 2050 compared to 2019. On the other hand, in the New Momentum scenario, the TFC will continue to increase until around 2040 and will be around 10% higher by 2050 compared to 2019. The TFC of emerging markets will continue to grow for the next decade or even longer, while developed economies will reach their peak in the next few years.
2. The global energy low-carbon transformation will gradually reduce the role of fossil fuels.
In all three scenarios, the total consumption of fossil fuels will decrease by 2050, and the share of primary energy will decline from 65% in 2019 to 20%-50%. Electricity consumption will increase by around 75%, and industrial energy will increasingly shift towards electricity and low-carbon hydrogen. The outlook for oil demand is decreasing, but it will still play an important role. The demand for natural gas depends on the progress of the energy transformation in the short term, and although LNG trade will grow, its long-term prospects are uncertain.
3. The application of renewable energy will rapidly expand in the future, and offset the impact of weakened demand for fossil fuels.
In all three scenarios, the share of renewable energy in primary energy will increase from around 10% in 2019 to 35%-65% by 2050. Wind and solar power generation will rapidly expand, and installed capacity will increase by 9-15 times by 2050. The global power system will gradually transition to a low-carbon system. Modern bioenergy (including modern solid biomass, biofuels, and biomethane) will help decarbonize hard-to-abate sectors and industrial processes and replace traditional biomass for cooking and heating.
4. The level of electrification in the energy system will continue to increase.
By 2050, the share of electricity in final energy consumption will increase from around 20% in 2019 to 30%-50%. Almost all end-use sectors will increase their level of electrification. Among them, the building sector will have the highest level of electrification, with at least half of its final energy consumption coming from electricity in all three scenarios by 2050. The transport sector will experience the largest growth in electrification, primarily driven by the electrification of road transport. In comparison, the industrial sector will have relatively limited growth in electrification, mainly due to the need for high-temperature (>200℃) thermal processes in industrial production.
5. The increasing demand for low-carbon hydrogen will support the decarbonization of the energy system.
In the Accelerated and Net Zero scenarios, low-carbon hydrogen will serve as a complementary low-carbon energy carrier to support the decarbonization of energy systems that are difficult or costly to electrify. By 2050, the share of primary energy used for low-carbon hydrogen production will increase to 13%-21%. Low-carbon hydrogen will mainly come from green and blue hydrogen, with the importance of green hydrogen continually increasing over time.
6. Carbon capture, utilization, and storage (CCUS) technology will play a crucial role in addressing hard-to-decarbonize sectors.
Carbon capture, utilization, and storage (CCUS) technology plays a crucial role in achieving deep decarbonization by capturing the carbon dioxide emitted from industrial production processes as a means of reducing emissions from fossil fuel use. In addition, a range of carbon removal technologies is required to achieve rapid and deep decarbonization, such as bioenergy with carbon capture and storage (BECCS), nature-based solutions (NbS), and direct air carbon capture and storage (DACCS).
7. The energy transformation requires a significant amount of investment across a wide value chain.
The energy transformation requires a significant amount of investment across a wide value chain. In the future, there will be a sharp increase in investments in the wind and solar power generation sectors, while the oil and gas sectors and the development of critical mineral resources will also require continued investment. In addition, infrastructure and equipment investments will be necessary for low-carbon transformation, including power grids and transmission and distribution systems required for low-carbon power expansion and power batteries required for the electrification of transportation (with demand reaching 10-20 TWh by 2050).
Source：https://mp.weixin.qq.com/s/KRSVK6mbCvvCaMu8YPAJgg, https://www.bp.com/en/global/corporate/energy-economics/energy-outlook.html