bp's Energy Outlook examines future energy scenarios

The key trends and uncertainties surrounding the energy transition are explored in the latest edition of bp’s Energy Outlook

The challenges to the energy system and the implications of key shifts and trends are explored using two main scenarios: Current Trajectory and Net Zero. Together these scenarios span a wide range of the possible outcomes for the global energy system over the next 25 years.

In both scenarios, 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.

Primary energy consumption grows by nearly 10% in Current Trajectory and declines around 25% in Net Zero. Growth in primary energy consumption varies from region to region. In developed economies and China, it declines in both scenarios. However, in emerging economies excluding China it grows by 1.3% per year in 2022-50 in Current Trajectory and declines by 0.3% per year in Net Zero, driven by rising prosperity and living standards.

Renewable energy to soar

Renewable energy is predicted to soar in both scenarios, growing by 3.3% to 4.6% per year in 2022-50. driving a faster decarbonisation of the energy system. Growth in installed capacity of wind and solar technologies combined in 2022-50 could grow between 10 and 14 times. The accelerated growth in renewable energy is partly due to higher power demand. The growth of wind and solar is 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 capacity.

Electricity generation grows strongly in 2022-2050, between 85% and 135%. This increase is driven by the rapid electrification of industry, transport, and buildings alongside the rise in green hydrogen production.

Oil demand declines over the outlook, by between 23% and 73%, but continues to play a significant role in the global energy system for the next 10-15 years and the demand for oil as a feedstock remains resilient. This requires continuing investment in upstream oil (and natural gas).

The decline in oil demand stems at first largely from the improving efficiency of conventional vehicles, 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. The share of oil and gas combined in primary energy in 2050 ranges from 27 % to 50%.

The path of natural gas consumption varies between scenarios, increasing by around 20% in Current Trajectory and declining by over 50% in Net Zero. In the latter scenario, around 80% of the gas consumed is in combination with a carbon capture and storage (CCS) technology, contrasting with the limited use of CCS today.

In Net Zero, hydrogen production is fully decarbonised. Green hydrogen represents around 60% of the total low carbon hydrogen produced by 2050. In this scenario low carbon hydrogen production achieves around 390 Mt in 2050.

Declining emissions

Carbon emissions decline between 25% and 95% as the energy system electrifies and renewable energy grows strongly. Carbon emissions reduce to 31 and 2 Gt of CO2e in 2050 in Current Trajectory and Net Zero, respectively. Emissions in 2022 were 41 Gt of CO2e.

“The world is in an ‘energy addition’ phase of the energy transition in which it is consuming increasing amounts of both low carbon energy and fossil fuels,” said Spencer Dale, bp's chief economist, in the Foreword to the Outlook. "The challenge is to move – for the first time in history – to an ‘energy substitution’ phase, in which low carbon energy increases sufficiently quickly to allow the consumption of fossil fuels, and with that carbon emissions, to decline‎.”

Any successful and enduring transition needs to address all three elements of the energy trilemma, he added, with the security and affordability elements having been highlighted by the repercussions of the energy disruptions and shortages caused by the war in Ukraine.

“To shift the world from its current unsustainable emissions trajectory to a pathway consistent with the Paris climate goals, there is a need for greater electrification fuelled by even faster growth in wind and solar power, and a significant acceleration in energy efficiency improvements, together with increasing use of a whole range of other low carbon energy sources and technologies, including biofuels, low carbon hydrogen, and carbon capture, use and storage (CCUS),” Dale said.