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Driven in large part by the desire to reduce carbon emissions and supported by increased availability of relative low-cost supplies thanks to new extraction methods, ARC has observed that natural gas delivered by pipeline and/or as liquified natural gas (LNG) is increasingly replacing coal for electric power generation in multiple world regions. At the same time, while renewables such as wind and photovoltaic (PV) solar currently represent a relatively small percentage of the overall energy mix, according to the 2018 BP Energy Outlook report, this percentage will increase significantly over the next twenty or so years.
BP Energy Outlook Shows Growth in Renewables
“By 2040, oil, gas, coal and non-fossil fuels each account for around a quarter of the world’s energy. More than 40 percent of the overall increase in energy demand is met by renewable energy,” according to Spencer Dale, BP Group Chief Economist. This, and other forecast data, is based on the company’s evolving transition (ET) scenario, which assumes increasing global prosperity and that government policies, technologies, and societal preferences will evolve in a similar manner to the recent past. Other predictions include:
• Fast growth in developing economies will drive up global energy demand by a third.
• The global energy mix will be much more diverse by 2040, with oil, gas, coal, and non-fossil fuels each contributing around 25 percent.
• Renewables will by far be the fastest-growing fuel source, increasing five-fold and providing around 14 percent of primary energy.
• Demand for oil will grow over much of Outlook period before plateauing in the later years.
• Natural gas demand will grow strongly and overtake coal as the second largest source of energy.
• Oil and gas together will account for over half of the world’s energy
• Global coal consumption will “flatline,” with Chinese coal consumption likely to have plateaued.
• The number of electric cars will grow to around 15 percent of all registered vehicles, but (due to high-intensity use) account for 30 percent of passenger vehicle miles driven.
• Carbon emissions will continue to rise, signaling the need for a comprehensive set of actions to achieve a decisive break from the past.
Industry Consumes Half of all Global Energy and Feedstock Fuels
According to the Forecast, “Industry currently consumes around half of all global energy and feedstock fuels, with residential and commercial buildings (29 percent) and transport (20 percent) accounting for the remainder. In the ET scenario, while the industrial sector accounts for around half of the increase in energy consumption over the next 25 years, energy use in the buildings sector also grows robustly, driven by an increase in demand for space cooling, lighting and electrical appliances. Global demand for both passenger and freight transport services more than doubles by 2040. But the impact on transport fuel demand is largely offset by efficiency gains. In the EU, new cars in 2040 are likely to be around 70 percent more efficient than in 2000.
Increased Carbon Reductions Needed
The report concludes that “The continuing growth of carbon emissions in the ET scenario highlights the need for an even more decisive break from the past if climate goals are to be met.”
Clearly, in addition to government support, this will require a concerted effort across the industrial, commercial, transportation, and building sectors. In the industrial, automotive, rail transport, and smart cities/smart grid spaces, ARC sees great promise for emerging technologies and approaches such as IIoT, advanced analytics, and digital transformation to support the global carbon emissions objectives. We will continue to research and report on these and other disruptive technologies and approaches in the future.
