BP: Renewable energy to outpace growth of oil
In annual report, BP provides a reality check on the scale of energy use, with renewable energy growth projected to be higher than fossil fuels in the next 20 years.
Given how many variables are involved, predicting the future of energy with accuracy is difficult. But BP's annual Energy Outlook, which came out today, is a closely watched indicator for the state of the energy industry.
The BP Energy Outlook 2030 (click for PDF) forecasts energy sources will diversify more in the future, with a bigger role for renewable, nuclear, and hydropower. Demand will continue to grow around the world, with developing countries consuming a larger share of energy.
Energy growth was mostly met with increased use of fossil fuels over the last 20 years. In the next 20 years, BP expects that solar, wind, geothermal, and biofuels will contribute a higher percentage--an 18 percent contribution to energy growth from 2010 to 2030, compared to 5 percent of energy growth from 1990 to 2010.
BP also forecast what portion renewables will play in primary energy--that is, energy sources before they are converted to a usable form such as electricity or liquid fuels. It predicts that renewable energy will go from less than 2 percent of primary energy use now to more than 6 percent in 2030.
One of the assumptions in BP's projections is that energy efficiency will improve significantly, particularly in OECD (Organisation for Economic Co-operation and Development) countries, and that governments around the world will adopt regulations to limit greenhouse gas emissions. But BP Group Chief Executive Bob Dudley said that BP, which advocates a way to put a price on carbon, is not optimistic about policy movement.
"Our base case assumes that countries continue to make some progress on addressing climate change, based on the current and expected level of political commitment. But overall, for me personally, it is a wake-up call," he said in a statement.
The BP projection assumes continued economic growing, leading to primary energy growing by 1.7 percent per year, or nearly 40 percent over the next 20 years, with much of that growth coming from non-OECD countries.
Among fossil fuels, BP expects that natural gas use will grow faster than coal and oil, which it says reached peak demand in 2005 in OECD countries. Higher efficiency in transportation will contribute to slow growth of oil use, while BP expects that biofuels will represent 6 percent of liquid fuels in 2030.