Global energy demand will continue to grow over the next 20 years, albeit at a slowing annual rate, fueled by economic and population growth in non-OECD countries. Increased energy efficiency and strong growth for renewable energy are also forecast in BPs Energy Outlook 2030, which was recently released.
Global energy demand is likely to grow by 39% by 2030, or 1.6% annually, almost entirely in non-OECD countries; consumption in OECD countries is expected to rise by just 4% in total over the period. Global energy will remain dominated by fossil fuels, which are forecast to account for 81% of global energy demand by 2030 down about 6% from current levels. The period should also see increased fuel-switching, with more gas and renewables use at the expense of coal and oil.
Gradual switching should see renewables, including biofuels, continue to be the fastest-growing sources of energy globally, rising at an annual clip of more than 8%, much quicker even than natural gas, the fastest-growing fossil fuel at about 2% per year over the period to 2030.
BP chief economist Christof Rühl argues that the impact of globalization and competition will continue to deliver a remarkable convergence in energy intensity around the world (Fig. 1), a measure of energy use per unit of national economic output.
Fig. 1. Convergence of energy intensity and fuel shares.
The growth of unconventional supply, including US shale oil and gas, Canadian oil sands and Brazilian deepwaters, against a background of a gradual decline in oil demand, will see the Western Hemisphere become almost totally energy self-sufficient by 2030. This means that growth in the rest of the world, principally Asia, will depend increasingly on the Middle East for its growing oil requirements.
Oil will continue to lose market share throughout the period, although demand for hydrocarbon liquids will still reach 103 million bpd in 2030, up by 18% from 2010. This means the world will still need to bring on enough liquids to meet the forecasted 16 million bpd of extra demand by 2030 and replace declining output from existing sources.
While coal is expected to continue gaining market share in the current decade, growth will wane in the 20202030 decade; gas growth will remain steady and non-fossil fuels are likely to contribute nearly half of the growth after 2020.
Power generation is expected to be the fastest-growing user of energy in the period to 2030, accounting for more than half the total growth in primary energy use. And it is in the power sector where the greatest changes in the fuel mix are expected. Renewables, nuclear and hydroelectric should account for more than half the growth in power generation.
In China, growth of energy use is expected to slow significantly after 2020 as the economy matures (Fig. 2). Although Indias population is on track to exceed Chinas, its energy growth path is unlikely to replicate Chinas energy intensive growth path. It will more than double its energy use to 2030, heavily based on coal, but this will still result in the consumption of some 1.3 billion toe, or just over one quarter of Chinas total.
Fig. 2. Energy consumption growth in India and China.
There will remain a heavy reliance on higher oil exports from Middle East OPEC countries to meet demand. BPs analysis suggests that the Middle East countries have the capability to bring on the required new production to meet global demand, even though the regions energy use per capita is expected to remain more than three times as high as the rest of the non-OECD world.
BP expects to see steady progress in longstanding efforts to displace oil with gas and to improve the efficiency of energy use within the region. Saudi Arabian, Iraqi and regional production of gas-related liquids will dominate supply growth as the regions share of global oil supply rises to 34% by 2030.
Transportation is likely to be the slowest-growing sector for global energy consumption; significant improvements in fuel efficiency, including hybridization of vehicles, will partly offset continued strong growth in vehicle sales in emerging markets. Hybrid vehicles (including plug-ins) offer consumer flexibility and appear capable of meeting anticipated fuel economy targets in 2030; oil is likely to account for 87% of transport sector energy use, down from 95% today, with biofuels filling most of the gap and accounting for 7% of transport sector energy use.
Global CO2 emissions are likely to rise by about 28% by 2030. If more aggressive policies than currently envisioned are introduced, global CO2 emissions could begin to decline by 2030.
By 2030, energy importers will need to import 40% more than they do today, but the experience will vary by region. In North America, efforts to reduce dependence on foreign supplies should show impressive results in the next couple of decades. Bolstered by supply growth from biofuels, as well as unconventional oil and gas, North Americas energy deficit will turn into a small surplus by 2030.
In contrast, Europes energy deficit remains at current levels for oil and coal but will increase by some two-thirds for natural gas, supplied by LNG and pipelines from the former Soviet Union.
Chinas energy deficit across all fuels will widen by more than a factor of five and Indias (mainly oil and coal), will more than double in the period to 2030. HP