BP Energy Outlook: Global energy demand on the rise
Global demand for energy is expected to increase by around 30% between 2015 and 2035, an average growth of 1.3% per year, according to the 2017 edition of the BP Energy Outlook, published today. However, this growth in energy demand is lower than the 3.4% per year rise expected in global GDP, reflecting improved energy efficiency driven by technology improvements and environmental concerns.
The Outlook looks at long-term energy trends and develops projections for world energy markets over the next two decades. The 2017 edition was launched today in London by Spencer Dale, BP’s group chief economist, and Bob Dudley, group chief executive.
Main energy sources
While non-fossil fuels are expected to account for half of the growth in energy supplies over the next 20 years, the Outlook projects that oil and gas, together with coal, will remain the main source of energy powering the world economy, accounting for more than 75% of total energy supply in 2035, compared with 86% in 2015.
Oil
Oil demand grows at an average rate of 0.7% a year, although this is expected to slow gradually over the period. The transport sector continues to consume most of the world’s oil with its share of global demand remaining close to 60% in 2035. However, non-combusted use of oil, particularly in petrochemicals, takes over as the main source of growth for oil demand by the early 2030s.
“The possibility that the most important source of growth in oil demand in the 2030s won’t be to power cars or trucks or planes, but rather used as an input into other products, such as plastics and fabrics, is quite a change from the past,” said Spencer Dale.
Gas
Gas grows more quickly than either oil or coal over the Outlook, with demand growing an average 1.6% a year. Its share of primary energy overtakes coal to be the second-largest fuel source by 2035. Shale gas production accounts for two-thirds of the increase in gas supplies, led by growth in the US. LNG growth, driven by increasing supplies in Australia and the US, is expected to lead to a globally integrated gas market anchored by US gas prices.
Coal
Coal consumption is projected to peak in the mid-2020s, largely driven by China’s move towards cleaner, lower carbon fuels. India is the largest growth market for coal, with its share of world coal demand doubling from around 10% in 2015 to 20% in 2035.
Renewables
Renewables are projected to be the fastest-growing fuel source, growing at an average rate of 7.6% per year, quadrupling over the Outlook, driven by increasing competitiveness of both solar and wind. China is the largest source of growth for renewables over the next 20 years, adding more renewable power than the EU and US combined.
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