The Global Energy Transition: Exploring the Uncertainty

Transcription

1 The Global Energy Transition: Exploring the Uncertainty International Symposium, University of Tokyo, December 218 Paul Appleby BP Group Strategic Planning

2 How to handle the energy transition? Track the transition Explore the uncertainty scenarios Get on board: Advancing the energy transition Get into action do, learn, do

3 Tracking the transition

4 Primary energy fuel mix Consumption growth by fuel Shares of primary energy consumption Annual change, Mtoe 35 5% Coal Nuclear Hydro Oil Renew. Gas 4% 3% 2% 1% Oil Coal Gas Hydro Nuclear Renew % Note: Oil includes biofuels BP Statistical Review of World Energy BP p.l.c. 218

5 Fuel shares in power generation Share 6% 5% Coal Non-fossil Oil & gas 4% 3% 2% 1% % BP Statistical Review of World Energy BP p.l.c. 218

6 Exploring the uncertainty Scenarios are not about predicting the future, rather they are about perceiving futures in the present. The end result is not an accurate picture of tomorrow, but better decisions about the future. Peter Schwartz, The Art of the Long View

7 Alternative scenarios Primary energy consumption by fuel Carbon emissions Billion toe Billion tonnes CO Renewables ET ICE ban Less RE gas push switch FT EFT Hydro Nuclear Coal Gas Oil Evolving transition (ET) 1 Internal combustion engine ban (ICE ban) Less gas switching 5 Renewables push (RE push) Faster transition (FT) Even faster transition (EFT) BP p.l.c. 218

8 Billion toe 2 Transport 15 1 Three windows on the energy transition Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Other Africa Other Asia India China OECD Renewables Hydro Nuclear Coal Gas Oil BP p.l.c. 218

9 Energy demand by sector Billion toe 2 Primary energy consumption by end use sector % per annum 5% Final energy consumption growth: non-combusted versus industry 15 Transport Industry Non-combusted Buildings 4% 3% Non-combusted Industry 1 2% 5 1% % BP p.l.c. 218

10 Energy demand in buildings Final energy consumption in buildings by fuel type Billion toe Oil Gas Coal Electricity BP p.l.c. 218

11 Energy demand in buildings and transport sector Final energy consumption in buildings by fuel type Billion toe Oil Gas Coal Electricity Billion toe Contributions to transport energy consumption growth Income per head Population growth Efficiency gains BP p.l.c. 218

12 Billion toe 2 Transport 15 1 Three windows on the energy transition Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Other Africa Other Asia India China OECD Renewables Hydro Nuclear Coal Gas Oil BP p.l.c. 218

13 Regional energy demand Primary energy consumption by region Primary energy growth and regional contributions Billion toe Other Africa Other Asia India China OECD % per annum 3.% 2.5% 2.% 1.5% 1.%.5%.% % BP p.l.c. 218

14 Energy mix by region Billion toe 5 Primary energy demand by fuel and region Coal Oil Gas Nuclear Hydro Renewables US EU China India Middle East 14 BP p.l.c. 218

15 Billion toe 2 Transport 15 1 Three windows on the energy transition Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Other Africa Other Asia India China OECD Renewables Hydro Nuclear Coal Gas Oil BP p.l.c. 218

16 Global energy by fuel Primary energy consumption by fuel Shares of primary energy Billion toe Renewables Hydro Nuclear Coal Gas Oil 5% 4% 3% Oil Coal Hydro Gas Nuclear Renewables 2% 5 1% % BP p.l.c. 218

17 Diversified fuel mix Shares of primary energy 1% 8% 6% Oil Gas Coal Non-fossil 4% 2% % BP p.l.c. 218

18 Billion toe 2 Transport 15 1 Three windows on the energy transition Industry Non-combusted Buildings Primary energy demand End-use sector Region Fuel Other Africa Other Asia India China OECD Renewables Hydro Nuclear Coal Gas Oil BP p.l.c. 218

19 Five key questions Is the transition to a lower carbon energy system happening fast enough? What have we learnt about electric cars and the mobility revolution? When is global oil demand likely to stop growing? Just how fast will renewable energy grow? How resilient is the outlook for natural gas? 19 BP p.l.c. 218

20 Five key questions Is the transition to a lower carbon energy system happening fast enough? What have we learnt about electric cars and the mobility revolution? When is global oil demand likely to stop growing? Just how fast will renewable energy grow? How resilient is the outlook for natural gas? 2 BP p.l.c. 218

21 Carbon emissions continue to rise in the ET scenario Carbon emissions Carbon emissions in 24: EFT versus ET scenario Billion tonnes CO 2 4 Billion tonnes CO 2 4 Energy intensity Fuel switching Evolving transition Faster transition 2 1 Power Other sectors CCUS Even faster transition Evolving transition Even faster transition 21 BP p.l.c. 218

22 Impact of faster transition on global energy system Billion tonnes CO 2 in 24 Reductions in carbon emissions: EFT versus ET scenario Billion toe 2 Primary energy consumption under different scenarios 24 Power CCUS Industry & Buildings Renew. Hydro Nuclear Coal Gas Oil Transport 216 ET FT EFT 22 BP p.l.c. 218

23 Five key questions Is the transition to a lower carbon energy system happening fast enough? What have we learnt about electric cars and the mobility revolution? When is global oil demand likely to stop growing? Just how fast will renewable energy grow? How resilient is the outlook for natural gas? 23 BP p.l.c. 218

24 Penetration of electric cars in 24 BP p.l.c. 218

25 Penetration of electric cars in 24 Share of global car parc ~15% Share of Vkm ~3% BP p.l.c. 218

26 Electric cars, shared mobility and autonomy Trillion km Car kilometres by fuel type New mobility share of Vkm 4 Electricity 4% Private - autonomous 35 3 Gas Liquids 3% Shared - autonomous Shared - human driver % % % BP p.l.c. 218

27 Liquid fuel demand from passenger cars Mb/d Growth in demand for travel Changes in liquids demand from cars: Tightening in vehicle efficiency standards 2. Shared mobility EVs Switch to EVs Other gains in fuel efficiency BP p.l.c. 218

28 Global ban on internal-combustion engine (ICE) cars Share Electric car sales as a share of total car sales Share Share of total passenger Vkm powered by electricity 1% 1% Evolving transition Evolving transition 8% ICE ban 8% ICE ban 6% 6% 4% 4% 2% 2% % % BP p.l.c. 218

29 Impact of ICE ban Mb/d Passenger cars liquids demand Evolving transition ICE ban Carbon emissions from energy Billion tonnes CO Evolving transition Even faster transition 216 Evolving transition ICE ban BP p.l.c. 218

30 Impact of ICE ban Passenger cars liquids demand Carbon emissions from energy Mb/d Billion tonnes CO Evolving transition ICE ban Evolving transition ICE ban Even faster transition 216 Evolving transition ICE ban BP p.l.c. 218

31 Five key questions Is the transition to a lower carbon energy system happening fast enough? What have we learnt about electric cars and the mobility revolution? When is global oil demand likely to stop growing? Just how fast will renewable energy grow? How resilient is the outlook for natural gas? 31 BP p.l.c. 218

32 Demand for oil and other liquid fuels Mb/d Liquids demand Mb/d, average annual growth Liquids demand growth Cars Non-road Industry Power Trucks Non-combusted Buildings Power Industry Transport Buildings Non-combusted Total BP p.l.c. 218

33 Demand for liquid fuels by scenario Liquids demand Mb/d Evolving transition ICE ban Faster transition Even faster transition BP p.l.c. 218

34 Demand for liquid fuels by scenario Liquids demand Mb/d Evolving transition 4 ICE ban Faster transition 2 Even faster transition Supply with no investment (3% decline rate) BP p.l.c. 218

35 Five key questions Is the transition to a lower carbon energy system happening fast enough? What have we learnt about electric cars and the mobility revolution? When is global oil demand likely to stop growing? Just how fast will renewable energy grow? How resilient is the outlook for natural gas? 35 BP p.l.c. 218

36 Rapid growth in renewable energy TWh, average annual growth Growth of renewable power Pace of power market penetration Largest gains in market share over 25 years, %pts OECD China Other 2% 15% 8 6 1% Nuclear ( ) Renewables (215-24) 4 5% Gas ( ) % 36 BP p.l.c. 218

37 Renewables push scenario 1% Renewables share of power growth % 6% 4% 2% % Evolving transition Renewables push 37 BP p.l.c. 218

38 Renewables push scenario Renewables share of power growth Change in carbon intensity of power % % 8% -2% 6% -4% 4% -6% 2% -8% % Evolving transition Renewables push -1% Evolving transition Renewables push Even faster transition 38 BP p.l.c. 218

39 Five key questions Is the transition to a lower carbon energy system happening fast enough? What have we learnt about electric cars and the mobility revolution? When is global oil demand likely to stop growing? Just how fast will renewable energy grow? How resilient is the outlook for natural gas? 39 BP p.l.c. 218

40 Growth in natural gas demand Gas consumption by region Gas consumption by sector Bcf/d Bcf/d N America China Middle East Africa Europe India & Other Asia CIS Other Transport Power Industry Buildings Non-combusted BP p.l.c. 218

41 Possible risks to the outlook for natural gas Billion toe Gas demand increase Industry Transport Power Buildings Non-combusted 1. Switching.5 Other effects. Evolving transition Less gas switch 41 BP p.l.c. 218

42 Possible risks to the outlook for natural gas Billion toe Gas demand increase Industry Transport Power Buildings Non-combusted Switching % per annum -1% % 1% 1% 2% 2% Evolving transition Less gas switch Renewables push Gas demand growth Evolving transition Less gas switch Other effects 42 Faster transition Even faster transition BP p.l.c. 218

43 The energy transition: mapping the uncertainty Some aspects of energy transition seem relatively likely: global energy demand continues to grow driven by increasing prosperity slower growth as we learn to do more with less increasing abundance and diversification of energy supplies renewable energy growing in importance oil and gas continue to play a central role in the global energy system Other aspects remain far more uncertain: impact of EVs and autonomy in reshaping transport sector role of natural gas and renewables in lower carbon transition how will we achieve a more decisive break from past to achieve sharp fall in carbon emissions? 43 BP p.l.c. 218

44 Advancing the energy transition

45 Our strategy for the energy transition Growing gas and advantaged oil in the Upstream Venturing and low carbon across multiple fronts Market led growth in the Downstream Modernising the whole Group 45

46 Our commitment to advance a low carbon future 46

47 Creating and building low carbon businesses

48 Getting into action Lightsource BP

49 Getting into action Fulcrum Bioenergy

50 Getting into action Chargemaster Acquisition of the UK s biggest electric vehicle charging network

51 The Global Energy Transition: Exploring the Uncertainty International Symposium, University of Tokyo, December 218 Paul Appleby BP Group Strategic Planning