Efficiency slows and coal use rises, leading to 2017 emissions increase – BP Review

BP’s latest Statistical Review of World Energy indicates that, after three years of no growth in global carbon dioxide levels, emissions rose by 1.6% in 2017 as global energy demand, and coal consumption, grew. In addition, previous gains in energy intensity (the amount of energy per unit of GDP) were reversed in 2017, says the Review.

The BP Statistical Review of World Energy takes a thorough look at the world’s energy markets. Looking at the data in detail, the Review says that global energy demand grew by 2.2% in 2017, up from 1.2% in 2016 and above its 10-year average of 1.7% per year.

Despite unusually strong growth in OECD countries, related to a pick-up in economic growth and a slight slowing in the pace of improvement in energy intensity, the vast majority of the increase in global energy consumption came from the developing world, which accounted for nearly 80% of the expansion.

China alone contributed over a third of that growth, with energy consumption growing by over 3% in 2017, almost three times the rate seen over the past couple of years. This sharp pick-up was driven by a rebound in the output of some of China’s most energy-intensive sectors, particularly iron, crude steel and non-ferrous metals. Despite this increase, the growth of China’s energy demand in 2017 was still significantly slower than its 10-year average, and its rate of decline in energy intensity was more than twice the global average.

Around 60% of the increase in primary energy was provided by natural gas and renewable energy. Natural gas consumption rose by 3% (around 96 bn cubic metres), the fastest rate since 2010, providing the single largest contribution to the growth of primary energy, buoyed by exceptional growth in China (31 bn cm).

This was closely followed by renewable energy, including biofuels, at 14.8%, which again grew rapidly, driven by robust growth in both wind and solar power. But coal consumption was also up, by 1%, growing for the first time since 2013. This was largely driven by India increasing consumption by 18mn tonnes of oil equivalent (toe), but it is also notable that Chinese coal consumption increased slightly (4mn toe) after three years of successive falls during 2014–2016.

World coal production grew by more than 105mn toe, or 3.2%, the fastest rate of growth since 2011, with output rising by 56mn toe in China and 23mn toe in the US.

Looking to the oil sector, global oil consumption growth averaged 1.8%, or 1.7mn barrels per day (b/d), above its 10-year average of 1.2%, for the third consecutive year. Global oil production rose by 0.6mn b/d, below average for the second consecutive year

For the first time, this year’s Review includes data on the fuel mix in the power sector, and key materials (eg lithium and cobalt) for the changing energy world. As BP’s Chief Economist Spencer Dale noted, the power sector really matters. ‘It is by far the single biggest market for energy, absorbing over 40% of primary energy last year. And it’s at the leading edge of the energy transition, as renewables grow and the world electrifies.’

Global power generation increased by 2.8% in 2017, close to its 10-year growth average. Almost all that growth came from the developing world, driven by strong expansion in renewable energy, led by wind and solar, which accounted for almost half of the total growth in power generation capacity, despite accounting for only 8% of total generation.

According to Dale, the most striking – and worrying – chart in the whole of the Statistical Review is one covering the trends in the power sector fuel mix over the past 20 years. ‘Striking, because despite the extraordinary growth in renewables in recent years and the huge policy efforts to encourage a shift away from coal into cleaner, lower carbon fuels, there has been almost no improvement in the power sector fuel mix over the past 20 years,’ he said. ‘The share of coal in the power sector in 1998 was 38% – exactly the same as in 2017.’

‘[This is] worrying, because the power sector is the single most important source of carbon emissions from energy consumption, accounting for over a third of those emissions in 2017,’ Dale continued. ‘To have any chance of getting on a path consistent with meeting the Paris climate goals there will need to be significant improvements in the power sector. But this is one area where at the global level we haven’t even taken one step forward, we have stood still – perfectly still for the past 20 years. This chart should serve as a wake-up call for all of us.’