Possible developments in global energy to 2050

The recently published 2020 edition of the BP Energy Outlook explores possible paths for the global energy ‎transition, how global energy markets may evolve over the next 30 years and the key ‎uncertainties that may shape them. Looking out to 2050 – a decade further than in previous ‎editions – the Outlook is focused around three main scenarios: ‘Rapid’, ‘Net Zero’ and ‘Business-as-Usual’ (BAU).

In all three scenarios, global energy demand grows, driven by ‎increasing prosperity and living standards in the emerging world. Primary energy demand ‎plateaus in the second half of the outlook in Rapid and Net Zero, as improvements in energy ‎efficiency accelerate. In BAU, demand continues to grow throughout the period, reaching ‎around 25% higher by 2050. 

The transition to a lower carbon energy ‎system results in a more diverse energy mix, as all three scenarios see a decline in the share ‎of the global energy system for hydrocarbons and a corresponding increase in renewable ‎energy as the world increasingly electrifies.The scale of the shift varies significantly across ‎the scenarios, with the share of hydrocarbons in primary energy declining from around 85% in ‎‎2018 to between 65–20% by 2050 and renewable energy rising to 20–60%.‎

The scenarios all see oil demand fall over the next 30 years – 10% lower ‎by 2050 in BAU, around 55% lower in Rapid and 80% lower in Net Zero. In BAU, demand ‎plateaus in the early 2020s and in both Rapid and Net Zero oil demand never fully recovers ‎from the fall caused by COVID-19. The decline in oil demand is driven by the increasing ‎efficiency and electrification of road transportation. In all three scenarios the use of oil in ‎transport peaks in the mid- to late-2020s. The share of oil in meeting transport demand falls ‎from over 90% in 2018 to around 80% by 2050 in BAU, but to 40% in Rapid and to just 20% ‎in Net Zero.‎

The outlook for gas is helped by broad-based demand and the increasing ‎availability of global supplies. Global demand for gas varies significantly across the scenarios. It peaks ‎in the mid-2030s in Rapid and in the mid-2020s in Net Zero, and by ‎‎2050 is broadly similar to 2018 and around a third lower, respectively. In BAU, gas demand ‎increases throughout the next 30 years to be around a third higher by 2050.  Natural gas can ‎potentially play two important roles in an accelerated transition to a low carbon energy ‎system – supporting a shift away from coal in fast growing, developing economies where ‎renewables and other non-fossil fuels may not be able to grow sufficiently quickly to replace ‎coal; and combined with carbon capture, use and storage (CCUS) as a source of (near) zero carbon power. Gas combined with ‎CCUS accounts for between 8–10% of primary energy by 2050 in Rapid and Net Zero.‎

Renewables are the fastest growing ‎source of energy over the next 30 years in all the scenarios, growing from around 5% of primary energy in 2018 to 60% by 2050 in Net Zero, 45% in Rapid and ‎‎20% in BAU. Wind and solar power dominate this growth, underpinned by continuing falls in ‎development costs.

Decarbonisation of the energy system leads to increasing ‎amounts of final energy use being electrified. By 2050 the share of electricity in total final ‎consumption increases from a little over 20% in 2018 to 34% in BAU, 45% in Rapid and over ‎‎50% in Net Zero. The growth of global power generation is dominated by renewable energy, ‎accounting for the entire growth in Rapid and Net Zero and for around three quarters in BAU. ‎The changing fuel mix, combined with the increasing use of CCUS, sees carbon emissions ‎from the power sector decrease by over 80% in Rapid, compared with just 10% in BAU. ‎

As the energy system progressively decarbonises, there are ‎increasing roles for both hydrogen and bioenergy. Use of hydrogen increases in the second ‎half of the Outlook in Rapid and Net Zero, particularly in activities which are harder or more ‎costly to electrify. By 2050, hydrogen accounts for around 7% of final energy consumption ‎‎(excluding non-combusted) in Rapid and 16% in Net Zero. The shift away from traditional ‎hydrocarbons also leads to an increasing role for bioenergy, including liquid biofuels used ‎largely in transport; biomethane, which can substitute for natural gas; and biomass, used ‎predominantly in the power sector. By 2050, bioenergy accounts for around 7% of primary ‎energy in Rapid and almost 10% in Net Zero. ‎

The scenarios show that achieving a rapid and ‎sustained fall in carbon emissions is likely to require a series of policy measures, led by a ‎significant increase in carbon prices. These polices may need to be further reinforced by shifts ‎in societal behaviours and preferences. Delaying these policies measures and societal shifts ‎may significantly increase the scale of the challenge and lead to significant additional ‎economic costs and disruption. The risks of such a delay are also explored in an additional ‘‎Delayed’ and ‘Disorderly’ scenario in this year’s Outlook.

The scenarios outlined in this year’s Outlook represent a notable shift from those presented in 2019. Bernard Looney, BP CEO, noted that the report had been ‘invaluable’ in helping the company ‘better ‎understand the changing energy landscape’ and had been ‘instrumental’ in helping BP develop its ‎new strategy.