BP: Global energy demand continues to rise

According to BP’s Energy Outlook, energy consumption is expected to increase by 34% between 2014 and 2035. The extra energy is required because of the expected growth in the world economy as well as the rising global population.

This increase is projected in BP’s ‘base case’, which outlines the most likely path for energy demand by fuel based on assumptions about future changes in policy, technology and the economy. The Outlook also explores the uncertainties around the base case using a number of alternative cases.

BP’s Energy Outlook delves into masses of data to pinpoint the main forces that will shape the energy markets over the next two decades.

In the base case, the world’s GDP (gross domestic product) is expected to more than double – around one-fifth of the doubling being due to population growth and four-fifths to improvements in productivity.

China and India together account for almost half of the projected increase in global GDP, with OECD (Organisation for Economic Co-operation and Development) economies accounting for around a quarter.

The world’s population is projected to increase by around 1.5 billion people to reach nearly 8.8 billion people by 2035.

Virtually all of the additional energy is consumed in fast-growing emerging economies. Energy demand within the OECD barely grows. Growth in China’s energy demand slows as its economy rebalances towards a more sustainable rate.

Highlights

• EU energy demand in 2035 is back to where it was 50 years earlier, despite the economy being almost 150% bigger
• By the final decade of the Outlook, China contributes less than 30% of global energy growth, compared with nearly 60% over the past decade.
• China surpasses the US as the world’s leading oil consumer by 2035
• Fossil fuels remain the dominant source of energy powering the global economy, providing around 60% of the increase in energy and accounting for almost 80% of total energy supplies in 2035.
• Gas is the fastest growing fossil fuel at 1.8% per annum, with its share in primary energy gradually increasing. Oil grows steadily at 0.9% p.a., although the trend decline in its share continues. The combined increase of oil and gas over the Outlook is similar to the past 20 years.
• The oil market gradually rebalances, with the current low level of prices boosting demand and dampening supply. The increase in consumption of liquid fuels is largely driven by the increase in the global vehicle fleet, which more than doubles from around 1.2 billion today to 2.4 billion by 2035.
• While coal slows and renewables advance, the combined increase of oil and gas in the next 20 years is similar to that of the last 20 years
• The rapid growth in renewables is supported by the expected pace of cost reductions: the costs of onshore wind and utility-scale solar PV are likely to fall by around 25% and 40% over the next 20 years.

Source: BP