BP plots three scenarios with renewables driving growth
BP's Energy Outlook report considers Rapid, Net Zero and Business As Usual outcomes as befits these uncertain times but it is confident renewable energy, led by wind and solar power, will increasly sharply in all three scenarios.
Strong growth will be underpinned by continuing pronounced falls in the cost of both renewable energies as they move down their learning curves, with solar costs falling by close to 60 percent or more during the next 30 years, the report states.
Each scenario differs due to alternative assumptions about policies and societal preferences. Both Rapid and Net Zero assume a significant increase in carbon prices, which reach $250/tonne of CO2.
While demand for oil will fall over the next 30 years, the importance of electricity in final energy consumption is likely to increase materially over the same time period. Oil will be increasingly challenged as society shifts away from its reliance on fossil fuels, while the outlook for natural gas is "more resilient". The energy mix will become more diverse, driven increasingly by customer choice rather than resource availability.
"The world is on an unsustainable path," the report warns. "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. Delaying these policies measures and societal shifts may lead to significant economic costs and disruption."
Many of the findings dovetail with BP's corporate transformation, as it diversifies from an international oil company producing resources to an integrated energy company providing solutions for customers.