Analysing how previous Outlooks have been revised over time helps identify key developments that may affect the future path of the energy system.
The modelling assumptions used in Rapid differ from those used in last year’s Rapid Transition scenario (RTS) in two main respects. First, Rapid includes a more comprehensive modelling of the role that hydrogen and bioenergy may play in the energy transition. Second, Rapid embodies a faster pace of decarbonization, such that the level of carbon emissions from energy use in Rapid in 2040 are around 15% lower than in 2019’s RTS. The differences in Rapid relative to 2019’s RTS reflect a combination of these modelling changes as well as the impact of recent developments.
Global GDP in Rapid is 8% lower in 2040 than in last year’s RTS. This largely reflects the impact from Covid-19 and new assumptions concerning the impact of climate change on economic activity (see Global backdrop and Estimates of climate change on GDP growth). The level of energy demand in 2040 in Rapid is around 4% lower, reflecting the weaker profile for economic growth partially offset by the increasing use of secondary energy carriers such as electricity and hydrogen, whose production tends to boost primary energy.
The largest downward revision is to oil, whose share of primary energy in 2040 is 4 percentage points lower than in 2019’s RTS. This diminished role for oil reflects the proportionally higher impact of Covid-19 on the transport sector, faster penetration of electricity and hydrogen in transport, and more stringent policy assumptions regarding the use of plastics (see Global backdrop, Transport and Non-combusted.
The share of natural gas in primary energy is also lower than in last year’s RTS, squeezed by a more pronounced shift to renewable energy in power generation and a greater substitution by electricity and hydrogen in industry.
The main counterpart is renewable energy, whose share of primary energy in 2040 is 7 percentage points higher than in last year’s RTS. This upwards revision is split roughly equally between bioenergy – reflecting this year’s more comprehensive analysis of bioenergy (see Net Zero) – and wind & solar power, supported by green hydrogen production as well as continuing falls in development costs.
It is also helpful to compare the scenarios in the Energy Outlook with projections published by other organizations to highlight differences of view and areas of uncertainty. Rapid can be compared with a sample of external outlooks which are broadly consistent with limiting global temperature rises to ‘well below 2°C’ as well as a range of corresponding IPCC (see Comparisons for details of the sample of external outlooks and IPCC scenario sample ranges for more details on the IPCC scenarios).
The average growth of primary energy over the next 30 years in Rapid is towards the bottom end of the range of both the sample of external outlooks and the IPCC scenarios. This may partly reflect the impact of Covid-19 on economic activity and energy demand since many of the scenarios have not been updated since the pandemic, as well as the assumed impact of climate change on GDP growth in Rapid.
The comparative weakness of energy demand in Rapid is manifest in the profiles for oil and coal consumption, where Rapid is at or towards the bottom of the range of both the external projections and the IPCC scenarios.
As with Rapid, both sets of comparator scenarios point to renewable energy being the fastest growing source of energy over the next 30 years, with the average annual rate of growth of renewable energy in Rapid broadly in line with the median IPCC scenario.
The outlook for natural gas in Rapid is towards the top end of both scenario ranges, which may partly reflect Rapid having a brighter outlook for blue hydrogen than many of the other scenarios.
In terms of carbon emissions in 2050, Rapid is towards the low end of the range of external scenarios and in line with the median IPCC scenario. Within that, the use of CCUS in Rapid is broadly in the middle of the spread of external outlooks, although below the bottom of the range of IPCC scenarios which embody a stronger view of the potential role of CCUS.