Watch the full Reuters Twitter Live event
In conversation with Reuters’ Chloe Tilley, Spencer Dale, bp’s chief economist since 2014 says getting to Paris means that the energy sector must make changes – improving energy efficiency and shifting towards lower or zero-carbon fuels.
“A key point here is decarbonizing the electricity that we use,” says Spencer. “That means massive growth in wind and solar power so that we’re generating zero-carbon electricity. Once we’ve decarbonized the power sector, we will then try to electrify everything we possibly can; the cars and trucks that we use, the way we heat our homes.”
Given that we can’t electrify all energy uses – such as transatlantic flights – there’s a pressing need for thinking beyond electricity.
That’s where hydrogen is shaping up to be a gamechanger in driving Paris consistency, whether through wind and solar power to produce green hydrogen, or blue hydrogen produced with natural gas.
“The hype surrounding hydrogen is justified if the world is serious about getting to net zero,” says Spencer, particularly for hard-to-electrify sectors where hydrogen can help to decarbonize.
“In a rough calculation, something in the order of two-thirds of energy used today can be electrified, but that means a third can’t. And hydrogen, together with bioenergy, can play a key role in providing energy sources for that other third,” says Spencer.
Natural gas is also vital to achieving the net-zero future, says Spencer. According to bp’s Statistical Review of World Energy 2020, the share of gas in primary energy continued to rise last year, reaching a record high of 24.7% ̶ despite overall carbon emissions falling 6% due to the pandemic.
In parts of Asia, many economies remain highly dependent on coal to produce their electricity. As rising prosperity lifts people out of low incomes to middle incomes, that is boosting demand for energy. Some of that demand can be met by growing wind and solar, but even if it grew as quickly as possible, it would not be sufficiently quick to meet the new energy demand and also replace the existing levels of coal.
Spencer Dale, bp chief economist
Climate mitigation technologies, such as carbon capture, use and storage (CCUS), in which carbon is captured when it’s emitted and then stored safely underground, and direct air capture, where carbon emissions are sucked from the atmosphere, will be important partners to gas in the drive to net zero, he says.
There’s also a critical role for greening companies in this transformation. In order to achieve the energy transition, the world can’t just rely on companies that are already green. A successful transition will also require the scale and engineering know-how of large existing companies that are working hard to become greener.
“That means finding ways in which we encourage those mainstream companies to become increasingly green over time,” says Spencer.
The success of the forthcoming COP26 is critical to increasing momentum towards the Paris climate goals and net zero.
Despite the many challenges, this should not be a counsel of despair, says Spencer. Achieving Paris, he believes, is still a ‘mission possible’.
“The world knows what to do. We know how to decarbonize the power sector with wind and solar. We know how to electrify cars and trucks. We know how to shift away from using oil or gas in buildings, and we know how to produce clean hydrogen,” he says.
What is needed, then, is collective will to adopt these new technologies at a pace and scale necessary to bring down carbon emissions, with governments and the private sector playing their parts in helping to achieve the stated targets.
At bp, we are in action towards meeting our near-term targets and aims for 2030. So far, we have: