Energy in context
Many forces and trends are fundamentally changing the business environment, creating uncertainties and influencing the way we operate
Megatrends
The key trends affecting our businesses include: growing global concern over climate change, the impact of rapidly advancing digital technology, increasing prosperity in the emerging world driving economic growth, changing societal expectations of corporations, and the shifting geopolitical structure.
One of the key drivers of these trends is climate change and the widening concern about the energy transition. The global energy system needs to deliver more energy with less carbon.
Demand for energy is set to grow significantly, driven by increases in prosperity in the developing world. Most of the growth in demand comes from developing economies, to support their industry and infrastructure and sustain improvements in living standards.
Carbon emissions need to fall sharply as the world seeks to move to a lower carbon energy system consistent with meeting the climate goals outlined in the Paris Agreement.*
Energy Outlook 2019 edition
Our Outlook explores the forces shaping the global energy transition out to 2040 and the key uncertainties surrounding it. The 2019 Outlook considers a range of scenarios. They have some common features, such as ongoing economic growth and a shift towards a lower carbon fuel mix, but differ in terms of policy, technology and behavioural assumptions.
The transition envisaged in the 2019 Outlook
- The world economy continues to grow, driven by increasing prosperity.
- The global economy more than doubles over the next 25 years, with twice as much economic activity in 2040 than we see today.
- The emergence of a large and growing middle class, particularly in emerging Asia, is an increasingly important force shaping growth and energy trends.
- The global population grows by 1.7 billion, reaching close to 9.2 billion people in 2040.
Demand for energy is set to grow significantly
- Global energy demand increases by about 20-35% by 2040 in the different scenarios.
- The vast majority of demand growth comes from developing economies to support their industry and infrastructure and allow living standards to keep improving.
But carbon emissions need to fall sharply
- There is a growing commitment to move to a pathway consistent with meeting the climate goals of the Paris Agreement*.
- To help achieve this, the world needs to transition to a lower carbon energy system.
The key dimensions of the energy transition
To meet the Paris goals we believe the world must take strong action on a range of fronts
Improving energy efficiency, to decouple energy demand from growing economic activity and prosperity.
Rapid growth in renewable energy and other low or zero carbon energy sources.
Increasing the share of electricity in final energy use and decarbonizing power generation.
Switching to lower or zero carbon liquid and gaseous fuels, particularly in areas such as heavy transport.
Deploying carbon-removal technologies, such as CCUS at scale.
Promoting natural climate solutions including the management and restoration of habitats, and the role of carbon credits.
There are many possible pathways to meeting the Paris goals and we use the different scenarios to explore this uncertainty.
* Paris Agreement
(1) Article 2.1(a) of the Paris Agreement states the goal of “Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.”
(2) Article 4.1 of the Paris Agreement: In order to achieve the long-term temperature goal set out in Article 2, parties aim to reach global peaking of greenhouse gas emissions as soon as possible, recognizing that peaking will take longer for developing country parties, and to undertake rapid reductions there after in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, on the basis of equity, and in the context of sustainable developmentand efforts to eradicate poverty.
The changing energy mix
Increased demand for energy will be met overthe coming decades through a diverse range of supplies, including oil, gas, coal and renewables.
The energy mix is shifting as the transition to a lower carbon energy system continues, with renewable energy and natural gas gaining in importance relative to oil and coal.
Scenarios
Evolving transition: renewables and natural gas account for almost 85% of the growth in primary energy by 2040, with their importance increasing relative to all other sources of energy.
Rapid transition: renewable energy grows rapidly, accounting for more than the entire increase in primary energy by 2040 – and a sharp contraction in the use of coal. The level of oil consumption falls, but gas continues to growaided by increasing use of CCUS.
* Renewables includes wind, solar, geothermal, biomass and biofuels
Source: Energy Outlook 2019
Primary energy consumption by fuel
Exajoules (EJ)
Primary energy consumption by fuel