BP published its 2018 Energy Outlook today where it considers the forces shaping the global energy transition out to 2040 and the uncertainties surrounding it. BP states that the ‘speed of the transition is uncertain’. Please find below a statement from the Carbon Tracker Initiative on its new outlook.
Luke Sussams, Senior Researcher, said:
“It’s significant that BP has kicked the notion of an energy transition to the forefront of its latest outlook. However, it’s business as usual projection – rebranded as the ‘Evolving Transition’ scenario – shows the yawning gap between company expectations and the 2˚C climate target set by the world’s leaders in Paris in 2015.
“BP makes all the right noises with respect to road transport, almost doubling its projection for EVs on the road to 2035 versus last year (though still conservative compared with market forecasts) and sees a strong role for shared and autonomous vehicles by 2040.
“BP’s Outlook offers little insight into non-road forms of transport, such as aviation, shipping and trucks, even though these sectors account for the biggest slice of oil demand growth for the industry and its business.”
Laurence Watson, data scientist, said:
“BP is hedging its bets with a basket of scenarios from the climate-compatible to the unambitious; and guess which end of the spectrum gets most of the airtime? The ‘Evolving Transition’ scenario finds coal still supplies 30% of all power generation in 2040, albeit with renewables increasing to 25%.
“We agree with BP that electrification is a mega-trend that will change the energy sector in ways previously unimaginable. However, we see the future energy system predominantly supplied by cheap wind and solar backed up by a combination of storage, demand response and gas. For coal, national phase-outs in Europe, large-scale cancellation of projects in China, and global progress on carbon pricing should give BP pause.
“BP’s costs for renewables are already out of date. Remarkably, solar PV tariff prices in India have declined nearly 80% since 2011. This price decline means solar PV is no longer just a threat to new coal investments.
“In many regions building new renewables will soon be cheaper than running existing coal – in Europe alone, we find that wind and solar will out compete existing coal plants by 2024 and 2027 respectively. Renewables won’t just be taking the growth away from fossil fuels, they will be winning on all fronts.”