《BP世界能源展望》2023.pdf

bp Energy Outlook 2023 edition3 | bp Energy Outlook: 2023 edition 2 | Energy Outlook 2023 explores the key trends and uncertainties surrounding the energy transition. Energy Outlook 2023 is focused on three main scenarios: Accelerated, Net Zero and New Momentum. These scenarios are not predictions of what is likely to happen or what bp would like to happen. Rather they explore the possible implications of different judgements and assumptions concerning the nature of the energy transition and the uncertainties around those judgements. The scenarios are based on existing technologies and do not consider the possible impact of entirely new or unknown technologies. The many uncertainties surrounding the transition of the global energy system mean that the probability of any one of these scenarios materializing exactly as described is negligible. Moreover, the three scenarios do not provide a comprehensive range of possible paths for the transition ahead. They do, however, span a wide range of possible outcomes and so help to illustrate the key uncertainties surrounding energy markets out to 2050. The scenarios in this year’s Outlook have been updated to take account of two major developments over the past year: the Russia-Ukraine war and the passing of the Inflation Reduction Act in the US. Aside from updating for those two developments, the scenarios are based largely on the analysis and scenarios in Energy Outlook 2022. They do not include a comprehensive assessment of all the changes and developments since Outlook 2022. The Energy Outlook is produced to inform bp’s strategy and is published as a contribution to the wider debate about the factors shaping the energy transition. But the Outlook is only one source among many when considering the future of global energy markets and bp considers a wide range of other external scenarios, analysis and information when forming its long-term strategy.5 | bp Energy Outlook: 2023 edition 4 | The past year has been dominated by the terrible consequences of the Russia- Ukraine war and its awful toll on lives and communities. Our thoughts and hopes are with all those affected. From an energy perspective, the disruptions to Russian energy supplies and the resulting global energy shortages seem likely to have a material and lasting impact on the energy system. Global energy policies and discussions in recent years have been focused on the importance of decarbonizing the energy system and the transition to net zero. The events of the past year have served as a reminder to us all that this transition also needs to take account of the security and affordability of energy. Together these three dimensions of the energy system – security, affordability, and sustainability – make up the energy trilemma. Any successful and enduring energy transition needs to address all three elements of the trilemma. Last year’s Energy Outlook did not include any analysis of the possible implications of the war in Ukraine. The scenarios in Outlook 2023 have been updated to take account of the war, as well as of the passing of the Inflation Reduction Act in the US. At the time of writing, the war is continuing with no end in sight. As such, any analysis of its possible implications must be treated as preliminary. However, the experience from the major energy supply shocks of the 1970s suggests that events that heightened energy security concerns can have significant and persistent impacts on energy markets. Most importantly, the desire of countries to bolster their energy security by reducing their dependency on imported energy – dominated by fossil fuels – and instead have access to more domestically produced energy – much of which is likely to come from renewables and other non- fossil energy sources – suggests that the war is likely to accelerate the pace of the energy transition. The scale of the economic and social disruptions over the past year associated with the loss of just a fraction of the world’s fossil fuels has also highlighted the need for the transition away from hydrocarbons to be orderly, such that the demand for hydrocarbons falls in line with available supplies, avoiding future periods of energy shortages and higher prices. These issues, together with the broader implications of the energy transition, are explored in this year’s Energy Outlook using three main scenarios: Accelerated, Net Zero and New Momentum. Together these scenarios span a wide range of the possible outcomes for the global energy system over the next 30 years. Understanding this range of uncertainty helps bp to shape a strategy which is resilient to the different speeds and ways in which the energy system may transition. The continuing rise in carbon emissions and the increasing frequency of extreme weather events in recent years highlight more clearly than ever the importance of a decisive shift towards a net-zero future. The events of the past year have highlighted the complexity and interconnectedness of the global energy system and the need to address all three dimensions of the energy trilemma. I hope this year’s Energy Outlook is useful to everyone trying to navigate this uncertain future and accelerate the transition to global net zero. As always, any feedback on the Outlook and how it can be improved would be most welcome. Spencer Dale Chief economist Welcome to the 2023 edition of bp’s Energy Outlook.7 | bp Energy Outlook: 2023 edition 6 | This year’s Outlook can be used to identify aspects of the energy transition that are common across the main scenarios. These trends help shape core beliefs about how the energy system may evolve over the next 30 years. The carbon budget is running out. Despite the marked increase in government ambitions, CO 2 emissions have increased every year since the Paris COP in 2015 (bar 2020). The longer the delay in taking decisive action to reduce emissions on a sustained basis, the greater are the likely resulting economic and social costs. Government support for the energy transition has increased in a number of countries, including the passing of the Inflation Reduction Act in the US. But the scale of the decarbonization challenge suggests greater support is required globally, including policies to facilitate quicker permitting and approval of low-carbon energy and infrastructure. The disruption to global energy supplies and associated energy shortages caused by the Russia- Ukraine war increases the importance attached to addressing all three elements of the energy trilemma: security, affordability, and sustainability. The war has long-lasting effects on the global energy system. The heightened focus on energy security increases demand for domestically produced renewables and other non-fossil fuels, helping to accelerate the energy transition. The structure of energy demand changes, with the importance of fossil fuels declining, replaced by a growing share of renewable energy and by increasing electrification. The transition to a low-carbon world requires a range of other energy sources and technologies, including low-carbon hydrogen, modern bioenergy, and carbon capture, use and storage. Oil demand declines over the outlook, driven by falling use in road transport as the efficiency of the vehicle fleet improves and the electrification of road vehicles accelerates. Even so, oil continues to play a major role in the global energy system for the next 15-20 years. The prospects for natural gas depend on the speed of the energy transition, with increasing demand in emerging economies as they grow and industrialize offset by the transition to lower carbon energy sources, led by the developed world. The recent energy shortages and price spikes highlight the importance of the transition away from hydrocarbons being orderly, such that the demand for hydrocarbons falls in line with available supplies. Natural declines in existing production sources mean there needs to be continuing upstream investment in oil and natural gas over the next 30 years. The global power system decarbonizes, led by the increasing dominance of wind and solar power. Wind and solar account for all or most of the growth in power generation, aided by continuing cost competitiveness and an increasing ability to integrate high proportions of these variable power sources into power systems. The growth in wind and solar requires a significant acceleration in the financing and building of new capacity. The use of modern bioenergy – modern solid biomass, biofuels and biomethane – grows rapidly, helping to decarbonize hard-to- abate sectors and processes. Low-carbon hydrogen plays a critical role in decarbonizing the energy system, especially in hard- to-abate processes and activities in industry and transport. Low-carbon hydrogen is dominated by green and blue hydrogen, with green hydrogen growing in importance over time. Hydrogen trade is a mix of regional pipelines transporting pure hydrogen and global seaborne trade in hydrogen derivatives. Carbon capture, use and storage plays a central role in enabling rapid decarbonization trajectories: capturing industrial process emissions, acting as a source of carbon dioxide removal, and abating emissions from the use of fossil fuels. A range of methods for carbon dioxide removal – including bioenergy combined with carbon capture and storage, natural climate solutions, and direct air carbon capture with storage – will be needed for the world to achieve a deep and rapid decarbonization. Core Beliefs9 | bp Energy Outlook: 2023 edition 8 | Contents Overview 10 Three scenarios: Net Zero, Accelerated and New Momentum 12 Comparison with IPCC pathways 14 Final energy demand 16 Trends in energy demand 18 Changes since Energy Outlook 2022 20 Impacts of the Russia-Ukraine war 22 The effects of the war on economic growth 24 A shifting energy mix 26 Oil and natural gas trade 28 Change in carbon emissions 30 Russian production of oil and gas 32 EU natural gas demand and sources of supply 34 Inflation Reduction Act 36 Oil 38 Oil demand 40 Oil in transport 42 Oil supply 44 Natural gas 46 Natural gas demand 48 LNG trade 50 LNG exports 52 Renewable energy 54 Wind and solar 56 Bioenergy 58 Electricity 60 Electricity demand 62 Electricity generation by fuel 64 Electricity generation by region 66 Low-carbon hydrogen 68 Low-carbon hydrogen demand 70 Low-carbon hydrogen supply 72 Carbon mitigation and removals 74 Carbon capture use and storage 76 Carbon dioxide removals 78 Investment and critical minerals 80 Levels of implied investment 82 Demand for critical minerals 84 Annex 86 Data tables 88 Modelling the impact of the Russia-Ukraine war 90 Economic impact of climate change 92 Investment methodology 94 Carbon emissions definitions and sources 96 Other data definitions and sources 9810 | Three scenarios to explore the uncertainties surrounding the speed and shape of the energy transition to 2050 Accelerated and Net Zero are broadly in line with ‘Paris consistent’ IPCC scenarios Final energy demand peaks in all three scenarios as gains in energy efficiency accelerate The future of global energy is dominated by four trends: declining role for hydrocarbons, rapid expansion in renewables, increasing electrification, and growing use of low-carbon hydrogen 11 | bp Energy Outlook: 2023 edition Overview2000 2010 2020 2030 2040 2050 0 5 10 15 20 25 30 35 40 45    Carbon emissions include CO 2 emissions from energy use, industrial processes, natural gas flaring, and methane emissions from energy production. 12 | Gt of CO 2 e bp’s Energy Outlook 2023 uses three scenarios (Accelerated, Net Zero and New Momentum) to consider a range of possible pathways for the global energy system to 2050 and to help shape a resilient strategy for bp. The scenarios are not predictions of what is likely to happen or what bp would like to happen. Rather, the scenarios are designed to span a wide range of the outcomes possible out to 2050. In doing so, they inform bp’s core beliefs about the energy transition and help shape a strategy that is resilient to the many uncertainties surrounding the speed and nature of the energy transition. The scenarios in this year’s Outlook have been updated to take account of two major developments over the past year: the Russia-Ukraine war and the passing of the Inflation Reduction Act in the US. Aside from updating for those two developments, the scenarios are largely based on the analysis and scenarios in Energy Outlook 2022. The scenarios consider carbon emissions from energy production and use, most non-energy related industrial processes, and natural gas flaring plus methane emissions from the production, transmission, and distribution of fossil fuels (see pages 96-97 of the Annex for more details). Accelerated and Net Zero explore how different elements of the energy system might change in order to achieve a substantial reduction in carbon emissions. In that sense, they can be viewed as ‘what if’ scenarios: what elements of the energy system might need to change if the world collectively takes action for CO 2 -equivalent emissions (CO 2 e) to fall by around 75% by 2050 (relative to 2019 levels) in Accelerated and 95% in Net Zero. Both scenarios are conditioned on the assumption that there is a significant tightening in climate policies. Net Zero also embodies a shift in societal behaviour and preferences, which further supports gains in energy efficiency and the adoption of low-carbon energy. The carbon emissions remaining in Net Zero in 2050 could be eliminated by either additional changes to the energy system or by the deployment of carbon dioxide removal (CDR) (see pages 78-79). This will depend on the costs of CDR and of abating greenhouse gasses emanating from outside the energy system, neither of which are explicitly considered in the Outlook. New Momentum is designed to capture the broad trajectory along which the global energy system is currently travelling. It places weight on the marked increase in global ambition for decarbonization in recent years, as well as on the manner and speed of decarbonization seen over the recent past. CO 2 e emissions in New Momentum peak in the 2020s and by 2050 are around 30% below 2019 levels. 13 | bp Energy Outlook: 2023 edition Key points Carbon emissions Three scenarios to explore the uncertainties surrounding the speed and shape of the energy transition to 2050 Overview Oil Natural gas 1.5°C 2°C Coal -100% -80% -60% -40% -20% 0% IPCC 1.5°C interquartile range    Cumulative CO 2 e emissions in 2015-2050 are the addition of CO 2 emissions from energy and industrial processes, flaring, and methane emissions 1.5°C scenarios with no or limited overshoot and 2°C scenarios with immediate action. See Annex for selection of IPCC scenarios 600 700 800 900 1000 1100 1200 IPCC 10 th - 90 th percentile IPCC 25 th - 75 th percentile 14 | The pace and extent of decarbonization in Accelerated and Net Z