BP Report: Renewables, Biofuels Fastest Growing Energy Sources through 2030

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The period up to 2030 should see increased fuel-switching, with more gas and renewable use at the expense of coal and oil, says BP plc's (NYSE:BP) (London, England) Energy Outlook. The gradual switching should see renewables, including biofuels, continue to be the fastest growing sources of energy globally, rising at an annual rate of more than 8%, much quicker than natural gas, which will be the fastest-growing fossil fuel, at an annual rate of 2% over the period.

Overall global energy will remain dominated by fossil fuels, which are forecast to account for 81% of energy demand by 2030, which shows a decrease of about 6% from current levels. Global energy demand is likely to grow 39% (1.6% annually) over the period, and that growth will be almost entirely in non-OECD countries. Consumption in OECD (Organization for Economic Cooperation and Development) countries is expected to increase 4% by 2030. Growth will be fuelled by economic and population growth in non-OECD countries, accompanied by increased energy efficiency and the strong growth in renewables.

The growth of unconventional supplies, including U.S. shale oil and gas, Canadian oil sands and Brazilian deep waters, set against a gradual decline in oil demand, will see the Western Hemisphere become almost totally energy sufficient by 2030. This, says the Energy Outlook, means that growth in the rest of the world, principally Asia, will depend increasingly on the Middle East in particular for growing oil requirements.

Oil, today's leading fuel, will continue to lose market share throughout the period, although demand for hydrocarbon liquids will still reach 103 million barrels a day in 2030, up 18% from 2010. Enough liquids will still have to be brought on to meet the 16 million barrels a day of extra demand and replace declining output from existing sources. The liquid sources will be oil, biofuels and others.

Coal will continue to gain market share through 2020, but will then wane through 2030 and gas growth will remain steady. Non-fossil fuels are likely to contribute nearly 50% of growth after 2020.

Power generation will be the fastest-growing user of energy in the period and will account for more than 50% of the total growth in primary energy use. The greatest changes in the fuel mix are expected in the power sector. Renewables, nuclear and hydropower should account for more than 50% of growth in the power sector.

Transportation will probably be the slowest growing sector for global energy consumption. Strong growth in vehicle sales in emerging markets will be partially offset by improvements in fuel efficiency and various forms of hybrids. By 2030, oil will account for 87% of transport sector energy use, down from 95% currently. Biofuels will fill most of the gap.

The report says that global CO2 emissions are likely to increase about 28% by 2030 which is slower than the current rate of energy demand growth of renewable and natural gas. If more aggressive policies than currently envisioned are introduced, global CO2 emissions could begin to decline by 2030.

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