“The reality is that the world is set to need more energy, not less energy,” BP’s chief executive Bernard Looney said last week, explaining why the company he leads aims to grow its low-carbon energy businesses and reach net-zero emissions by 2050 or sooner. Looney’s assessment that the world will need more energy is not just a talking point for a company that continues to pump oil and gas even as it has pledged to become a net-zero business within three decades. Every forecast today, from BP to the International Energy Agency (IEA), envisages growing primary energy consumption in the world through 2050.
Global economic growth, urbanization, increased access to electricity, and basic clean cooking technology for billions of people in developing countries, as well as energy demand growth in developing nations to bridge the inequalities compared to readily available first-world access to energy, are all set to drive higher primary energy consumption by 2050.
Despite their rapid growth, renewables and zero-carbon technologies are not yet capable of meeting all that growing energy demand. This leaves more room for fossil fuels to meet the remaining energy consumption growth, and in turn, complicates the efforts of the world and energy companies to reduce emissions and eventually, possibly, reach net-zero.
Is Emissions Reduction Possible Without Major Disruption?
The greatest challenge ahead is to reduce emissions while ensuring at the same time enough energy supply to the world without disrupting economies and people’s lives.
Sure, the easiest way to cut emissions is to cut oil and gas production and consumption. However, considering that fossil fuels still account for over 80 percent of the global energy mix, reducing fossil fuel use now will greatly disrupt the way of life of billions of people, whereas low-carbon energy sources will not be even close to meeting the demand gap that fossil fuels would have left.
“The challenge is to reduce emissions without causing massive disruption and damage to everyday lives and livelihoods,” BP said in its Statistical Review of World Energy 2021 published earlier in July.
Due to the pandemic, global primary energy consumption slumped by 4.5 percent to 556.63 Exajoules (EJ) in 2020, the largest decline since the end of World War II, BP’s statistical review showed.
Energy Demand Returns To Growth After 2020 Pandemic Hit
But the decline is likely a one-off event because energy consumption is already recovering and set to continue to grow. In the 2009-2019 decade, the annual growth rate in primary energy consumption was 1.9 percent, per BP’s estimates.
According to calculations from Reuters’ columnist John Kemp, if primary energy consumption continues to grow at roughly the same rate as in the past decade, global energy demand will have risen by 75 percent in 2050 compared to 2019.
This higher energy consumption will need greater efforts to reach net-zero emissions, especially considering the fact even surging renewables capacity is unable to meet rising electricity demand. That’s an assessment of the IEA, which suggested in the bombshell report in May that net-zero 2050 wouldn’t need any new oil, gas, and coal investments after 2021.
Net-zero will also need greater efforts to boost energy efficiency, the IEA said last month. Higher energy efficiency will be critical to possibly reaching net-zero, the agency notes. Still, higher energy efficiency is unlikely to offset the growth in energy consumption.
Returning growth in energy demand is already wiping out the progress in carbon emissions reduction from last year, which was primarily due to the low energy demand, not to a groundbreaking conscious global effort to reduce emissions.
Carbon emissions from energy use fell by 6.3 percent in 2020, to their lowest level since 2011. As with primary energy, this was the largest decline since 1945, BP said in its statistical review.
“From a historical perspective, the falls in energy demand and carbon emissions are obviously dramatic. But from a forward-looking perspective, the rate of decline in carbon emissions observed last year is similar to what the world needs to average each and every year for the next 30 years to be on track to meet the Paris climate goals,” said BP.
“There are worrying signs that last year’s COVID-induced dip in carbon emissions will be short-lived as the world economy recovers and lockdowns are lifted. The challenge is to achieve sustained, comparable year-on-year reductions in emissions without massive disruption to our livelihoods and our everyday lives,” BP’s Looney said in the introduction to the statistical review.
Universal Access To Electricity Still Elusive
Despite the enormous growth in renewables and progress in recent years, as many as 759 million people still live without electricity, a report by the
IEA, the International Renewable Energy Agency (IRENA), the UN Department of Economic and Social Affairs (UN DESA), the World Bank, and the World Health Organization (WHO) showed last month.
“Despite accelerated progress in recent years, the SDG target of universal access by 2030 appears unlikely to be met, leaving an estimated 660 million without electricity, especially if the COVID-19 pandemic seriously disrupts electrification efforts,” according to the report.
Moreover, the share of the global population without access to clean cooking fuels and technologies was 66 percent in 2019, leaving almost three billion people or one-third of the global population without access, the report found.
Access to basic energy needs for billions of people is unlikely to be met by renewable energy only, as inequality in sustainable energy supply persists. But bridging the gap in the developed-developing economies inequality will continue to drive global energy consumption higher, even if energy demand in the most industrialized nations stagnates. This will need much greater, more focused, and more coordinated efforts from every stakeholder in the energy industry – from energy firms and consumers to agencies suggesting no new fossil fuel investments – to reduce emissions.
By Tsvetana Paraskova for Oilprice.com
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