Spencer DaleGroup chief economist

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Three scenarios to explore the energy transition

-5

0

5

10

15

20

25

30

35

40

1980 1990 2000 2010 2020 2030 2040 2050

Rapid

Net Zero

Business-as-usual

IPCC 2°C Median

IPCC 1.5°C Median

Well below 2°C

1.5°C

CO2 emissions from energy use

Gt of CO2

Ranges show 10th and 90th percentiles of IPCC scenarios, see pp 150-151 of Energy Outlook for more details

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Changing structure of global energy demand

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2018 2025 2030 2035 2040 2045 2050

Rapid

Net zero

Business-as-usual

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2018 2025 2030 2035 2040 2045 2050

Fossil fuels Renewables* Electricity

Share of total final consumption

0%

10%

20%

30%

40%

50%

60%

2018 2025 2030 2035 2040 2045 2050

Shares of primary energy Shares of primary energy

*Renewables includes wind, solar, geothermal, biomass, biomethane and biofuels and excludes large-scale hydro

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Changing structure of global energy system

0%

20%

40%

60%

80%

100%

1900 1915 1930 1945 1960 1975 1990 2005 2020 2035 2050

Oil

Coal

Natural gas

Other non-fossil fuels*

Renewables

Shares of primary energy in Rapid

*Nuclear and hydroelectricity

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Alt case*: Greater impact from Covid-19

Impact of Covid-19 in Rapid

-12%

-10%

-8%

-6%

-4%

-2%

0%

2025 2050 2025 2050

GDP

Primary energy

Oil demand

% change as a result of Covid-19

*Alternative case showing the impact if Covid-19 leads to higher economic losses

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Oil consumption

Outlook for oil demand

Change in oil demand, 2018-2050

0

20

40

60

80

100

120

2000 2010 2020 2030 2040 2050

Rapid

Net Zero

Business-as-usual

-80

-70

-60

-50

-40

-30

-20

-10

0

10

Rapid Net Zero Business-as-usual

Non-transport

Othertransport³

Otherroad²

Passengercars¹

Mb/d Mb/d

1) includes 2/3 wheelers2) trucks and buses3) aviation, marine and rail

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Share of car and truck VKM1 electrified2 Robotaxi share of passenger car VKM1

powered by electricity

Mobility revolution: electrification, shared-mobility and autonomy

0%

25%

50%

75%

100%

2020 2025 2030 2035 2040 2045 2050

Rapid

Net Zero

Business-as-usual

0%

10%

20%

30%

40%

50%

60%

2020 2025 2030 2035 2040 2045 20501) vehicle kilometres2) includes buses

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Natural gas consumption

Outlook for natural gas

0

1000

2000

3000

4000

5000

6000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Rapid

Net Zero

Business-as-usual

Bcm

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

-30%

-20%

-10%

0%

10%

20%

30%

40%

2018 2025 2030 2035 2040 2045 2050

Non-fossil* Oil Coal Natural gas

Rapid vs. Business-as-usual: India and Other Asia

Supporting role of natural gas

Differences in shares of primary energy

*Renewables, nuclear and hydroelectricity

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Rapid

Net Zero

Business-as-usual

0%

2%

4%

6%

8%

10%

2050

Bluehydrogen²

Directenergyuse

Share of natural gas abated1 and unabated

Natural gas as a source of near-zero carbon energy

Natural gas with CCUS as a share of

primary energy

Rapid Net ZeroBusiness-as-usual

0%

20%

40%

60%

80%

100%

2050

Unabated

Abated¹

1) Direct use of natural gas with CCUS plus natural gas as input to blue hydrogen 2) Blue hydrogen is extracted from natural gas (or coal), with the carbon dioxide by-product being captured via CCUS.

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Renewable energy used in power sector*

Renewable energy in power

Cost of wind and solar energy

Rapid

Net Zero

Business-as-usual

0

50

100

150

200

250

300

350

400

2018

Geothermal& biomass

Solar

Wind

2050

0%

20%

40%

60%

80%

100%

2018 2025 2030 2035 2040 2045 2050

Rapid

Net Zero

Business-as-usual

Wind

Solar

EJ 100% = 2018 price

*On a primary energy basis (see Energy Outlook p154 for more details)

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

0

200

400

600

800

1000

1200

2015 2018 2025 2030 2035 2040 2045 2050

Average annual increase in wind and solar capacity

Wind and solar capacity

Average annual investment in wind and solar

0

200

400

600

800

1000

2000 -2005

2010 -2015

2018 -2025

2030 -2035

2040 -2045

Rapid

Net Zero

Business-as-usual

GW Five-year rolling average, 2018 US$ Billion

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Share of electricity in total final consumption

Electricity demand

Change in electricity demand by sector, 2018-2050

0%

10%

20%

30%

40%

50%

60%

2000 2010 2020 2030 2040 2050

Rapid

Net Zero

Business-as-usual

0

5000

10000

15000

20000

25000

Rapid Net Zero Business-as-usual

Building

s

TWh

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

2000 2010 2020 2030 2040 2050

Wind &solarCoal

0%

10%

20%

30%

40%

50%

60%

70%

2000 2010 2020 2030 2040 2050

Global power generation

Share of global power generation by energy source

Rapid

2000 2010 2020 2030 2040 2050

Net Zero Business-as-usual

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Technologies to help balance the power sector

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Hydrogen use by sector

Consumption and production of hydrogen

Hydrogen production by type

Rapid Net Zero

0

10

20

30

40

50

60

70

2035 2050 2035 2050

Power

Transport

Buildings

Industry

EJ EJ

Rapid Net Zero

0

10

20

30

40

50

60

70

2035 2050 2035 2050

GreyHydrogen¹

BlueHydrogen²

GreenHydrogen³

1) produced from natural gas (or coal), without CCUS.2) produced from natural gas (or coal) with CCUS3) made by electrolysis, using renewable power

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Wind and solar capacity

0

200

400

600

800

1000

1200

1400

2000 -2005

2005 -2010

2010 -2015

2015 -2018

2018 -2025

2025 -2030

2030 -2035

2035 -2040

2040 -2045

2045 -2050

Rapid

Business-as-usual

Net Zero

Net Zero with 100%green hydrogen

Annual average increase in wind and solar capacity

GW

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Bioenergy in Rapid and Net Zero

Rapid Net Zero

0%

2%

4%

6%

8%

10%

By sector By type By sector By type

BiomethaneBiomassBiofuelsHydrogenPowerBuildingsIndustryTransport

Shares of primary energy

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Key questions

1. What DO we know?

2. How has Covid-19 affected the outlook?

3. How might oil demand be affected by the mobility revolution?

4. What role could natural gas play in the energy transition?

5. Just how quickly will renewables grow over time?

6. How will electricity and power markets shape the future?

7. What role for hydrogen and bioenergy?

8. What are the dangers of delaying the energy transition?

© BP p.l.c. 2020 Energy Outlook | bp week: September 2020

Carbon emissions

Delayed and Disorderly scenario

Primary energy consumption

0

100

200

300

400

500

600

700

800

2010 2015 2020 2025 2030 2035 2040 2045 2050

Rapid

Delayed and Disorderly (before rationing)

Delayed and Disorderly

0

10

20

30

40

2010 2015 2020 2025 2030 2035 2040 2045 2050

Rapid

Business-as-usual

Delayed and Disorderly

Gt of CO2 EJ

Spencer DaleGroup chief economist