Recently, the British multinational oil and gas company Bp released a report: Bp Energy Outlook 2023, to explore the key trends and uncertainties surrounding the energy transition.
Energy Outlook 2023 focused on three main scenarios: Accelerated, Net Zero, and New Momentum. The three scenarios span a wide range of possible outcomes and help to illustrate the key uncertainties surrounding energy markets out to 2050.
Come and see the highlights of China in this report.
-- The impact of increased energy security concerns on energy trade is most pronounced on oil and natural gas, which are the two most heavily traded fuels. This impact is especially marked in China and India, which currently import between 75%-85% of the oil they use and between 40-55% of their natural gas.
-- Electrification of road vehicles is initially dominated by China, Europe, and North America, which together account for around 60-75% of the growth of electric road vehicles to 2035 in the three scenarios and 50-60% of the growth to 2050
-- Global demand for natural gas rises over the rest of this decade with New Momentum and Accelerated driven by strong growth in China – underpinned by continued coal-to-gas switching – and also by India and other emerging Asia as they industrialize further.
-- From the early 2030s onwards, natural gas demand declines in Accelerated and Net Zero as the sustained decline in its use in the developed world is compounded by falling demand in China and the Middle East, driven by the same patterns of increasing electrification and rapid growth in renewable energy. The decline is only partially offset by the growing use of natural gas to produce blue hydrogen (see pages 72-73). By 2050, natural gas demand is around 40% lower than 2019 levels in Accelerated and 55% lower in Net Zero.
-- Global natural gas demand in New Momentum continues to grow for much of the period out to 2050, driven by growing use in emerging Asia and Africa. Much of this growth is in the power sector as the share of natural gas consumption in power generation in these regions grows and overall power generation increases robustly. Global natural gas demand in New Momentum in 2050 is around 20% above 2019 levels
-- LNG demand in emerging economies also grows for much of the period post2030 in Accelerated and Net Zero, but this is more than offset by sharp falls in LNG imports in developed Asian and European markets and in China, as these regions switch away from natural gas to lower carbon energy sources.
-- The growth in installed wind and solar capacity out to 2035 is dominated by China and the developed world, each of which accounts for 30-40% of the overall increase in capacity in all three scenarios. This pattern of growth switches significantly in the second half of the outlook, with emerging economies excluding China accounting for around 75-90% of the growth in the 2040s in Accelerated and Net Zero.
-- Nuclear power generation increases by around 80% by 2050 in Accelerated and more than double in Net Zero. Investment in new nuclear capacity is concentrated in China – which accounts for 50-65% of the growth in nuclear power in Accelerated and Net Zero – supported by new capacity in other emerging economies and an extension of lifetimes and restarting of existing plants in some developed economies.
-- The increasing dominance of low-carbon energy, together with the use of CCUS, cause carbon emissions from power generation in Accelerated to fall by around 55% by 2035 and to be virtually eliminated by 2050. The reduction in the carbon intensity of global power generation over the first part of the outlook is led by the developed world and China, with emerging economies catching up over the second half of the period.
-- Growth in wind and solar generation over the rest of this decade is dominated by China and the developed world, which together accounts for 80-85% of the growth in wind and solar power out to 2030 in the three scenarios.
-- The move to decarbonize the power sector causes coal-fired generation to decrease markedly in all regions in Accelerated and Net Zero. The use of coal is more persistent in New Momentum, with a small increase in coal generation in China and other emerging economies over the rest of this decade. But that rise is more than reversed by a sharp fall in Chinese coal generation in the final 20 years of the outlook. At a global level, the fall in a total coal-fired generation is dominated by China, which explains around half of the total decline in Accelerated and Net Zero and more than the total in New Momentum.
-- In Accelerated and Net Zero, the deployment of CCUS with natural gas is spread broadly equally across the use of natural gas to produce blue hydrogen, to abate emissions in the power sector, and to capture emissions from the combustion of gas in industry. The greatest use of CCUS with natural gas occurs in the US, followed by the Middle East, Russia, and China – which combined account for around two-thirds of CCUS deployed with natural gas in 2050 in Accelerated and Net Zero.
-- The vast majority of CCUS with coal is used in regions with relatively new coal-based assets in the power and steel sectors, largely in emerging Asia, led by China.
-- In Accelerated and Net Zero, over 70% of the global deployment of CCUS in 2050 is in emerging economies, led by China and India. This requires a very rapid scale-up of CCUS in these countries relative to their historical oil and gas production levels, which can be used as an indicator of the geological suitability and engineering capability to develop industrial scale CCUS facilities.