BP : Energy Outlook 2018

Poweraccounts for nearly 70% of the increase in primary energy demand. The mix of fuels used in power generation is set to shift materially, with renewable energy gaining share more quickly than any energy source in history, increasing from 7% today to around a quarter by 2040. Even so, coal remains the largest source of energy in power generation by 2040.

Transportenergy demand grows by only 25% despite total demand for transportation more than doubling, reflecting accelerating gains in vehicle efficiency. The transport sector continues to be dominated by oil (around 85% in 2040), despite increasing penetration of alternative fuels - particularly natural gas and electricity.

This year's Outlook argues that the penetration of electricity in the transport sector is best measured by considering both the number of electric vehicles (EVs) and how intensively each vehicle is used. In the evolving transition scenario, the share of EVs in the global car parc reaches around 15% by 2040 - more than 300 million cars in a car parc of almost 2 billion. However, the share of passenger car kilometres powered by electricity, which also takes account of the intensity with which electric cars are used, is over 30%. The Outlook shows how the interaction of fully-autonomous cars with shared mobility has the potential to substantially boost the intensity with which electric cars are driven.

A key uncertainty in the period to 2040 is the speed with which sales of electric cars increases. To gauge the significance of this uncertainty, the Outlook considers a scenario in which there is a worldwide ban on the sales of cars with internal combustion engines (ICE) from 2040. This scenario reduces liquid fuel demand by around 10 million barrels a day relative to the evolving transition scenario but, even so, the level of oil demand in 2040 in the 'ICE ban' scenario is higher than in 2016.

'The suggestion that rapid growth in electric cars will cause oil demand to collapse just isn't supported by the basic numbers - even with really rapid growth,' explains Dale. 'Even in the scenario where we see an ICE ban and very high efficiency standards, oil demand is still higher in 2040 than it is today.'

Industrialenergy demand, including both combusted and non-combusted uses of fuels, accounts for around half of the increase in energy consumption.

Improving efficiency drives slower growth in industrial energy demand (excluding the non-combusted sector), in large part driven by China's transition towards a less energy-intensive service and consumer-facing sectors. Some of China's slowing growth is likely to be displaced to lower-income economies, including India and Africa.

Non-combusted use of fuels, particularly as feedstocks for petrochemicals, are the fastest growing source of overall demand for oil and gas. Non-combusted use of fuels grows at almost twice the rate of other industrial uses, although increasing environmental pressures on the use of some products, particularly single-use plastics and packaging, dampens growth quite materially relative to past trends. Oil accounts for nearly two-thirds of the growth in non-combusted use of energy, with natural gas providing much of the remainder.