Foreword from Spencer Dale

Welcome to the 2024 edition of bp’s Energy Outlook

Global developments and events in recent years have highlighted the considerable challenges facing the global energy system and those of us who work within it.

Despite marked increases in government climate ambitions and actions, and rapid growth in investment in low carbon energy, carbon emissions continue to rise. Indeed, other than the Covid-induced fall of 2020, carbon emissions have risen every year since the Paris climate goals were agreed in 2015. The carbon budget is running out.

The world is in an ‘energy addition’ phase of the energy transition in which it is consuming increasing amounts of both low carbon energy and fossil fuels. The history of energy has seen several past phases of ‘energy additions’, for example the rapid increase in coal as the world shifted from the use of wood as its primary energy source to coal, and later the sharp increases in oil as it displaced coal as the dominant energy form. But in each of these cases, the world continued to consume similar or greater amounts of all types of energy.

From ‘energy addition’ to ‘energy substitution’ 

The challenge is to move – for the first time in history – from the current energy addition phase of the energy transition to an ‘energy substitution’ phase, in which low carbon energy increases sufficiently quickly to more than match the increase in global energy demand, allowing the consumption of fossil fuels, and with that carbon emissions, to decline.The longer it takes for the world to move to a rapid and sustained energy transition, the greater the risk of a costly and disorderly adjustment pathway in the future.

The challenge posed by the energy transition is further complicated by the repercussions of the energy disruptions and shortages caused by the war in Ukraine. These disruptions, and the economic and social costs they entailed, served as a reminder to us all that the transition also needs to consider the security and affordability of energy.

I realise that the concept of the energy trilemma – the importance of energy systems providing energy which is secure and affordable as well as sustainable – has been discussed and used for many years. But its relevance has never been greater: any successful and enduring transition needs to address all three elements of the trilemma.

Exploring energy challenges through two scenarios

These challenges, together with the broader implications of the shifts and trends underway in the global energy system, are explored in this year’s Outlook using two main scenarios: Current Trajectory and Net Zero. Together these scenarios span a wide range of the possible outcomes for the global energy system over the next 25 years. It is possible to use these scenarios to identify energy trends that are common across both scenarios and those that are more dependent on the pace of the transition. This can help inform judgements of how the energy system may evolve over coming decades.

The two scenarios can also be compared to give a clearer sense of what needs to be done to shift the world from its current unsustainable emissions trajectory to a pathway consistent with the Paris climate goals. Spoiler alert: amongst other things, this suggests a need for greater electrification fuelled by even faster growth in wind and solar power, a significant acceleration in energy efficiency improvements, together with increasing use of a whole range of other low carbon energy sources and technologies, including biofuels, low carbon hydrogen, and carbon capture, use and storage (CCUS).

I hope this year’s Energy Outlook is useful to everyone trying to tackle the challenges facing the global energy system and accelerate the transition to global net zero.

As always, any feedback of the Outlook and how it can be improved would be most welcome.

Spencer Dale

Chief economist
July 2024