Marcel Kooter is an experienced business leader specializing in commercial strategies for the oil industry. Working across both B2C and B2B business models, Mr Kooter is a strong advocate for the transition from fossil fuel-derived energy to renewables. This article will look at the BP Energy Outlook 2023 report, which explores trends and uncertainties surrounding the energy transition.
The report explores different scenarios and their possible outcomes for the global energy market over the next three decades.
Key themes addressed in the BP Energy Outlook 2023 include:
- An increase in government support for the energy transition in several countries, including the passing of the Inflation Reduction Act in the United States. However, the sheer scale of the decarbonization challenge demands greater support, including government policies to facilitate quicker approval of low-carbon energy and infrastructure.
- A lack of progress in reducing carbon emissions. Despite a marked increase in government programs, CO2 emissions have continued to increase each year since Paris COP in 2015, with the exception of 2020. The longer the delay in global action to reduce greenhouse gas emissions, the greater the likely resulting social and economic costs.
- Disruptions in global energy supplies and energy shortages caused by the war in Ukraine, highlighting the importance of addressing all three elements of the energy trilemma, namely: energy security, affordability, and lower carbon energy.
- Predictions that the war in Ukraine will have a lasting impact on the global energy system, with heightened focus on energy security and increased demand for domestically produced renewables.
- Falling oil demand over the period assessed in the outlook, largely driven by accelerated electrification of road vehicles and improvements in electric vehicle fleets.
- The decarbonization of the global power system led by the increasing dominance of sustainable energy sources such as solar and wind power. Today, solar and wind power account for the majority of growth in power generation, aided by improving cost competitiveness along with an increasing ability to integrate high concentrations of variable power sources into energy systems.
- Carbon capture, storage and use, which will play a central role in enabling rapid decarbonization trajectories, serving as a means of carbon dioxide removal, abating emissions from use of fossil fuels, and capturing industrial process emissions.
The BP Energy Outlook report explores possible paths for the transition from fossil fuels to sustainable energy, spanning a wide range of possible outcomes and illustrating key uncertainties predicted to affect global energy markets over the course of the next 30 years.