bp Energy Outlook
2023 edition2 |
Energy Outlook Energy Outlook 2023 is focused on three main scenarios: Accelerated,
Net Zero and New Momentum. These scenarios are not predictions
2023 explores of what is likely to happen or what bp would like to happen. Rather
they explore the possible implications of different judgements and
the key trends assumptions concerning the nature of the energy transition and the
and uncertainties uncertainties around those judgements. The scenarios are based
on existing technologies and do not consider the possible impact of
surrounding theentirely new or unknown technologies.
energy transition. The many uncertainties surrounding the transition of the global energy
system mean that the probability of any one of these scenarios
materializing exactly as described is negligible. Moreover, the three
scenarios do not provide a comprehensive range of possible paths for
the transition ahead. They do, however, span a wide range of possible
outcomes and so help to illustrate the key uncertainties surrounding
energy markets out to 2050.
The scenarios in this year’s Outlook have been updated to take account
of two major developments over the past year: the Russia-Ukraine
war and the passing of the Inflation Reduction Act in the US. Aside
from updating for those two developments, the scenarios are based
largely on the analysis and scenarios in Energy Outlook 2022. They
do not include a comprehensive assessment of all the changes and
developments since Outlook 2022.
The Energy Outlook is produced to inform bp’s strategy and is
published as a contribution to the wider debate about the factors
shaping the energy transition. But the Outlook is only one source
among many when considering the future of global energy markets
and bp considers a wide range of other external scenarios, analysis and
information when forming its long-term strategy.
3 | bp Energy Outlook: 2023 edition4 |
From an energy perspective, the Last year’s Energy Outlook did
disruptions to Russian energy not include any analysis of the
supplies and the resulting global possible implications of the war in
energy shortages seem likely to Ukraine. The scenarios in Outlook
have a material and lasting impact 2023 have been updated to take
on the energy system.account of the war, as well as
of the passing of the Inflation
Global energy policies and
Reduction Act in the US.
discussions in recent years have
been focused on the importance At the time of writing, the war
of decarbonizing the energyis continuing with no end in
system and the transition to net sight. As such, any analysis of
Welcome to the zero. The events of the past year its possible implications must be
have served as a reminder to us treated as preliminary. However,
2023 edition of bp’s all that this transition also needs the experience from the major
Energy Outlook to take account of the security energy supply shocks of the
. and affordability of energy.1970s suggests that events
The past year has beenTogether these three dimensions that heightened energy security
dominated by the terrible of the energy system – security, concerns can have significant
consequences of the Russia-affordability, and sustainability – and persistent impacts on energy
Ukraine war and its awful toll make up the energy trilemma.markets.
on lives and communities. Our Any successful and enduring
thoughts and hopes are with all energy transition needs to
those affected.address all three elements of the
trilemma.
Most importantly, the desireThese issues, together with the interconnectedness of the global
of countries to bolster their broader implications of the energy energy system and the need to
energy security by reducing their transition, are explored in this address all three dimensions of
dependency on imported energy year’s Energy Outlook using three the energy trilemma. I hope this
– dominated by fossil fuels – and main scenarios: Accelerated,year’s Energy Outlook is useful to
instead have access to moreNet Zero and New Momentum. everyone trying to navigate this
domestically produced energy – Together these scenarios spanuncertain future and accelerate
much of which is likely to come a wide range of the possiblethe transition to global net zero.
from renewables and other non- outcomes for the global energy
As always, any feedback on
fossil energy sources – suggests system over the next 30 years.
the Outlook and how it can
that the war is likely to accelerate Understanding this range of
be improved would be most
the pace of the energy transition. uncertainty helps bp to shape
welcome.
a strategy which is resilient to
The scale of the economic and
the different speeds and ways
social disruptions over the past
in which the energy system may
year associated with the loss of
transition.
just a fraction of the world’s fossil
fuels has also highlighted the The continuing rise in carbon
need for the transition away from emissions and the increasing
hydrocarbons to be orderly, such frequency of extreme weather
Spencer Dale
that the demand for hydrocarbons events in recent years highlight
falls in line with available supplies, more clearly than ever the Chief economist
avoiding future periods of energy importance of a decisive shift
shortages and higher prices.towards a net-zero future. The
events of the past year have
highlighted the complexity and
5 | bp Energy Outlook: 2023 edition6 |
Core Beliefs
This year’s Outlook can be used the decarbonization challenge The structure of energy demand
to identify aspects of the energysuggests greater support ischanges, with the importance of
transition that are common acrossrequired globally, including policies fossil fuels declining, replaced by a
the main scenarios. These trends to facilitate quicker permitting and growing share of renewable energy
help shape core beliefs about howapproval of low-carbon energy andand by increasing electrification.
the energy system may evolve overinfrastructure.The transition to a low-carbon
the next 30 years.world requires a range of other
The disruption to global energyenergy sources and technologies,
supplies and associated energy
The carbon budget is runningincluding low-carbon hydrogen,
shortages caused by the Russia-
out. Despite the marked increase modern bioenergy, and carbon
Ukraine war increases the
in government ambitions, CO capture, use and storage.
2 importance attached to addressing
emissions have increased every
all three elements of the energy Oil demand declines over the
year since the Paris COP in 2015
trilemma: security, affordability, outlook, driven by falling use in
(bar 2020). The longer the delay
and sustainability. road transport as the efficiency
in taking decisive action to reduce
of the vehicle fleet improves and
emissions on a sustained basis,
The war has long-lasting effectsthe electrification of road vehicles
the greater are the likely resulting
on the global energy system. accelerates. Even so, oil continues
economic and social costs.
The heightened focus on energy to play a major role in the global
security increases demand for
Government support for the energy system for the next 15-20
domestically produced renewables
energy transition has increased in a years.
and other non-fossil fuels, helping
number of countries, including the
to accelerate the energy transition.
passing of the Inflation Reduction
Act in the US. But the scale of
The prospects for natural gas The global power system hydrogen is dominated by green
depend on the speed of the energydecarbonizes, led by the increasing and blue hydrogen, with green
transition,