Oil and gas giant BP says renewable energy will rapidly become the world’s main source of power within the next 20 years, as the planet shifts towards a lower carbon future.
"The pace at which renewable energy penetrates the global energy system is faster than for any fuel in history," BP said in its latest annual Energy Outlook report.
The report looked at a number of scenarios for changing energy demand globally, and said in all forecasts there will be a massive boom in demand and more generation will be needed to supply it.
"The increase in energy over and above the evolving transition scenario is roughly the equivalent of China's entire energy consumption in 2017," it said.
BP said in all scenarios wind and solar will play an increasing role in keeping the lights on. But oil and gas will remain key fuels in the energy mix, with consumption peaking in the 2030s before demand falls off.
While coal demand will flatten in BP's least energy transformation aggressive scenario, the use of coal will see a sharp contraction in all other scenarios.
“The world of energy is changing. Renewables and natural gas together account for the great majority of growth in primary energy,” BP chief economist Spencer Dale said.
“In our evolving transition scenario, 85 per cent of new energy is lower carbon.”
BP chief executive Bob Dudley said the transition to renewables is inevitable.
“This outlook again brings into sharp focus just how fast the world’s energy systems are changing and how the dual challenge of more energy with fewer emissions is framing the future. Meeting this challenge will undoubtedly require many forms of energy to play a role,” Mr Dudley said.
“Predicting how this energy transition will evolve is a vast, complex challenge. In BP, we know the outcome that’s needed but we don’t know the exact path the transition will take.”
Renewable power in Australia now accounts for a fifth of all energy generated, the first time it has done so since the 1970s.
The latest Green Energy Markets report says renewable power levels punched through the 20 per cent market share threshold in 2018, although coal still accounts for more than 70 per cent of Australian power, leading to high carbon emissions from the energy sector.
Mr Dudley said strong leadership on energy policy - aimed at electricity generation - is needed from governments to ensure carbon emissions are reduced in line with the global Paris Agreement targets.
“Policies aimed at the power sector are central to achieving a material reduction in carbon emissions over the next 20 years,” Mr Dudley said.
He has also previously called for a price on carbon to drive down emissions created by the electricity industry.
“Put a price on carbon and you incentivize everyone to use less energy,” Mr Dudley said.
Fellow energy giant Shell's Australian chairman Zoe Yujnovich also made calls this week for a carbon price.
"Part of the role for government will be to encourage consumers and businesses into lower carbon choices," Ms Yujnovich said, "perhaps through government-led carbon-pricing mechanisms that avoid the pitfalls of previous designs."
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