Energy Outlook 2023 by bp

Energy Outlook 2023
Russian energy supply disruptions and global energy shortages show an economic, social, and climatic impact on the energy system.


Energy Outlook 2023

The British oil company bp presented the Energy Outlook 2023, which analyzed the consequences of disrupting the world’s energy supply due to the Russian-Ukrainian war. The repercussion on world prices and the impact on the energy transition set in motion by the Paris Agreements were the main topics at the conference.


Energy transition

Accelerating climate change has led governments worldwide to look for ways to reverse the damage. Global energy policies and debates have focused on decarbonizing the energy system and transitioning to renewable energy. The war and its aftermath reminded the world of the importance of energy security and affordability. Spencer Dale, the chief economist at bp, commented: “Any successful and lasting energy transition must address all three elements of the trilemma.” Security, affordability, and sustainability comprise the three dimensions of the energy system trilemma.


Scenario for change

Because anyone cannot yet predict the future, bp used three scenarios in the Energy Outlook 2023. These scenarios are Accelerated, Net Zero, and New Momentum, which consider different pathways for the global energy system to achieve environmental commitments up to 2050.

The scenarios are not designed to predict events. Instead, they encompass a wide range of possible outcomes to inform the company’s fundamental beliefs about the energy transition. They also help create a resilient strategy for industry and energy transition uncertainties.


On the other hand, four trends characterize the changing forms of energy demand:
  • First is the gradual decline of the role of hydrocarbons. Care for the environment and concern for it has led to a decrease in the demand for hydrocarbons. It is planned to reduce primary energy from 80% in 2019 to an average of between 55% and 20% in 2050. Across the three scenarios, the total consumption of fossil fuels will decrease.
  • The rapid growth of renewable energy is the second trend. Wind, solar, bioenergy, and geothermal, among others, are expanding rapidly because they compensate for the simplified role of fossil energies. Unlike hydrocarbons, renewables in global primary energy will increase from 10% in 2019 to between 35% and 65% in 2050. Improving the cost competitiveness of these energies and promoting policies aimed at low-carbon energy will drive the transition.
  • The third is the increasing electrification of the world. In conjunction with renewables, electrification of the energy system will add up to achieving the commitments made. Total final energy consumption will rise from one-fifth in 2019 to two-thirds in 2050.
  • And finally, low-carbon hydrogen in processes and activities that are difficult to electrify. Using green and blue hydrogen will help decarbonize those industries that are difficult to electrify, such as long-distance transport. In addition, the primary energy used in low-carbon hydrogen production will increase between 13% and 21% by 2050.
Worlwide cooperation

There must be cooperation between countries, governments, and private companies in the energy transition to accelerate the work. Governments must help create policies to engage investors.

An example is the Inflation Reduction Act in the United States, which provides private and state-owned companies financing to continue innovating and expanding environmental commitment.

Even with this, the IRA is not globally supportive and is one of the challenges we seek to change to produce the ecological transition faster but with more order.


It can be of your interest: Funding in Support by DOE for hydrogen technologies

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