Energy Outlook 2020 - BP

1 Energy Outlook2020 edition3 | bp Energy Outlook : 2020 edition2 |The Energy Outlook explores the forces shaping the global Energy transition out to 2050 and the key uncertainties surrounding that transitionThe Energy Outlook considers a number of different scenarios. These scenarios are not predictions of what is likely to happen or what bp would like to happen. Rather they explore the possible implications of different judgements and assumptions concerning the nature of the Energy transition. The scenarios are based on existing and developing technologies which are known about today and do not consider the possibility of entirely new or unknown technologies emerging.

2 Much of the analysis in the Outlook is focussed around three scenarios: Rapid, Net Zero and Business-as-usual. The multitude of uncertainties means that the probability of any one of these scenarios materializing exactly as described is negligible. Moreover, the three scenarios do not provide a comprehensive description of all possible outcomes. However, the scenarios do span a wide range of possible outcomes and so might help to inform a judgement about the uncertainty surrounding Energy markets out to 2050. The Energy Outlook is produced to inform bp s analysis and strategy and is published as a contribution to the wider debate.

3 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 analysis and information when forming its long-term | bp Energy Outlook : 2020 edition4 |In February of this year, bp announced a new purpose to reimagine Energy for people and our planet. This purpose was supported by a new ambition, to be a net-zero company by 2050 or sooner and to help get the world to net new purpose and ambition are underpinned by four fundamental judgements about the future.

4 That the world is on an unsustainable path and its carbon budget is running out. That Energy markets will undergo lasting change, shifting towards renewable and other forms of zero- or low-carbon Energy . That demand for oil and gas will be increasingly challenged. And that, alongside many others, bp can contribute to the Energy transition that the world wants and needs, and create value doing August, we set out a new strategy in support of this purpose and ambition. It will see bp transform from an International Oil Company focused on producing resources to an Integrated Energy Company focused on delivering solutions for customers.

5 From IOC to IEC. And while the Covid-19 pandemic has had a huge impact on the global economy and Energy markets, it has not affected our belief in and commitment to our purpose, ambition and strategy. That belief and commitment is in no small part down to the objective analysis that goes into every edition of the Energy Outlook . It does not to try to predict precise future outcomes any attempt to do that is doomed to fail. Instead, it helps us to understand the many uncertainties ahead in the near and longer term by considering a range of possible pathways the Energy transition may take over the next 30 years.

6 This year s Outlook explores three main scenarios Rapid, Net Zero and Business-as-usual which span a wide range of possible outcomes. Those three scenarios have helped us to develop a strategy that we think is robust to the uncertainty around the pace and nature of the Energy features are common across those scenarios and they form a set of core beliefs as to how Energy demand is likely to change over the next three decades: Renewable Energy will play an increasingly important role in meeting the world s growing Energy needs.

7 Customers will continue to redefine mobility and convenience, underpinned by the mobility revolution that is already underway combining electric vehicles, shared mobility and autonomy. Oil and gas while remaining needed for decades will be increasingly challenged as society shifts away from its reliance on fossil fuelsAnd those core beliefs lead us to three more about how the Energy system will change out to 2050: The Energy mix will become more diverse, driven increasingly by customer choice rather than resource availability.

8 Markets will need more integration to accommodate this more diverse supply and will become more localized as the world electrifies and the role of hydrogen expands. Countries, cities and industries will increasing want their decarbonized Energy and mobility needs met with bespoke solutions, shifting the centre of gravity of Energy markets towards consumers and away from traditional upstream Energy Outlook has been tracking and analysing the trajectory of the world s Energy system for the past 10 years. This year s Outlook has been instrumental in the development of the new strategy we announced in August.

9 I hope it is useful to everyone else seeking ways to accelerate the Energy transition and get to net zero. We welcome any feedback on the content and how we can improve. Bernard Looney chief executive officerWelcome to the 2020 edition of bp s Energy Outlook7 | bp Energy Outlook : 2020 edition6 |Executive summary Global Energy demand continues to grow, at least for a period, driven by increasing prosperity and living standards in the emerging world. Significant inequalities in Energy consumption and access to Energy persist.

10 The structure of Energy demand is likely to change over time: declining role of fossil fuels, offset by an increasing share of renewable Energy and a growing role for electricity. These changes underpin core beliefs about how the structure of Energy demand may change. A transition to a lower carbon Energy system is likely to lead to fundamental restructuring of the global Energy system, with a more diverse Energy mix, greater consumer choice, more localized Energy markets, and increasing levels of integration and competition. These changes underpin core beliefs about how the global Energy system may restructure in a low-carbon transition.