Oil and gas are cost competitive, and hence a major component of the world’s energy systems today. But alternatives could catch up by 2050, in at least some sectors. Renewable power is already growing fast and BP’s analysis suggests that its costs will continue to fall to 2050.
By 2050, we could see millions of self-driving cars on the roads, homes heated by smart boilers and a much more efficient energy industry. These are just some of the potential features of the world as pictured in BP’s Technology Outlook 2018. It shows how robotics, artificial intelligence and increasing digitization are set to make energy and travel more varied and affordable in the coming decades.
More, cheaper, safer, greener cars
The costs of light- duty electric vehicles – those that are fully electric cars and hybrids that use both liquid fuel and electric motors – are likely to converge with those of conventional vehicles by 2050. This will largely be due to an estimated 75% fall in the costs of batteries.
It also looks possible that more than 40% of all vehicle-kilometres driven in 2050 could be travelled in self-driving cars. Around a quarter of journeys may be in shared vehicles, including driverless taxis.
A digital revolution in oil and gas production
The BP Outlook projects that technology advances could drive down the unit cost of production by around 30% by 2050, with digitization leading to around a third of the savings, particularly through artificial intelligence and cognitive computing. Even so, the world will need investment around $0.6 trillion a year in upstream oil and gas to meet projected demand.
Wind on the up
In 2050, wind power is set to be the cheapest form of new-build grid-scale electricity generation with gas and solar not far behind. However, wind and sunshine are variable and will need back-up from other sources, including from gas-fired power.
Emissions growth checked
Progress in energy technology alone – such as in renewables and electrification – could lead to carbon emissions rising by only 15% between 2015 and 2050, compared with around 70% in the last 35 years.
However, to achieve emissions reductions consistent with meeting the 2015 Paris Agreement’s objectives, action would be needed to accelerate the progress of technology further. The modelling indicates that the power sector is the cheapest to decarbonise, using renewables, nuclear and carbon capture use and storage (CCUS), followed by transport and heating.
More to do…
As you would expect, I’m passionate about the role technology can play in the energy transition. But technology is only one part of the equation. The world also needs to have in place the right policies and practices. These include putting a price on carbon emissions and encouraging consumers to make lower-carbon choices in every aspect of their lives.
Meeting those challenges is a responsibility for all of us to share.