Renewables will grow faster than expected as wind and solar "continue to surprise" with their costreduction trajectory, according to oil and gas supermajor BP.
The fossil giant’s latest Energy Outlook – which makes projections on energy supply and demand
over the next two decades – admits its previous forecasts on renewables were too low.
According to BP’s 2035 Outlook, renewables will grow by 7.1% per year, more than “quadrupling”
over the period, with their share of primary energy increasing to 10% by 2035, up from 3% in 2015.
This compares to predictions from BP last year suggesting renewables will grow by around 6.6%
annually, with their share of the energy mix reaching 9% by 2035.
The revision was by far the biggest jump made by any energy source in the latest outlook from BP
“as the prospective path for costs continue to surprise”, admitted the group. “As a result, the use of
both coal and gas in the power sector has been revised down,” said BP.
Over the outlook period, renewables continue to grow rapidly with the weight of growth shifting
“The EU continues to lead the way in terms of the penetration of renewables, with the share of
renewables within the EU power sector doubling over the outlook to reach almost 40% by 2035,”
“China is the largest source of growth over the next 20 years, adding more renewable power than
the EU and US combined,” it added.
The strong growth in renewable energy is underpinned by the view that the competitiveness of both
wind and solar power improves significantly in the period up to 2035.
“The cost of solar is expected to continue to fall, although the pace of that reduction slows, as the
rapidly-declining PV modules costs account for a decreasing share of the total installed costs,” said
In contrast, wind power costs are assumed to fall “materially” throughout the outlook, reflecting the
view that there is considerable scope to improve the performance of wind turbines.
BP’s analysis suggests that onshore wind will remain more competitive that solar in both the US and
"The global energy landscape is changing. Traditional centres of demand are being overtaken by
fast-growing emerging markets. The energy mix is shifting, driven by technological improvements
and environmental concerns. More than ever, our industry needs to adapt to meet those changing
energy needs," said BP’s chief executive Bob Dudley.
BP claims to have the largest renewable energy business of any of the global oil majors, thanks to its
bioenergy interests and US onshore wind operations, where it owns a net 1.56GW. However, it left
the solar sector in 2012 and has shown no inclination to follow fellow European oil major Shell into
the offshore wind market.
BP's latest Energy Outlook said that while technological improvements and environmental concerns
will change the mix of primary energy demand, oil and gas, together with coal, are still predicted to
remain the main source of energy in the period up to 2035.
BP said fossil fuels are set to account for more than 75% of total energy supply in 2035, compared
with 86% in 2015.
This forecast prompted environmental groups to call BP’s outlook a “fantasy”.
Charlie Kronick, senior climate advisor for Greenpeace UK, said: "BP forecasts a fantasy future
where the world fails to act on climate change, their desire to make money from accelerating
history’s greatest disaster remains sacrosanct and growing supplies of low cost oil guarantee their
blue chip status, forever. Nobody should be fooled."