Modeling the long-term future of global energy sources and demand was a fraught and dicey thing even before the once-in-a-lifetime pandemic, but we're about to see a bunch of analysts take their best swings.
Driving the news: It's long-term outlook season!
- Next week BP will unveil the big annual look-ahead to 2050, while next month will bring midcentury outlooks from the International Energy Agency and the Energy Information Administration.
Why it matters: These big reports will provide a fresh look at how experts are weighing the ripple effects of the COVID-19 crisis that has upended energy markets and demand this year.
- But long-term outcomes are packed with uncertainties around things like the future of remote work, the energy-related provisions of governments' economic recovery plans, and a lot more.
Of note: Analysts who do these exercises will tell you that they're far from omniscient. But these big reports are a stab at grappling with what's ahead and, in some of them, what would need to happen to slash emissions.
What they're saying: "The pandemic is further increasing the uncertainty of our forecasting," Sverre Alvik, program director for energy transition with the risk advisory firm DNV GL, tells me via email.
What we don't know: "Economic stimulus packages from politicians around the world has the potential to speed up or slow down the transition, and 6-8 months after the outbreak, we don’t know which direction these will go (at the moment we see a lot of both, in sum making it a neutral impulse for the time being)," he said.
- "And human behavior is very likely to permanently change, but we don’t have yet an overview of the extent of this."
What's new: DNV GL yesterday released the full version of their annual Energy Transition Outlook that looks out to 2050. A few takeaway projections...
- CO2 emissions peaked last year, but future declines are nowhere near enough to meet the Paris Agreement goals.
- The world is on track for warming of 2.3°C above pre-industrial levels by mid-century.
- Crude oil use "likely" peaked last year, an inflection point brought forward by COVID-19.
- Natural gas will become the world's largest energy source this decade and remain so until 2050, despite the renewables surge. "However, only 13% of natural gas used in 2050 will be decarbonized."
- Overall, global energy demand will recover from the pandemic-fueled decline, but it's still an inflection point.
- Demand levels from now until 2050 "will be from a lower base" — meaning it will fluctuate 6% to 8% below pre-COVID forecasts.