At the launch of the BP Statistical Review 2018 this month, their Chief Economist summarised the 2017 energy data as showing “two steps forward, one step back”. Global growth in energy demand was stronger in 2017, 60% of which was met by natural gas and renewables. Renewable energy grew by the largest amount on record last year, with particular growth in solar. However, coal consumption grew for the first time since 2013, and carbon emissions grew by 1.6%, having seen little or no growth in the period of 2014 to 2016. This should not detract from the fact that coal’s share of primary energy fell to its lowest level since 2004.
Improvements in energy intensity and emissions levels in previous years can, in part, be attributed to short-term cyclical factors, such as demand in China. This year’s data demonstrates how influential trends in China are in influencing not just global power demand but the energy mix and, therefore, global carbon emissions. Gas demand in China grew significantly, and its energy intensity declined by more than twice the global average, signifying an underlying long-term transition. In fact, long-term factors were thought to be positive for carbon emissions as wind, solar, and other non-hydro renewable sources grew by 17%. Solar capacity increased by 100GW last year, 50GW of which was built in China.
Global energy demand was up by 2.2% in 2017, compared to 1.2% in the previous year, and above the ten-year average. This was largely driven by global GDP growth. The majority of the increase in demand came from China, which saw a rebound in energy-intensive sectors. Global power demand grew by 2.8% in 2017, close to the ten-year average. The developing world accounted for most of this growth, with India largely driving the demand for coal. While OECD countries saw some energy demand growth, their energy intensity improvements over recent years kept it relatively low.
The launch event concluded with a look at the power generation mix over the past 20 years. Surprisingly, there has been no improvement in the global mix over that period, which BP saw as a cause for concern. Although there has been a significant increase in renewable capacity, that has not offset the declines in nuclear and hydro generation. This highlights the need to focus on the global power sector and to reduce reliance on fossil fuels if climate targets are to be met.