Spence Dale, Group Chief Economist at BP, unveiled the BP Statistical Review of World Energy 2017 last week. During his talk, which told the story behind the energy data, it was evident that China played a dominant role in shaping recent trends. The country accounted for 23% of global energy consumption in 2016 in a year when the global growth of primary energy consumption remained low and the energy mix shifted away from coal and towards low-carbon fuels. China’s consumption grew by just 1.3% in 2016, compared to its ten-year average growth rate of 5.3%. This slowdown reflected a change in China’s economy as output from energy-intensive industries fell and the focus shifted towards services. Despite this new trend, China remained the largest growth area for energy for the sixteenth consecutive year.
In 2016, China established a policy to decrease coal production, which brought about an increase in coal prices and, consequently, a fall in coal consumption. This policy, combined with other global measures such as taxation, resulted in the largest ever fall of global coal production. Speaking of the effects of these changes in the UK, Spencer Dale saw “consumption falling back to where it was roughly 200 years ago around the time of the Industrial Revolution and the UK power sector recording its first ever coal-free day in April this year”. China dominated renewables growth in 2016, surpassing the US as the largest global supplier. Its renewables consumption grew by 33% and accounted for over 20% of global renewables. Increased levels of nuclear generation were also seen. A combination of improvements in energy intensity and increased levels of low-carbon generation meant that China’s energy emissions fell by 0.7% in 2016, having seen average growth of 4.2% over the previous ten years. Globally, CO2 emissions from energy use were flat in 2016 and showed a third consecutive year of below average growth. To conclude, Spence Dale reflected on the powerful part that price can play in the energy sector, from the effects of increasing coal prices in China to carbon taxation in the UK. He commented that an even faster transition to a low-carbon economy could be brought about with higher carbon prices, with a starting point of $100/tonne required to bring about change.
