Emerging economies drive energy demand says BP
Global energy demand continues to grow but that growth is slowing and mainly driven by emerging economies, led by China and India, according to the BP Energy Outlook 2035 which has just published.
This is the fourth annual edition of the Outlook, and for the first time it sets out BP's view of the most likely developments in global energy markets further beyond 2030 to 2035, based on up-to-date analysis.
The Outlook reveals that global energy consumption is expected to rise by 41 percent from 2012 to 2035, compared to 55 per cent over the past 23 years (52 percent over the past 20 and 30 percent over the past 10.
Ninety five per cent of that growth in demand is expected to come from the emerging economies, while energy use in the advanced economies of North America, Europe and Asia as a group is expected to grow only very slowly - and begin to decline in the later years of the forecast period.
Shares of the major fossil fuels are converging with oil, natural gas and coal each expected to make up around 27 percent of the total mix by 2035 and the remaining share coming from nuclear, hydroelectricity and renewables.
Among fossil fuels, gas is growing fastest, increasingly being used as a cleaner alternative to coal for power generation as well as in other sectors.
Bob Dudley, BP Group Chief Executive, said: “The Outlook highlights the power of competition and market forces in unlocking technology and innovation to meet the world's energy needs. These factors make us optimistic for the world's energy future.
“The Outlook leads us to three big questions: Is there enough energy to meet growing demand? Can we meet demand reliably? And what are the consequences of meeting demand? In other words, is the supply sufficient, secure and sustainable?"
“On the first question, our answer is a resounding 'yes' .The growth rate for global demand is slower than what we have seen in previous decades, largely as a result of increasing energy efficiency.
“Trends in global technology, investment and policy leave us confident that production will be able to keep pace. New energy forms such as shale gas, tight oil, and renewables will account for a significant share of the growth in global supply.”
On the question of security, the Outlook offers a mixed, though broadly positive, view. Among today's energy importers, the United States is on a path to achieve energy self-sufficiency, while import dependence in Europe, China and India will increase.
Asia is expected to become the dominant energy importing region. Dudley noted: "This need not be a cause for concern if the market is allowed to do its work, with new supply chains opening up to these big consuming regions."
On the question of sustainability, global carbon dioxide emissions are projected to rise by 29 percent, with all of the growth coming from the emerging economies.
The Outlook notes some positive signs: emissions growth is expected to slow as natural gas and renewables gain market share from coal and oil; and emissions are expected to decline in Europe and the US.
Indeed towards the end of the period covered by the Outlook we expect many advanced countries will be seeing their economies grow while their energy use falls.
BP Chief Economist Christof Rühl said: “This process shows the power of economic forces and competition. Put simply, people are finding ways to use energy more efficiently because it saves them money.
“This is also good for the environment, the less energy we use the less carbon we emit. For example CO2 emissions in the US are back at 1990s' levels.”
This year's edition also examines transportation more closely and takes an in-depth look at the North American natural gas revolution.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.