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BP signals world energy production remains stuck on coal

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BP signals world energy production remains stuck on coal

SNL Image

Coal trucks at Cloud Peak Energy Inc.'s Antelope mine in September 2017.
Source: Associated Press

The chief economist for BP PLC said he is alarmed by the persistent use of coal in the global power sector despite "extraordinary growth" in renewables and "huge policy efforts" to move toward lower carbon alternatives.

While renewable energy's share of global power generation rose by 100 basis points in 2017 to 8.4%, coal held steady at approximately 38% and the share of non-fossil fuels was lower than 20 years earlier because growth in renewables has failed to offset a decline in nuclear generation, according to BP's "Statistical Review of World Energy," released June 13.

"To have any chance of getting on a path consistent with meeting the Paris climate goals there will need to be significant improvements in the power sector," BP Chief Economist Spencer Dale said in the report. "But this is one area where at the global level we haven't even taken one step forward."

Carbon emissions from energy consumption ticked up an estimated 1.6% in 2017 after three consecutive years of little to no growth as the world's gross domestic product grew at above-average rates, BP said. The nearly 200 countries that signed the Paris Agreement on climate change committed to limiting global warming to 2 degrees C from preindustrial levels. A majority of scientists have tied climate change to human-caused carbon dioxide emissions.

Dale said he is more concerned about the "lack of progress in the power sector over the past 20 years" than he is about the increase in carbon emissions in 2017, which he said was driven in part by cyclical factors that may not persist.

In an introduction to the report, BP CEO Bob Dudley said, "The failure to make any inroads into the power sector since the turn of the century should be both a cause for concern and a focus for future action."

In April, Dudley said a "race to renewables will not be enough" to significantly lower emissions, adding that "every type of energy needs to be cleaner and better." In an effort to cut its greenhouse gas emissions by 3.5 million tonnes by 2025, BP plans to increase energy efficiency, boost gas production and reduce methane emissions and flaring.

The London-headquartered oil and natural gas major said global power generation rose by 2.8% in 2017, close to the 10-year average, with nearly half of the increase driven by renewables and 44% coming from coal.

According to BP, 38.1% of global power generation came from coal in 2017, 23.2% came from natural gas, 15.9% came from hydroelectric, 10.3% came from nuclear and 8.4% came from renewables.

In the U.S., renewables accounted for 9.8% of electric generation, up from 8.5% a year earlier, the company said. The U.S. generated 32% of its electricity from natural gas last year and 30.7% from coal.

China, by contrast, generated 67.1% of its electricity from coal in 2017, while 7.3% came from renewables and 3% came from natural gas.