REFILE-China leads faster global energy efficiency gains-BP

Wed Jan 16, 2013 5:11pm GMT

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By Andrew Callus

LONDON Jan 16 (Reuters) - Accelerating global energy efficiency means fuel use is rising far slower than prosperity, largely because Chinese industrial development is increasingly energy efficient, a study by oil company BP Plc found.

In its annual Outlook 2030 report, BP predicts a 36 percent increase in energy use between 2011 and 2030. That outstrips forecast population growth of 18.5 percent to 8.3 billion but comes as world income is expected to roughly double in real terms.

The reduction in so-called energy intensity - energy use per unit of gross domestic product (GDP) - is bringing the measure back down to levels not seen since the late 19th Century.

The trend, along with a strongly rising market share of non-fossil fuels, will not be enough to keep greenhouse gas emissions below the International Energy Agency (IEA) central target of 450 parts per million (ppm) of carbon-dioxide equivalent.

But the pace at which Chinese industrialisation in particular is moving towards a more energy-efficient stage has surprised economic forecasters at BP, one of the world's biggest oil companies.

BP's chief economist Christof Ruhl says China is moving surprisingly quickly along the industrialisation cycle, where people and production move from energy-intensive industry into services and lighter manufacturing.

"That pattern is kicking in big time," Ruhl said, citing slower growth in coal use by China after 2020 as a key factor in his statistics.

"Globalisation means we are able to trade every fuel across almost every border as standardisation and energy consumption and production is everywhere, technologies are shared very very quickly," Ruhl said.

"The differences between countries in energy intensities have never been as small as they are today since the beginning of the industrial revolution and we see that trend continuing," he said. "We live in the most efficient world for the last 140 years I think."

BP expects energy use to grow 1.6 percent a year between 2011 and 2030 - in line with the highest of three growth scenario pictured by the IEA for a similar period, between 2009 to 2035.

But its projected energy use growth rate declines from 2.5 percent in the decade up to 2010, to 2.1 percent for the 10 years to 2020, and then slides more dramatically to 1.3 percent a year in 2020 through 2030.

It sees global energy intensity in 2030 being 31 percent lower than in 2011, with the decline taking place in all regions and accelerating from just 1 percent in 2000-2010 to 2.2 percent in 2020 to 2030.

Although it is losing touch with the pace of economic growth, a 36 percent increase in energy consumption would still be bad news for greenhouse gas emissions targets and the IEA's 450 ppm target.

By 2030, BP says, "emissions remain well above the required path to stabilise the concentration of greenhouse gases at the (450 ppm) level recommended."

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