The natural gas market has huge potential and the competitiveness of renewable energy can be expected-Interview with Dai Sipan, chief economist of bp group

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Recently, the 70th edition of the "bp World Energy Statistical Yearbook" was released to the public, which summarized the energy data for the whole year of 2020, focusing on the analysis of the huge impact of the global new crown epidemic on the energy market and the possible impact on the evolution of global energy trends in the future.
The impact has caused concern in the industry
.

Last Friday, Dai Sipan, chief economist of the bp group, shared some of the findings in the "Yearbook" with the Chinese media online and accepted an interview from the Chinese media

Our reporter is at the scene

About carbon reduction

About carbon reduction

Net zero emissions become the focus of the world, the world pays attention to China's carbon market

Net zero emissions become the focus of the world, the world pays attention to China's carbon market

Reporter: Which one of the changes in the global energy industry last year and even the past five years impressed you?

Reporter: Which one of the changes in the global energy industry last year and even the past five years impressed you?

Dai Sipan: I think there are three changes that are very important: First, at the time of the United Nations Climate Summit in Paris in 2015, no major country committed to achieving net zero emissions
.

But now that the countries that make up 70% of global carbon dioxide emissions have committed to net zero emissions, the discussion of net zero emissions has become the focus of the world

Second, regarding changes in the energy system, hydrogen energy was not a topic of discussion five years ago
.

But since then, we can see more and more discussions about hydrogen energy, and hydrogen energy has become more and more important

Third, we now realize that we can reduce emissions from the power system.
Wind energy and solar energy have great potential and can contribute 60% to 70% of the world's electricity demand in the future
.

To achieve the above goals in the next 20-30 years, this is a consensus reached by everyone, and there was no such consensus five years ago

Reporter: China has officially launched carbon emissions trading.
How do you evaluate the role of carbon emissions trading in global emissions reduction?

Reporter: China has officially launched carbon emissions trading.
How do you evaluate the role of carbon emissions trading in global emissions reduction?

Dai Sipan: The whole world is paying close attention to the changes in China's carbon trading market.
China has now developed the world's largest carbon trading market.
I think China will learn how to develop its own carbon market
.

The carbon price is relatively low now, so this price mechanism has not been effective so far, but I think China is sending out a good price signal, which is a good start

Reporter: When will we see the economy grows while the carbon dioxide is reduced?

Reporter: When will we see the economy grows while the carbon dioxide is reduced?

Dai Sipan: The challenge in the future is that we must find a way to reduce carbon dioxide emissions as the economy grows
.

We have to do two things: First, to further improve energy intensity, which means that the energy intensity required for each GDP growth is decreasing, so we need to improve energy efficiency; second, we need to continuously improve the carbon dioxide of the entire GDP Intensity, which means to reduce the use of fossil energy, and use more solar, wind, and renewable energy

About oil and gas transition

About oil and gas transition

Oil and gas investment still needs to continue to be optimistic about the natural gas business

Oil and gas investment still needs to continue to be optimistic about the natural gas business

Reporter: Now many oil and gas companies have begun to increase investment in clean energy, but this kind of investment may bring greater pressure on the performance of oil and gas companies in the short term.
How to solve this problem?

Reporter: Now many oil and gas companies have begun to increase investment in clean energy, but this kind of investment may bring greater pressure on the performance of oil and gas companies in the short term.
How to solve this problem?

Dai Sipan: bp company has made a commitment to achieve the net zero goal by 2050 and to help the world achieve the net zero goal
.

To achieve this, we will gradually reduce the output of oil and natural gas, and at the same time rapidly increase low-carbon or zero-carbon business, we promise to reduce our oil and natural gas output by 40% by 2030 compared to the current level.

Dai Sipan:

Reporter: Under the goal of energy transition and net zero emissions, major energy companies are reluctant to invest or dare not invest in oil and gas investment.
Will this make oil and gas in short supply?

Reporter: Under the goal of energy transition and net zero emissions, major energy companies are reluctant to invest or dare not invest in oil and gas investment.
Will this make oil and gas in short supply?

Dai Sipan: One point of the International Energy Agency is that under the net zero emission scenario, there should be no new oil and natural gas investment projects
.

For this reason, many people say that we no longer need new oil and natural gas investment

Dai Sipan:

In fact, in the next 10 years, the amount of investment in existing oil and natural gas projects should reach 300 billion U.
S.
dollars per year, and it will decline after 2030, to 170 billion U.
S.
dollars per year
.

Therefore, bp believes that the world needs to transform and gradually bid farewell to the oil and gas era.
As an energy company, it is incumbent on us
.
But we must also clearly realize that oil and gas are still indispensable for maintaining human economic prosperity at least in the next 10-15 years.
If the existing oil and natural gas projects are still to be maintained, or even to increase production, Need to continue to invest
.

Reporter: Some people say that natural gas is a transitional energy, while others say that it is the ultimate energy.
What is your opinion? What is bp's development strategy for natural gas business?

Reporter: Some people say that natural gas is a transitional energy, while others say that it is the ultimate energy.
What is your opinion? What is bp's development strategy for natural gas business?

Dai Sipan: Natural gas is very resilient, much higher than oil
.
In my opinion, there are two main factors: First, natural gas can help developing countries and emerging economies reduce and decarbonize at a relatively rapid rate
.
For example, national coal accounts for a large proportion of the energy structure of an economy, but at the same time the energy demand of this economy is still growing rapidly, it is necessary to vigorously develop natural gas and at the same time vigorously develop renewable energy, that is, two legs.
Walking can help a country quickly reduce the proportion of coal in its structure
.
Many Asian countries have insufficient natural gas production capacity, which means that they will increase natural gas imports
.
bp is optimistic about the LNG business, which will be a rapidly developing market in the next 10-15 years, and the LNG trade may even double
.

Dai Sipan:

Second, natural gas can play an important role in the goal of net zero emissions
.
Natural gas + CCUS technology can be used to produce blue hydrogen, which can help reduce carbon intensity
.
For this reason, bp company is now embarking on a major project, which is to deploy a blue hydrogen production base in Teesside in northeastern Scotland using natural gas + CCUS technology.
Once completed, it will be the world’s blue hydrogen production capacity.
The largest base
.

About new energy

About new energy

The role of hydrogen energy is indispensable, solar wind energy competitiveness can be expected

The role of hydrogen energy is indispensable, solar wind energy competitiveness can be expected

Reporter: China's hydrogen energy development is relatively hot now, and capital has entered this field one after another
.
But we have also noticed a phenomenon.
Honda plans to stop the production of hydrogen fuel cell vehicles from August this year.
What do you think of this somewhat contrasting phenomenon?

Reporter: China's hydrogen energy development is relatively hot now, and capital has entered this field one after another
.
But we have also noticed a phenomenon.
Honda plans to stop the production of hydrogen fuel cell vehicles from August this year.
What do you think of this somewhat contrasting phenomenon?

Dai Sipan: I don't think the difference in opinions is very big.
Hydrogen energy really needs to play an important role in the global energy system
.

Dai Sipan:

To achieve the goal of net zero emissions, the first stage is to achieve low-carbon electric energy, achieve electrification as much as possible, and use zero-carbon electricity to provide electricity for these electrified industries
.
However, there are some activities in the global economy that cannot be electrified.
For example, long-distance transportation cannot be electrified, or shipping and aviation cannot be electrified
.
At the same time, there are some heavy industries.
Heavy industries that require high-temperature heating cannot be electrified, so hydrogen energy is needed in this regard
.
We know that hydrogen energy will play an important role in the transportation industry
.
Passenger cars are relatively easy to electrify, but heavy-duty trucks, especially long-distance heavy-duty trucks, are difficult to electrify, which requires hydrogen vehicles
.

Reporter: In the field of low-carbon energy, we have seen that many companies and institutions, including bp, regard solar and wind energy as the main growth force in the future.
What do you think are the competitiveness of these two types of energy compared with other renewable energy sources?

Reporter: In the field of low-carbon energy, we have seen that many companies and institutions, including bp, regard solar and wind energy as the main growth force in the future.
What do you think are the competitiveness of these two types of energy compared with other renewable energy sources?

Dai Sipan: The competitiveness of wind energy and solar energy has increased substantially in the past 5 years.
First, the cost of electricity through wind energy has dropped by 40%.
At the same time, we know that the cost of solar power has dropped by 55%.
This cost makes wind energy and solar energy more competitive, so Being able to compete with other sources of electricity around the world does not require much support from the government
.
Of course, wind and solar power generation requires a certain amount of land and resources.
1GW of wind and solar power is less efficient than 1GW of nuclear power and 1GW of natural gas
.
But these inefficiencies have been considered in the cost, so the total cost can still compete with other energy sources
.

Dai Sipan:

We are also modeling the issue of land occupation, especially in some countries with high population density.
From a social point of view, how much wind power and solar energy they can accept is not a problem in other countries with relatively low population density.

.
In Europe, we pay more attention to wind energy on the sea, because the sea will not occupy land
.

Therefore, our view is that this is not a bottleneck in the development of wind and solar energy from the perspective of land resources in the world
.