Spending on Clean Energy Tech Matches Fossil Fuel Investment as Peak Oil May be Coming Into Focus

As part of new projections into the 2030s, BP cut its demand forecasts for crude oil by 2035 and raised expectations for renewable energy. Simultaneously, data from Bloomberg New Energy Finance shows global investments in the clean energy transition matched those focused on fossil fuel production for the first time ever last year. Several factors including the cost efficiency of renewables, as well as the war in Ukraine, helped to drive these recent trends in energy industry spending.

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BP made headlines yesterday, releasing its 2023 energy outlook, which made major revisions to the company’s petroleum demand forecasts. In particular, the British oil giant cut its oil demand forecast in 2035 by 5%, compared with last year’s report, while it sees natural gas demand 6% weaker. BP raised its 2035 demand outlook for renewables 5%, and nuclear by 2%, in its central scenario based on government decarbonization targets. BP also issued a target for peak oil sometime within the 2030s, predicting that “Global oil demand plateaus over the next 10 years or so before declining over the rest of the outlook”.

BP has made some overzealous predictions about the decline of fossil fuel demand before, stating in 2020 that the COVID-19 pandemic may have pulled peak oil all the way forward to 2019, but their more conservative projections have remained more or less the same for several years. Whether or not those projections end up being accurate, BP’s recognition that demand for renewable energy is accelerating is likely to hold true.

Bloomberg New Energy Finance’s (BNEF) “Energy Transition Investment Trends 2023” report found that global investments in the clean energy transition hit $1.1 trillion last year, roughly equal to the amount invested in fossil fuel production for the first time ever. That sum represents…