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* BP publishes benchmark 2019 Energy Outlook
* Renewables seen expanding at unprecedented rate by 2040
* Energy demand expected to soar by a third
* India set for fastest growth
* Oil demand to peak in mid-2030s
By Ron Bousso
LONDON, Feb 14 (Reuters) - Global demand for renewable powerwill soar at an unprecedented pace over the coming decades, BPsaid in a benchmark report on Thursday, while China's energygrowth is seen sharply decelerating as its economic expansionslows.
Still, China is set to remain the largest energy consumer bya long stretch into 2040 although India should overtake it interms of demand growth beginning in the next decade, the Britishoil and gas giant said in its 2019 Energy Outlook.
China's energy demand rose by 5.9 percent over the past 20years, but is set to grow by only 1 percent by 2040 as itseconomy shifts from energy-intensive industries to services andas Beijing introduces stricter rules on air pollution.
BP revised down its forecast of China's energy demand by 7percent from last year's report, "reflecting the pace at whichChina is adjusting to a more sustainable pattern of economicgrowth".
Under BP's base-case Evolving Transition scenario, globalenergy demand will increase by around one third by 2040, drivenby rapidly expanding middle classes in Asia.
RENEWABLES EXPLOSION
Renewables are expected to be the fastest-growing energysource with an annual gain of 7.1 percent, accounting for halfthe growth in global energy. Their share in primary energy isseen rising from 4 percent today to around 15 percent by 2040.
Compared with the level in last year's report, BP raised by9 percent its 2040 forecast of demand for renewable power suchas solar and wind.
Renewables and natural gas, the least-polluting fossil fuel,will account for 85 percent of the growth in energy demand.
"Renewables will penetrate the energy system quicker thanany other fuel ever," BP Chief Economist Spencer Dale toldreporters before the release of the report.
Solar power will increase by a factor of 10 by 2040 and windby a factor of five under BP's basic scenario.
While the share of oil in world energy demand rose from 1percent to 10 over 45 years in the early 20th century,renewables are set to reach the same share over 25 years, Dalesaid.
EMISSIONS RISING
In a world struggling to tackle climate change by curbinggreenhouse gas emissions and to bring billions of people out ofpoverty, demand for electricity is set to account for aroundthree quarters of the growth in energy.
Global energy-related carbon emissions hit a historic highof 32.5 gigatons in 2017, after being flat for three years, dueto increased energy demand and the slowing of energy efficiencyimprovements, the International Energy Agency said last year.
The unprecedented growth in renewables is, however, notsufficient to meet U.N.-backed targets set under the 2015 ParisClimate Agreement to curb carbon emissions in order to limitglobal warming to below 2 degrees Celsius by the end of thecentury, he added.
Under the Evolving Transition scenario, carbon emissionswill grow by 10 percent by 2040, much faster than in the past.
OIL DEMAND
BP expects oil demand to plateau at around 108 millionbarrels per day (bpd) by the mid-2030s, amid growth in electricvehicles and higher engine efficiency.
Transportation continues to be the main driver of growth inoil consumption, with its share remaining stable at around 55percent by 2040.
Demand for transport services will almost double by 2040,but gains of nearly 50 percent in engine efficiency for cars andtrucks mean energy consumed by the sector should grow by only 20percent.
Oil used to produce plastics is the largest source of demandgrowth over the period, increasing by 7 million bpd to 22million bpd.
The growth in oil supply will initially come from rapidlyexpanding U.S. shale production, which BP expects will grow by 6million bpd over the next 10 years, peaking at 10.5 million bpdin the late 2020s.
As U.S. shale output declines, production from members ofthe Organization of the Petroleum Exporting Countries (OPEC)will take the lead.
TRADE WARS
BP warned that an escalation in trade disputes couldsignificantly reduce energy demand due to slowing economicgrowth. A 6 percent reduction in global gross domestic productin the period to 2040 versus BP's base-case scenario would leadto a 4 percent decline in energy demand, it said.
Lower demand and slowing energy trade flows would have thebiggest impact on oil and gas exporting countries such as Russiaand the United States, BP said.
(Additional reporting by Nina Chestney; Editing by Dale Hudson)
