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* Oil demand may have peaked last year - BP
* Renewable energy set to soar to up to 60% of primary
energy
* BP's 2020 Energy Outlook underpins CEO transition strategy
* GRAPHIC: Share of energy sources: https://tmsnrt.rs/3bVZ0aC
(Adds graphic, detail)
By Ron Bousso
LONDON, Sept 14 (Reuters) - Fossil fuel consumption is set
to shrink for the first time in modern history as climate
policies boost renewable energy while the coronavirus epidemic
leaves a lasting effect on global energy demand, BP said in a
forecast.
BP's 2020 benchmark Energy Outlook underpins Chief Executive
Bernard Looney's new strategy to "reinvent" the 111-year old oil
and gas company by shifting renewables and power.
London-based BP expects global economic activity to only
partially recover from the epidemic over the next few years as
travel restrictions ease. But some "scarring effects" such as
work from home will lead to slower growth in energy consumption.
BP this year extended its outlook into 2050 to align it with
the company's strategy to slash the carbon emissions from its
operations to net zero by the middle of the century.
It includes three scenarios that assume different levels of
government policies aimed at meeting the 2015 Paris climate
agreement to limit global warming to "well below" 2 degrees
Celsius from pre-industrial levels.
Under its central scenario, BP forecasts COVID-19 will knock
around 3 million barrels per day (bpd) off by 2025 and 2 million
bpd by 2050.
In its two aggressive scenarios, COVID-19 accelerates the
slow down in oil consumption, leading to it peaking last year.
In the third scenario, oil demand peaks at around 2030.
In the longer term, demand for coal, oil and natural gas is
set to slow dramatically.
While the share of fuels has shrunk in the past as a
percentage of the total energy pie, their consumption has never
contracted in absolute terms, BP chief economist Spencer Dale
told reporters.
"(The energy transition) would be an unprecedented event,"
Dale said. "Never in modern history has the demand for any
traded fuel declined in absolute terms."
At the same time, "the share of renewable energy grows more
quickly than any fuel ever seen in history."
Under BP's central Rapid scenario, non-fossil fuels account
for the majority of global energy sources from the early 2040s
onward, with the share of hydrocarbons falling by more than half
over the next 30 years.
Even with energy demand set to expand on the back of growing
population and emerging economies, the sources of energy will
shift dramatically to renewable sources such as wind and solar,
Dale said.
The share of fossil fuels is set to decline from 85% of
total primary energy demand in 2018 to between 20% and 65% by
2050 in the three scenarios.
At the same time, the share of renewables is set to grow
from 5% in 2018 to up to 60% by 2050.
In its forecast, BP said the growth in global economic
activity slows "considerably" over the next 30 years from its
past 20-year average, due in part to lasting effects of the
epidemic as well as the worsening impact of climate change on
economic activity, particularly in Africa and Latin America.
BP starts on Monday a three-day investor event where it will
detail its energy transition strategy.
(Reporting by Ron Bousso; editing by David Evans and Jason
Neely)
