Power station
© AP
Oil, gas and coal accounted for nearly three-quarters of the growth in energy demand last year
BP warns of 'vicious cycle' as use of heating and cooling systems boosts emissions

Extreme weather drove growth in energy demand last year to its highest level since 2010, triggering warnings of a "vicious cycle" fuelled by reliance on heating and cooling systems that could worsen the world's carbon emissions crisis.

Energy group BP said in its closely watched annual market review that energy consumption grew 2.9 per cent in 2018, led by China and the US, despite modest economic growth and strengthening oil and gas prices.

The rise spurred a 2 per cent increase in carbon emissions, the fastest since 2011 and equivalent to increasing the global passenger car fleet by a third, or just under 400m. "If there is a link between the growing levels of carbon in the atmosphere and the types of weather patterns observed in 2018, this would raise the possibility of a worrying vicious cycle," Spencer Dale, BP's chief economist, said in a speech on Tuesday afternoon.

The US saw an unusually high number of very hot or cold days last year, the most since the 1950s. China and Russia also saw greater fluctuations in temperature in 2018. Such patterns could cause stronger growth in energy demand and carbon emissions as households and businesses seek to offset the effects, Mr Dale warned.

Carbon dioxide in the atmosphere causes a greenhouse effect, trapping heat and increasing average global temperatures. Changes in atmospheric currents linked to climate change are also thought to contribute to extreme cold weather snaps in some areas.

Power generation is the largest source of energy-related carbon emissions, and as the world electrifies and demand for services such as air conditioning grows, the need to clean up the system will intensify.

"It hasn't been possible to decarbonise the power sector quickly enough to offset the growth in demand," Mr Dale, who was former chief economist at the Bank of England, said.

Climate activists and investors have called on oil and gas companies to take responsibility for their role in global warming, urging them to move into lower carbon businesses.

BP has pointed to the world's enduring reliance on fossil fuels and said it is aiming to increase output while ultimately reducing emissions.

But the latest statistics show the global energy system is not able to easily break this link as would be necessary to meet the Paris climate agreement goals. "There are grounds for us to be worried," Mr Dale said, adding there was a "growing mismatch between hopes and reality".

According to BP, oil, gas and coal accounted for nearly three-quarters of the growth in energy demand last year, their highest share in five years. Growth in renewable energy was less pronounced than in previous years but remained the fastest-growing source at 14.5 per cent.

Even as China and India have expanded into cleaner energy sources in recent years, the growth is not enough to meet demand and they are still building coal plants.

Coal saw its second consecutive annual pick-up in demand last year, led by Asia, after three years of declining consumption. Natural gas demand expanded by 5.3 per cent, one of its strongest growth rates in more than 30 years, fuelled by a continuing switch to gas in China.