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How Big Oil gets its projections wrong-I: They tend to ignore the impact of disruptive technology
May 16: The website carries here an interesting insight into how some of the the biggest oil companies in the world have got their projections wrong on what the future may have in store
Consider these facts
8ExxonMobil’s first published Outlook in 2005 projected that wind and solar would account for 1% of total world energy production by 2030. Wind and solar achieved this share in 2012, after seven years rather than 25.
8Every year since its first published forecast in 2011, BP has predicted a sudden slowing of renewable energy growth, although every year the prediction has been wrong.
8BP and ExxonMobil estimate costs of renewable energy and electric vehicles well above mainstream industry estimates; BP’s forecast for solar costs in the United States in 2050 is higher than the actual average cost in 2016.
8While oil companies’ models largely ignore political drivers of change, the relative cost of different fuels is key to the prediction of the energy mix. Yet the companies appear to have unusually high estimates and forecasts of clean energy costs.
8The website carries here a report on how energy models are constructed, and highlight their central weakness: by extrapolating existing trends, they tend to predict that the future will
be just like the present, while masking underlying potential for disruption.
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