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Energy transition likely to miss Paris Agreement 1.5oC goal

The latest Energy Transition Outlook by DNV-GL forecasts that current measures will not be fast enough to meet the Paris Agreement goal and could reach 2.5oC by the end of the century. However, at the report launch, Remi Eriksen, Group President and CEO of DNV-GL maintained: ‘The technology is available to deliver the energy transition, without the need for new breakthroughs like nuclear fusion.’

Today, 80% of the global energy mix is provided by fossil fuels and the remainder non-fossil. The report predicts the energy mix will be 44% fossil and 66% non-fossil by 2050. ‘This will be a positive move with less fossil fuels and lower carbon emissions,’ Eriksen said.

Oil production is anticipated to peak in 2022, transport energy demand is expected to peak in 2026, and natural gas to peak in 2034 at 5,500 Gcm/y, slowly reducing by 5% to 2050. By 2035, half of the world’s fleet of road vehicles, passenger and commercial, are predicted to be electric. By 2048, commercial electric vehicles (EVs) are likely to start outnumbering internal combustion engine (ICE) powered vehicles. Indeed, EVs are considered to be three times as efficient as ICEs.

‘We predict a staggering growth in electrification, with wind and solar sources providing most of that electricity by 2050,’ said Eriksen. Storage capacity will climb massively. Storage, which currently stands at at 650 GWh will expand globally to 31 TWh, with the lion’s share provided by batteries. A further 16 TWh will be available from the world’s EV fleet by 2050, and demand-response, behind-the-meter storage, power grid expansions and power-to-gas will create additional flexibility. The future grid will be characterised by complexity, with 5,000 offshore wind farms and 3bn EVs by 2050.

Natural gas will hold a major position as an energy source throughout the forecast period, growing from 25% to 29% of global primary energy use. The share of unconventional onshore gas is expected to rise from 24% currently to 34% of total production in 2050.

Oil production is expected to decline by 44% during the forecast period, reducing from 29% of world primary energy use today to 17% in 2050, largely due to the rapid electrification of the world’s road transportation fleet. Aviation and shipping cannot convert easily, so biofuels will drive decarbonisation.

Affordability is a key acid test for the transition. DNV-GL forecasts the future energy system will be costlier than today’s, with annual global energy expenditure expected to rise by 22% from $4.5tn today to $5.5tn in 2050. However, against world GDP growth of 130% to 2050, the energy expenditure increase is very small.

By 2050, two thirds of world power will be provided by solar or wind. Solar photovoltaic growth will be driven by continued plunging costs, dropping to less than 60% of today’s levels by mid-century. Electricity generation from wind will increase from 1.1 PWh/y in 2017 to 17 PWh in 2050, delivering 29% of the world’s energy, with Greater China, North America, Europe and the Indian subcontinent providing the largest output. Production of hydrogen will take a significant role in some countries.

Unfortunately, greenhouse gas emissions are expected to overshoot the Paris Agreement 1.5
oC target by 770 Gt of CO2 by 2050 and even higher by the end of the century. In order to achieve the goal, DNV-GL suggests we would have to generate all our electricity from renewable sources from this day forward. We must reduce energy intensity at much higher speed than the 2.5% forecast. Annual reductions would need to be 4.8%/y to achieve 2oC, which is ‘unrealistic’. And we will have to capture vast amounts of carbon. ‘Even if all emissions associated with fossil-fuelled power stations were captured, that alone would not be enough,’ said the report. ‘And, given the snail-paced development of carbon capture and storage (CCS) worldwide it appears to be a particularly slender straw to clutch at.’

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