The world’s energy system remains on track to push global warming beyond 2°C by 2100
This is the fifth annual Energy Transition Outlooks issued by DNV. For half a decade, we have said, consistently that the most likely future for the world’s energy system is one that will result in global warming exceeding 2°C by 2100, and that is our conclusion once again this year.
The impact of global warming is becoming alarmingly apparent, and I believe there is a widening understanding of the long-term risks for humanity. However, while perceptions may have changed, reality has not. Each year, in the foreword to this Outlook, I have stressed the need for governments and companies to take decisive action on climate change. COVID-19 has more than demonstrated that governments can act boldly. Yet, from an energy transition perspective, the pandemic has been a lost opportunity. Recovery packages have largely focused on protecting rather than transforming existing industries. There are exceptions to this, and our forecast incorporates slightly more clean energy in the mix over the next three decades than we did a year ago.
But large-scale action is still needed urgently, and our forecast provides clear guidelines on where such efforts should be directed. Wind and solar PV will expand 15- and 20-fold respectively in our forecast period. Twinned with the plunging costs and advancing technology of battery storage, variable renewables already offer an attractive alternative to phasing out thermal power generation and the business case will become overwhelming by 2030.
Electricity demand will more than double by 2050 and by then over 80% of power will be provided by non-fossil sources. The accompanying efficiencies are staggering, both in the avoidance of heat losses in power generation and in end use – for example, with EVs and heat pumps. But the problem is this: even if all electricity was ‘green’ from this day forward, humanity would still fail to achieve net zero emissions by 2050.
Not everything can be electrified. That is what makes tackling the hard-to-abate sectors of high heat, aviation, shipping and trucking so very urgent. Yet our forecast shows that hydrogen enters the picture at scale only in the late 2030s. That is far too late: climate science points to the considerable risks of allowing emissions to accumulate before we act.
The verdict is clear: the world needs vastly more green electricity, both direct and indirect, more biofuel, and more carbon capture and storage on a dramatically accelerated timescale.
In October this year we will publish our first Pathway to net zero emissions report – a detailed look at how best to close the gap between this forecast and one that is aligned with the Paris Agreement. It is critical that we mobilize all the forces of the Fourth Industrial Revolution towards a green energy transformation, including innovative ways to finance this shift. This year we address that critical subject in our supplementary report, Financing the Energy Transition.
- Remi Eriksen
Group President and CEO, DNV