Technology key to meeting Paris Agreement
Electrification and changes to the energy mix, if supported by governments, would mean climate goal is within reach—DNV GL
Existing technology would be enough to contain global warming to the COP21 pledge of 1.5°C but only if the energy transition is backed by strong enforcement of policies set out in the Paris Agreement, according to standards agency DNV GL at its annual Energy Transition Outlook event. Crucially, it also predicts that the transition would be affordable.
DNV GL predicts that energy use will peak by 2030, when efficiency improvements start to outpace economic growth. However, although it foresees a rapid energy transition—with a doubling of electricity in the demand mix by 2050 and a steep decline in oil from 2030—it does not expect emissions to fall fast enough to limit warming to 2°C. The forecast predicts 2.5°C, which "should set alarm bells ringing", says Remi Eriksen, the firm's CEO.
"We forecast a very rapid transition unfolding, within the timespan of one generation. Existing technology can deliver on the Paris Agreement, but only with broad and strong policy backing," he says.
The cost of the transition will be eased by another of its predictions—that the cost of energy will consume a lower share of global GDP. "The technology that can deliver a rapid transition already exists," says Eriksen, referring to solar panels, battery storage, carbon capture and storage, hydrogen and renewables.
"Our forecast does not reach for a magical solution or a revolution. Rather, it is the reducing costs of existing technologies which make a big difference," he continues, noting that each time the capacity of an energy source doubles its cost decreases—depending on its maturity—by a double-digit percentage.
The world relies on fossil fuels for 80pc of its energy needs and the report predicts this will reduce to 56pc in 2050. It also forecasts that energy consumption growth will rapidly decouple from GDP and population growth, to which it has historically been correlated. "In the next three decades we expect the global economy to grow by as much as 130pc," says Erikson. "But, at the same time as we grow more prosperous, that growth will use less energy and make less CO2."
DNV GL expects aggregate energy demand to peak in 2030 due to a combination of factors including efficiency gains from electrification, in residential and industrial uses, through technologies such as heat pumps. Further efficiency savings will come from 'smarter' buildings.
“At the same time as we grow more prosperous, that growth will use less energy and make less CO2” Eriksen, DNV GL
By 2032, it predicts electric vehicles (EVs) will account for half of global car sales and there will also be a rapid uptake for electrified buses in cities. By contrast, it expects hydrogen to increasingly play a role in long distance and heavy trucking.
DNV GL forecasts that adoption of EVs—which Eriksen says are three to four times more efficient—will mean that overall emissions from transportation will be marginally lower by 2050, despite the global fleet expanding by up to 75pc. It also predicts there will be more that 1bn two or three wheeled vehicles in Asia by 2030 and "more than 70pc of them will be electric".
Aviation and maritime are not easily able to adopt electric propulsion, says Eriksen, but "innovation is likely to be enormous".
Global electricity grids are forecast to almost triple in size by 2050, measured in voltage kms, and be greatly more efficient. "Electrification is the main theme in our forecast. We expect electricity, as an energy carrier, to more than double over the next three decades and electrification is a big driver for energy efficiency," says Eriksen.
"By mid-century, 63pc of the world's electricity will be supplied by solar PV or wind. This large share of renewables requires more flexible systems and that means huge increases in storage—we expect storage capacity to expand nearly fifty-fold… If there is one word to characterise the future grid it is complexity… and digitalisation is the key enabler."