The World Needs Vastly More Green Electricity

Environment

The long-term risks for humanity and nature from global warming are evident. Things that we depend upon and value — water, energy, transportation, wildlife, agriculture, ecosystems, and human health — are experiencing the effects of a changing climate. While perceptions about the consequence of the climate crisis may have advanced, reality has not. The majority of the world continues to rely on fossil fuels for heating, cooling, transport, and manufacturing. It’s time to take decisive action on climate change and convert to green electricity — that energy source produced from solar, wind, geothermal, biogas, eligible biomass, and low-impact small hydroelectric sources.

The climate crisis surrounds us. Flood waters flow through Brooklyn city streets this morning. New Orleans continues to struggle with vast power outages. Wildfires are destroying life and property in California and affecting breathing quality in Lake Tahoe. Heatwaves in the Pacific Northwest are recent and harsh memories.

Over a decade ago, the Intergovernmental Panel on Climate Change concluded that the net damage costs of climate change were likely to be significant and to increase over time. Suddenly, the NIMBY attitude has shifted to one of increasing alarm. “We need to do — be better prepared. We need to act,” insisted President Joe Biden as he prepared to visit the devastation from Hurricane Ida.

Yet Covid-19 recovery packages have largely focused on protecting rather than transforming existing industries. Large-scale action toward green electricity is still needed urgently, and a new report from DNV out of Oslo, Norway provides guidelines on where such efforts can be directed.

Core Insights into the Current State of Green Electrification

We are not meeting Paris ambitions; there is a very short window to close the gap.

  • Global energy-related emissions will fall only 9% by 2030, and the 1.5˚C carbon budget is emptied by then. That is far too late: climate science points to the considerable risks of allowing emissions to accumulate before we act.
  • The global average temperature increase to reach 2.3˚C by end of the century.

Electrification is surging ahead, and renewables will out-compete all other energy sources.

  • Electrification of final energy demand will grow from 19% to a 38% share by 2050, powered mainly by solar and wind. Wind and solar PV will expand 15- and 20-fold respectively in the forecast period.
  • 50% of all passenger-vehicle sales will be EVs in 2032.
  • Heat pump use will triple, providing 32% of heat in 2050 while consuming 9% of energy use for heating.

Efficiency gains lead to a flattening of energy demand from the 2030s.

  • Energy efficiency remains our greatest untapped resource against climate change.
  • Energy intensity (unit of energy per dollar of GDP) improvements at 2.4%/yr outpace GDP growth during the coming three decades.
  • Efficiency gains are driven mainly by electrification.

Fossil fuels are gradually losing position, but retain a 50% share in 2050.

  • Gas maintains its current position, oil demand halves, and coal falls to a third of current use by 2050.
  • CCS (carbon capture and storage) deployment is too slow, and only 3.6% of fossil CO2 emissions are abated in 2050.

Insights about Green Electrification 2021

COVID-19 economic recovery spending is a lost opportunity.

  • Government interventions, to stop the spread of the virus and then to restart activity, revealed how effective national and global actions can be. Similar action and funding have yet to be applied to the unfolding global climate crisis.
  • Apart from the EU, COVID-19 stimulus packages are largely locking in carbon-intensive systems.
  • Very little of the COVID-19 spending which has a bearing on energy has been steered towards decarbonization.

Variability and low power prices are not roadblocks to a renewable-based power system.

  • Twinned with the plunging costs and advancing technology of battery storage, variable renewables are already enabling a phase out of thermal power generation.
  • Power-to-X, storage, connectivity, demand response, and carbon pricing will all help solar PV and wind maintain their competitiveness.
  • Solar + storage is emerging as a new power plant category which will provide 12% of all grid-connected electricity by 2050.

Decarbonizing hard-to-abate sectors requires far greater scaling of hydrogen, e-fuels, and biofuels.

  • Combined, hydrogen and e-fuels will cover only 5% of global energy demand by 2050.
  • Aviation, maritime, and heavy industry increase their relative share of emissions and remain heavy users of unabated fossil fuels.

Most hydrogen will be produced from dedicated renewables-based electrolysers by 2050.

  • Green hydrogen will dominate over time, with 18% of hydrogen supply produced via electrolysis from cheap grid electricity and 43% from electrolysis using dedicated off-grid renewables.
  • Blue hydrogen will lose its cost advantage, providing only 19% of hydrogen supply for energy purposes by 2050.

Final Thoughts about Green Electricity

The findings of this year’s DNV report do not differ fundamentally to those of their first forecast issued 4 years ago. They conclude that “in a half-decade where the costs of inaction on climate change have been mounting and the evidence of its effects are growing ever more visible, it is sobering to reflect on the fact that the pace of the energy transition has not accelerated beyond our first forecast.”

The verdict is clear: the world needs vastly more green electricity, both direct and indirect, as well as energy storage on a dramatically accelerated timescale. 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.

And the efforts will be met well, as customers respond positively to green electricity for its zero emissions profile and carbon footprint reduction benefits.

Methods

This report was prepared by DNV as a cross-disciplinary exercise between the DNV Group and 2 of their business areas – Energy Systems and Maritime – across 15 countries. DNV was founded 157 years ago to safeguard life, property, and the environment. It is owned by a foundation and advances the safety and sustainability of those businesses. 70% of their business is related to the production, generation, transmission and transport of energy. Developing an independent understanding of, and forecasting, the energy transition is of strategic importance to both DNC and their customers.

The core model development and research has been conducted by a team in their Energy Transition research program, part of the Group Development and Research unit, based in Oslo, Norway. In addition, they were assisted by the external Energy Transition Outlook Collaboration Network.

Graphic provided by DNV

 

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