DNVGL Energy Transition Outlook 2020: massive shifts in energy supply and demand expected
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DNVGL Energy Transition Outlook 2020: massive shifts in energy supply and demand are expected.
In future, according to DNVGL and other stakeholders, natural gas will become the key cornerstone of energy supply and remain so until 2050. This is especially owed to the weaknesses of variable renewable energy sources like wind and solar energy. LNG will overcome the intermittence issue of solar and wind. as long as green hydrogen is not available at low cost. However, only 13% of natural gas used in 2050 will be decarbonized. Battery storage is not perceived as a killer application.
Critical success factors of RES in free market environments are the availability of viable commercial business models as well as mature regulatory measures on national, regional and local level that make markets transparent and reliable.
Furthermore, the effects of Covid-19 on the world’s energy demand will be evident. Global energy demand will only see a modest growth post COVID-19. This is being owed to continuous improvements in energy intensity (e.g. by optimizing the usage and utilization rate of dissipating heat), behavioral changes (e.g. in the passenger car sector).
CCS/CCU (carbon capture and storage & carbon capture and utilization) uptake will be limited. It is only in the 2040s, when carbon prices start to approach the cost of CCS, that uptake will accelerate, and deployment begins at scale. By 2050, total carbon capture will amount to 11% of all energy-related emissions, i.e., 2.1 Gt per year
The most important priorities over the next five years include:
- Increase recycling and availability of scrap that requires much less energy for processing, e.g., steel, aluminum.
- Support on-site renewable electricity production, and/ or relocation of manufacturing to production areas with a low-carbon electricity mix (for electricity-based heating).
- Facilitate growth in electric arc furnace usage based on renewable electricity.
- Where appropriate, deploy CCS-application in the production process.
- Despite flat energy demand and a growing renewable share, the energy transition is nowhere near fast enough to deliver on the Paris Agreement
- Most likely we are heading towards 2.3°C warming by the end of the century
- A lot more renewable power, decarbonization energy-efficiency improvement and carbon capture is needed
- The world will spend an ever-smaller share of GDP on energy, allowing for additional investment to further speed up the transition
In summary, the electrification will be doubling by 2050, and therefore the energy efficiency gains will be significant. It is assumed that the fossil energy and variable renewable energy will be roughly at a share of 50% by 2050. However, decarbonization is not happening fast enough to reach the goals defined in the Paris Agreement. The forecast is that the 1.5°C carbon budget will be exhausted in 2028 and the 2°C budget in 2051, and extrapolating the emission trends, the Energy Transition Outlook pinpoints towards a 2.3°C of global warming by end of this century, a level considered as dangerous by the world’s scientific community.