(www.MaritimeCyprus.com) Looking beyond today’s high energy prices to see what the longer-term energy future holds is difficult. That is what this Outlook does. The DNV forecast considers the demand shock of the pandemic and the supply shock that came with Russia’s invasion of Ukraine and concludes that those developments exert little long-term influence over a transition that will be rapid and extensive.
High energy prices and a greater focus on energy security due to the war in Ukraine will not slow the long-term transition
- Europe aims to accelerate its renewables build-out to achieve energy security
- In the rest of the world, tackling high energy and food prices may shift decarbonization down the list of priorities in the short term
- The long-term influence of the war on the pace of the energy transition is low compared with main long-term drivers of change: plunging renewables costs, electrification, and rising carbon prices
COP26 and the IPCC have called for urgent action which has not materialized: emissions remain at record levels
- Emissions must fall by 8% each year to secure net zero by 2050
- Opportunities for intensified action abound – the transition is opening up unprecedented opportunities for new and existing players in the energy space
Electricity remains the mainstay of the transition; it is growing and greening everywhere
- With an 83% share of the electricity system in 2050, renewables are squeezing the fossil share of the overall energy mix to just below the 50% mark in 2050
- Despite short-term raw material cost challenges, the capacity growth of solar and wind is unstoppable: by 2050 they will have grown 20-fold and 10-fold, respectively
Hydrogen only supplies 5% of global energy demand in 2050, a third of the level needed for net zero
- Pure hydrogen use scales in manufacturing from the early 2030s and in derivative form (ammonia, e-methanol and other e-fuels) in heavy transport from the late 2030s
- Green hydrogen from dedicated renewables and from the grid will become dominant over time; blue hydrogen and blue ammonia retain important roles in the long term
PATHWAY TO NET ZERO
We are heading towards a 2.2°C warming; war-footing policy implementation is needed to secure net zero by 2050
- Massive, early action to curb record emissions is critical; the window to act is closing
- No new oil and gas will be needed after 2024 in high-income countries, and after 2028 in middle and low-income countries.
Net zero means leading regions and sectors have to go much further and faster
- OECD regions must be net zero by 2043 and net negative thereafter; China needs to reduce emissions to net zero by 2050
- Renewable electricity, hydrogen and bioenergy are essential but insufficient: almost a quarter of net decarbonization relies on carbon capture and removal combined with land-use changes (reduced deforestation).
For more details, click below to download the DNV ENERGY TRANSITION OUTLOOK 2022 (EXECUTIVE SUMMARY):