DNV Issues Latest Energy Transition Outlook Report
- Sep 13, 2021 3:57 pm GMT
The organization says that electrification is not enough to meet net zero targets
Earlier this month, the influential DNV organization, which advises and certifies large areas of the power sector, issued its Fifth Annual Energy Transition Report, predicting trends out to 2100. The conclusion is sobering: that the world will most likely exceed its global warming target of 2° C by that date.
As the physical effects of a heating world become more intense and apparent, and with the latest global climate summit COP26 coming up in Glasgow in November, the information in this report is timely.
The 2021 report highlights the pandemic as a “lost opportunity” for pushing forward the energy transition, as Covid-19 recovery packages have largely focused on protecting rather than transforming current industries.
Electrification is on course to double in size within a generation and renewables are already the most competitive source of new power however, DNV’s forecast shows global emissions will reduce only 9% by 2030, with the 1.5˚C carbon budget agreed by global economies completely used up by then.
The COP21 Paris Agreement in 2015 was supposed to keep global warming to “well below 2°C” and strive to limit its increase to 1.5°C. Unfortunately the agreements made were non-binding and insufficient progress has been made. The transition is not fast enough: the DNV report warns that the Earth will most likely reach an average temperature increase of 2.3˚C by end of the century.
Remi Eriksen, Group President and CEO of DNV, said: “We’ve seen governments around the world take extraordinary steps to manage the effects of the pandemic and stimulate a recovery. However, I am deeply concerned about what it will take for governments to apply the resolution and urgency they have shown in the face of the pandemic to our climate. We must now see the same sense of urgency to avoid a climate catastrophe.”
“Many of the pandemic recovery packages have largely focused on protecting, rather than transforming, existing industries. A lot of ‘building back’ as opposed to ‘building better’ and although this is a lost opportunity, it is not the last we have for transitioning faster to a deeply decarbonized energy system.”
Energy efficiency remains the a huge opportunity for remediating climate change as the world heads further away from the Paris goals. Securing significant improvements in this vital area is an important element of the transition to net zero emissions – achieving greater efficiency is the reason why global energy demand is projected to level off, even as the global population and economy grows.
Reductions in the use of fossil fuels have been significant, however these fuels, especially gas, will still constitute 50% of the global energy mix by 2050 – making the need to invest in and scale hydrogen, and carbon capture and storage all the more important. Oil demand looks set to halve, with coal use reduced to a third by mid-century.
DNV's Energy Transition Outlook 2021 also reveals that while 69% of grid-connected power will be generated by wind and solar in 2050, and indirect electrification (hydrogen and e-fuels) and biofuels remain critical, none of these sources are scaling rapidly enough.
Hydrogen is the energy carrier that holds the highest potential to tackle hard to abate emissions however, the DNV report forecasts hydrogen use only starting to rise from the mid-2030s and – even then – only building to 5% of the energy mix by 2050.
“Extraordinary action will be needed to bring the hydrogen economy into full force earlier - but these are extraordinary times. The window to avoid catastrophic climate change is closing soon, and the costs of not doing so unimaginable.”, says DNV Group President and CEO Remi Eriksen.
The report, including its executive summary and various regional outlooks, is available here for free.
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