The goals of the Paris agreement on climate are still within reach, according to BloombergNEF’s (BNEF) 2022 New Energy Outlook, released today, but action is needed to accelerate the shift to clean energy technologies.
The research firm looks into two scenarios for the global energy system until 2050. Its Net Zero Scenario shows that it is possible to keep temperature rises to 1.77 degrees Celsius and achieve net zero by 2050 with a rapid switch to clean power generation, electrification, as well as contribution from carbon capture and storage and hydrogen.
“Our Net Zero Scenario shows that a credible pathway to meet the goals of the Paris Agreement still exists, but getting there requires immediate action. Clean power deployment needs to quadruple by 2030, in addition to a major investment in carbon capture and storage, advanced nuclear technologies, and hydrogen,” said David Hostert, lead author of the report. This decade the world needs to invest USD 3 in low-carbon supply for every USD 1 invested in fossil-fuel supply, he added.
In the Net Zero Scenario, half of total emissions abated over the 2022-2050 period come from replacing fossil fuel generation with clean power. In the middle of the century, the global power system consists of 48% wind generation, 26% solar, 7% other renewables, 9% nuclear and a part of coal or gas with carbon capture.
Electrification of transport and industrial processes, buildings and heat with lower-carbon electricity accounts for about a quarter of the emissions abatement over the period. A combination of demand-side efficiency gains and recycling, hydrogen, bioenergy and carbon capture and storage provide the final quarter of emissions reductions. Hydrogen use increases from over 90 million tonnes today, which is mainly fossil-derived hydrogen, to about 500 million tonnes of clean hydrogen by 2050.
In BNEF's Economic Transition Scenario, renewable energy, whose competitiveness has increased in the global energy crisis, also experiences rapid growth. Wind and solar provide about two-thirds of the global power generation by 2050 in this scenario. Power sector emissions decline by 57%, and emissions in the transportation sector fall by 22% to 2050, driven by electric vehicles. Coal, oil and gas use all peak by the early 2030s. This, however, is insufficient, and the Economic Transition Scenario is consistent with 2.6 degress Celsius of global warming.
Hostert said that the two scenarios describe very different pathways for the energy transition. “Policy makers returning home from COP27 have an opportunity to start closing the so-called ‘implementation gap’, by removing barriers to the deployment of renewable energy and electric vehicles, accelerating the development of newer technologies like hydrogen and carbon capture, and actively managing the transition away from unabated fossil fuels,” he added.
The report also looks into nine countries that account for 63% of global emissions. It says that countries take different paths to net zero under the Net Zero Scenario. Developed countries, the US, UK, France, Germany, Japan and Australia, make fast emissions cuts in the current decade, while developing economies, India, Indonesia and the Rest of World, increase emissions for several more years before achieving rapid falls in later years. China's pathway is a mixture of both.