What will the future energy system look like?
The global phenomenon known as the energy transition is advancing even more quickly than expected thanks to the wide-reaching effects of several disruptive technologies – like the electric vehicle, the dramatic drop in the cost of solar PV and new battery technologies – coupled with even more aggressive climate policies from the US and other large nations.
Rystad Energy attempts to remain firmly entrenched at the forefront of this development through the collection of all relevant observations and datapoints, which are then integrated into a comprehensive and consistent global energy model. A surprising outcome of this modelling is, among other things, that greenhouse gas emissions are actually being reduced faster than what is outlined in many conventional models that are widely regarded as “aggressive scenarios”. In our model, electrification levels will reach 80% by 2050, with the solar and wind sectors accounting for more than 80% of global power production at that time. Furthermore, GHG emissions, including the effect of carbon capture and storage (CCS), will be at a level that is consistent with the 1.5oC target. Still, our modelling is not more radical than the ambitious targets laid forth by various large nations at the Biden Climate Summit in April.
However, in this new world of energy, many radical shifts are on the cards. While about 55% of the energy mix is currently traded on global markets – primarily involving oil, coal and LNG – by 2050 only about 15% will be traded globally, given the decline of fossil fuel demand and the continued rise of renewable energy that is traded at local and regional levels. Investments will shift almost completely to renewable power, batteries and grid upgrades. The transportation and industrial sectors will be almost fully decarbonized. We will address these vital topics and others at our Energy Transition Marathon on 6 May. So please stay tuned and make sure to connect via LinkedIn Live or Facebook for some or all of the seven sessions of the ET Marathon next Thursday. I can hardly wait to host this event, which will be filled with insightful presentations, thought-provoking discussions and you as a key audience.