(Credit: Pixabay)Energy transitions in the power and transportation sectors are key in advancing toward international net-zero targets, but without companies and governments taking action to accelerate low-carbon technologies, the goals may not be realized, according to BloombergNEF.
The research company released its 2022 New Energy Outlook with a focus on two decarbonization pathways – an economic transition and a net-zero scenario. The economic outlook assumes no new policy to enhance clean energy transitions, and the net-zero target looks at advancing energy technologies, including rapid deployments of clean power generation.
BloombergNEF analyzed country-level results and used industry modeling, including what the steel, aluminum, and cement industries should take on for the greatest chance at decarbonization. It also updates material-demand forecasts.
The report finds that emissions need to fall by 30% by 2030 and 6% a year through 2040 to achieve net-zero goals under the Paris Agreement.
BloombergNEF says that under the net-zero scenario the world can stay on track for decarbonization through rapid deployments of clean power, electrification, and to a lesser extent increasing the use of hydrogen, and carbon capture and storage. David Hostert, the global head of economics and modeling at BNEF and lead author of the report, says although there is a pathway to net zero, clean power deployment needs to quadruple by 2030 to realize the goal.
“To get on track this decade, there needs to be $3 invested in low-carbon supply for every $1 in fossil-fuel supply,” he says. “We need to see a massive acceleration in the build-out of power grids, manufacturing capacity for low-carbon technologies, and supply of critical metals and materials. These could become painful bottlenecks tomorrow if left unaddressed today.”
Moving from fossil fuels for power generation will be the single largest factor in emissions reductions. Doing so will account for half of emissions reductions through 2050, the report says, and energy will be largely generated using wind and solar sources. Under that scenario, wind and solar would make up nearly three-quarters of the world’s power generation.
Electrification of transport, industrial process, and buildings are potentially the next biggest source of emissions reductions, accounting for around a quarter necessary to reach net zero. BloombergNEF says the technologies exist to make these transitions, but the implementation has been slow, especially in the case of heating for buildings.
The scenario also sees carbon capture and storage implementation increasing from 40 megatons in 2021 to more than 7 gigatons by 2050. Emission-free hydrogen use would also need to quadruple by 2050.
Under the economic transition scenario, the rapid growth of renewable energy and the electrification of transport would eliminate half of the world’s energy-related emissions. They can do so with no additional subsidy, especially due to the lower costs of wind, solar, and battery technology over the past decade.
Wind and solar would account for two-thirds of the world’s power generation, and BloomberNEF modeling shows emissions peak in the power sector around 2023. Global coal, gas, and oil use would peak over the next decade.
The report finds that energy emissions fall by 57% and transportation emissions by 22% by 2050. However, this scenario alone isn’t enough to reach the 2050 Paris Agreement target, BloombergNEF says.
Overall, the report suggests six strategies for policymakers and private investors to enhance energy transitions. They include accelerating the deployment of existing clean technology, phasing out carbon-intensive activities, and supporting energy transitions in emerging and developing markets.
