Introduction Climate change has become one of the greatest threats of this century to environmental, as well as global, security, with adverse impacts on health, wealth and political stability. Over the past decade, energy-related CO2 emissions have increased by 1% per year on average, despite levelling off periodically. If historical trends continue, energy-related emissions will increase by a compound annual rate of 0.7% per year to 43 gigatonnes (Gt) by 2050 (up from 34 Gt in 2019), resulting in a likely temperature rise of 3°C or more in the second half of this century. Governments’ current and planned policies would result in a levelling of emissions, with emissions in 2050 similar to those today, but this would still cause a temperature rise of about 2.5°C. The Paris Agreement establishes a goal to limit the increase of global temperature to “well below” 2°C, and ideally to 1.5°C, compared to pre-industrial levels, by this century. To realise this climate target, a profound transformation of the global energy landscape is essential.
This section will show how renewable energy is a proven and available technology by providing the latest figures, trends and market developments in renewable energy deployment worldwide. The strong business case for renewables is demonstrated by their cost,performance and deployment evolution, especially when considering trends in solar PV, wind and other renewable power generation options, along with the growing viability of energy storage technologies. The current innovation landscape for enabling technologies, business models and system operation will also be outlined and discussed. Renewable power generation continues to grow in 2020, despite the COVID-19 pandemic, but new capacity additions in 2020 will be lower than the new record previously anticipated. Nonetheless, renewables steadily increasing competitiveness, along with their modularity, rapid scalability and job
creation potential, make them highly attractive as countries and communities evaluate economic stimulus options.
The share of renewable energy in electricity generation has been increasing steadily in
the past years and renewable power technologies are now dominating the global market for new generation capacity. From 2010 to 2018, the renewable electricity generation share increased from around 20% to nearly 26%, or 18% to 23% without considering bioenergy
Progress is being seen everywhere.
Dramatic shifts are taking place in the way that energy systems operate, driven by increased
digitalisation, the decentralisation and democratisation of power generation, and the growing
electrification of end-use sectors. Indeed, the main driver for the energy transformation is increased use of electricity, such as in the growing electric mobility revolution.
Renewable technology and carbon reduction outlook
Renewable energy, combined with intensified electrification, is key for the achievement of the Paris Agreement goals. To help enable the necessary transformation of the global energy sector, IRENA has developed an extensive and data-rich energy scenario database and analytical framework, which highlights immediately deployable, cost-effective options for countries to fulfil climate commitments and assesses the projected impacts of policy and technology change.
To set the world on a pathway towards meeting the aims of the Paris Agreement, energy-related carbon dioxide (CO2 ) emissions need to be reduced by a minimum of 3.8% per
year from now until 2050, with continued reductions thereafter. However, trends over the past five years show annual growth in CO2 emissions of 1.3%. If this pace were maintained, the planet’s carbon budget would be largely exhausted by 2030, leading to a temperature increase of more than 3°C above pre-industrial levels. This case would mean that governments were failing to meet the commitments they made in signing the Paris Agreement.
In the Baseline Energy Scenario, energy-related emissions would to increase at a compound
annual rate of 0.7% per year to 43 gigatonnes (Gt) by 2050 (up from 34 Gt in 2019), resulting
in a likely temperature rise of 3°C or more by the end of the century. If the plans and pledges of countries are met as reflected in the Planned Energy Scenario, then energy-related CO2 emissions would increase each year until 2030, before dipping slightly by 2050 to just below today’s level. However, to meet the Paris Agreement target of limiting the global temperature rise to well below 2°C and towards 1.5°C, annual energy-related CO2 emissions would need to fall more than 70% from now until 2050. Achieving these emissions reductions requires an acceleration across a spectrum of sectors and technologies, ranging from rapid deployment of renewable power generation capacities such as wind and solar PV, to deeper electrification of the end uses of transport (e.g. electric vehicles (EVs)) and heat (e.g. heat pumps) powered by renewables, direct renewable use (e.g. solar thermal and biomass), energy efficiency (e.g. thermal insulation of buildings and process improvement) and infrastructure investment (e.g. power grids and flexibility measures such as storage).
Global pathway and decarbonising with renewables
Under current and planned policies in the Planned Energy Scenario, the total share of non-biomass renewable energy in the total primary energy supply (TPES) would only increase from around 5% to 17%, while under the Transforming Energy Scenario it increases to 42%. Renewable energy use in absolute terms, excluding biomass, would increase from 25 exajoules
(EJ) in 2017 to 225 EJ in 2050 in the Transforming Energy Scenario. TPES would also fall slightly
below 2017 levels, despite significant population and economic growth.
Scaling up electricity from renewables is crucial for the decarbonisation of the world’s
energy system. The most important synergy of the global energy transformation comes from
the combination of increasing low-cost renewable power technologies and the wider adoption of electricity for end-use applications in transport and heat and hydrogen production. To deliver the energy transition at the pace and scale needed would require almost complete decarbonisation of the electricity sector by 2050.The Transforming Energy Scenario sets a pathway to achieve an 86% share for renewables in power generation mix by 2050 (of which 7% is from bioenergy and 79% from non-bioenergy renewables). On the end-use side, the share of electricity in final energy consumption would increase from just 20% today to almost 50% by 2050. The share of electricity consumed in industry and buildings would double. In transport, it would increase from just 1% today to over 40% by 2050. For power generation, solar PV and wind energy would lead the way. Wind power would supply more than one-third of total electricity demand. Solar PV power would follow, supplying 25% of total electricity demand. which would represent more than a 10-fold rise in solar PV’s share of the generation mix by 2050 compared to 2017 levels. To achieve that generation mix, much greater capacity expansion would be needed by 2050 for solar PV (8 519 GW) than for wind (6 044 GW).
Due largely to increased renewable electrification and direct renewables use, the share of
renewable energy in total final energy consumption (TFEC) would also rise considerably. The Planned Energy Scenario sees an increase in the share of renewables in TFEC from 17% in 2017 to 25% by 2050. The Transforming Energy Scenario results in a much higher share of 66%. Increasingly, electrification with renewables is seen as a major solution, and the contribution of renewable electricity will be the single largest driver for change in the global energy transformation. The share of electricity in total final energy use would increase from just 20% today to 49% by 2050. The share of electricity consumed in industry and buildings would double to reach 42% in industry and 68% in buildings in 2050, and in transport it increases
from just 1% today to over 40%. Other subsectors or activities would also see significant increases in the share of electricity use. Some of the largest growth would be seen in the buildings sector for space heating and cooking, and in the transport sector for passenger and road freight.
The energy transformation outlined in the Transforming Energy Scenario would require the almost complete decarbonisation of the electricity sector by 2050. In addition, electricity consumption in end-use sectors would more than double compared to 2017 and reach 55 000 TWh by 2050, driving increased power demand to be met with renewables. However, the shift to electrification of end uses brings major increases in energy efficiency. Heat pumps, for example, are two to four times more efficient than conventional heating systems.
With high shares of renewable electricity, flexibility is key to guarantee the stability of the power system. That flexibility will be enabled by current and ongoing innovations in technologies, business models, market design and system operation. On a technology level, both long-term and short-term storage will be important for adding flexibility, and the amount of stationary storage (which excludes EVs) would need to expand from around 30 gigawatt-hours (GWh) today to over 9 000 GWh by 2050. When storage available to the grid from the EV fleet is included, this value will increase by over 14 000 GWh to 23 000 GWh. However, most flexibility will be achieved through other measures, including grid expansion and operational measures, demand-side flexibility and sector coupling.
Transforming and electrifying the end-use sectors The most important synergy of the global energy transformation comes from combining low-cost renewable power technologies with the wider adoption of electric technologies for end-use applications in transport and heat. The renewable energy and electrification synergy alone can provide two-thirds of the emissions reductions needed to meet the goals of the Paris Agreement.This section details the key changes needed in the main energy-consuming end-use sectors of transport, industry and buildings (residential, commercial and public) over the period to 2050 in the Transforming Energy Scenario.
Looking ahead to longer time horizons up to 2050, with a different energy investment mix and USD 15 trillion of additional investment, the global energy system could become much more climate friendly, with cost-effective renewable energy technologies underpinned by more efficient use of energy. USD 3.2 trillion – representing around 2% of GDP worldwide – would have to be invested each year to achieve the low-carbon energy transformation. This is around USD 0.5 trillion more than under current plans. While cumulative global energy investments by 2050 would then be 16% higher, their overall composition would shift decisively away from fossil fuels.
The benefits for accelerating renewables deployment and efficiency measures are many times
larger than the costs. In the Transforming Energy Scenario, every USD 1 spent for the energy
transition would bring a payback of between USD 3 and USD 8. Or to put it in cumulative terms, the Transforming Energy Scenario would cost an additional USD 19 trillion over the period to 2050 but would bring benefits of between USD 50 trillion and USD 142 trillion in
reduced environmental and health externalities. Another way to look at costs is how much it takes to mitigate one tonne of CO2 over the period, which would be USD 34/t CO2 for the Transforming Energy Scenario.
Decarbonisation of final energy consumption that cannot be electrified IRENA’s Transforming Energy Scenario outlines a climate-friendly pathway with energy-related CO2 emissions reductions of 70% by 2050 compared to 2019 levels.
The Deeper Decarbonisation Perspective “zero” would cost an additional USD 26 trillion to achieve fully zero emissions (with no carbon offsets) on top of the Transforming Energy Scenario costs of USD 19 trillion. Therefore, the total costs would be USD 45 trillion. Yet these higher costs are still much lower than the USD 62 trillion to USD 169 trillion in savings from reduced externalities that would result from reaching zero emissions.
The overall costs do not account for the fact that many of the clean energy technologies are much cheaper than fossil fuel alternatives as . Another way to look at it is in the cost to mitigate one tonne of CO2 over the period. Many of the technologies that result in reductions
in the Transforming Energy Scenario are cheaper than the fossil fuel alternatives. Because the
Deeper Decarbonisation Perspective has to address remaining emissions in challenging sectors, and eventually reduce those to zero, it has higher costs compared to the Transforming Energy Scenario.
Socio-economic footprint of the G20 energy transition
A true and complete energy transition includes both the energy transition and the socio-economic system transition, and the linkages between them. Therefore, a wider picture is needed that views energy and the economy as part of a holistic system. Socio-economic footprint analyses.have captured an increasingly comprehensive picture of the impact of the energy transition. For these analyses, IRENA has undertaken a macroeconometric approach (using the E3ME model) that links the energy system and the world’s economies within a single and consistent quantitative framework. The approach analyses variables such as GDP, employment and welfare.The results from the socio-economic footprint analysis of the Transforming Energy Scenario globally show an additional net 15 million jobs and a 13.5% improvement in welfare by 2050, as well as an annual average boost of 2% in GDP between 2019 and 2050 compared to the Planned Energy Scenario.
Energy sector and renewable energy jobs in the G20 The energy transition implies deep changes in the energy sector, with strong implications for the evolution of jobs. While some technologies experience significant growth (e.g. renewable generation, energy efficiency and energy flexibility), others would be gradually phased out (e.g. fossil fuels), and all of this happens simultaneously with the evolution of energy demand.
Gross domestic product in G20
yearly evolution of the difference in GDP between the Planned Energy Scenario and the Transforming Energy Scenario up to 2050, as well as the impact from the different drivers of the GDP difference. The energy transition brings about a significant improvement in GDP, with the increase rising to 3% before 2040 and remaining there until 2050.
The drivers for GDP play very differently in the different G20 countries.presents the distribution of GDP drivers’ impacts across the different G20 countries or regions in average terms during the 2019-2050 period, compared with the G20 aggregate. In the G20, the Transforming Energy Scenario produces (on average) a 2.4% GDP increase over the PES.
presents the results of the welfare index for the G20 in the years 2030 and 2050. The welfare improvement of the Transforming Energy Scenario over the Planned Energy Scenario is very important, reaching 14% in 2050. Social and environmental dimensions, and specifically the health and GHG emissions subdimensions, dominate the overall welfare index results in the G20.
Barriers to the deployment of renewable energy
Despite the powerful factors driving the global uptake of renewable energy, multiple barriers inhibit further uptake in developed and developing markets. These vary based on specific markets and renewable energy technologies. This section outlines the some of the main barriers globally.
Countries need to be increasingly ambitious in their pledges to scale up renewables and cut energy-related carbon dioxide (CO2) emissions.
Innovative auction design has also helped address some of the challenges related to system integration with increasing shares of variable renewable energy (VRE) generation. Mexico has considered geographical allocation signals according to the network integration feasibility and costs. India and South Africa have sought to concentrate renewable project developments in specific geographical areas.
Measures to improve power system flexibility are needed to enable the integration of higher shares of VRE. Investment must be steered into innovations in all flexible resources (storage, demand-side management, interconnectors and dispatchable power plants), market design and system operations.
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