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.
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. Electric vehicle
(EV) sales (both battery-electric and plug-in hybrids) reached 2.2 million units in 2019 (InsideEVs, 2020a), continuing the growth from the previous year.
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.
However, the reduction of carbon emissions is not the only reason why the world should embrace the energy transformation. Figure 4 (below) outlines other important drivers.
To set the world on a pathway towards meeting the aims of the Paris Agreement, energyrelated carbon dioxide (CO2 ) emissions need to be reduced by a minimum of 3.8% per
year from now until 2050, with continued reductions thereafter.
Figure 5 shows the possible paths of annual energy-related CO2 emissions and reductions as
per three scenarios: the Baseline Energy Scenario (indicated by the orange line); the Planned
Energy Scenario (indicated by the yellow line); and IRENA’s energy transformation pathway, the
Transforming Energy Scenario (indicated by the blue line).
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.
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% (Figure 6). 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.
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 (Figure 7), 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).
G20 overview The Group of Twenty (G20) members account for 85% of the global economy, two-thirds of the global population and almost 80% of global energy consumption. The energy mix in G20 economies is quite varied; however, most countries currently rely on a high share of fossil fuels in their total energy supply and thus are responsible for more than 80% of global CO2 emissions. Yet G20 economies have also become leaders in fostering cleaner energy systems, and their energy transition will shape global energy markets and determine both emissions and sustainable pathways globally.
Table 2 presents the evolution of key energy sector indicators in the G20 from today’s levels in the Transforming Energy Scenario (to 2030, 2040 and 2050). The Transforming Energy Scenario
leads to lower levels of supply and consumption of energy in absolute terms. By 2050, 51% of final energy consumption is electrified, with the highest share in buildings at 65%, followed by transport at 45% and industry at 44%. Renewable energy would have a prominent role in the electricity mix, with solar PV and wind (onshore and offshore) leading the way in absolute terms.
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.
The approach analyses variables such as GDP, employment and welfare (Figure 17). The results from the socioeconomic 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.
Figure 18 presents the evolution of energy sector jobs in the G20 for both the Planned Energy
Scenario and the Transforming Energy Scenario, by technologies. The Transforming Energy
Scenario leads to a higher number of overall energy sector jobs than the PES, as declines in the
number of fossil fuel jobs are more than offset by increases in jobs in renewable energy, energy efficiency and energy flexibility. By 2050, nearly 71 million people would be employed in the energy sector in the Transforming Energy Scenario, 46% in renewable energy, 25% in energy efficiency and 15% in energy flexibility. About 13% of energy jobs would still be in fossil fuels.
Gross domestic product in G20
Figure 23 show the 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.
Welfare in the G20
The sections above discussed the employment implications of the energy transition. Beyond
employment, other dimensions affect welfare. To capture a more holistic picture of the energy
transition impact, IRENA uses a welfare index with three dimensions (economic, social and
environmental) and two subdimensions in each. Figure 25 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.
Five years after the historic signing of the Paris Agreement, countries around the world
are struggling to translate their emissions reduction pledges into concrete actions to fight
climate change. IRENA estimates that if all national renewable energy targets in the first round
of Nationally Determined Contributions (NDCs) are implemented, around 3.2 TW of renewable
power capacity would be installed globally by 2030, 59% short of the capacity needed according to IRENA’s Transforming Energy Scenario. In the G20, around 2.8 TW of renewable power capacity would be installed by 2030, 60% short of the 7 TW envisioned in the Transforming Energy Scenario (IRENA, 2019h). Considerable opportunity exists to raise ambitions in a cost-effective way through enhanced renewable energy targets.
price was USD 48/MWh. G20 countries have been leading these trends (Figure 26), with record
low prices achieved on many occasions in Brazil, Mexico and Saudi Arabia.
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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