The massive growth of renewables will require significant investment and create enormous challenges for developers, network operators, and legislators.
Wind and solar PV will dominate the world’s electricity mix by 2050, with each technology source holding a 31% share. But this rollout of renewable energy, as well as the CO2 emissions that possibly peaked last year, will not be enough to meet the targets of the Paris Climate Agreement, according to a new analysis by DNV GL.
By mid-century, wind and solar photovoltaic power will account for 73% of installed capacity and 62% of annual electricity generation, according to the latest Energy Transition Outlook (ETO) from DNV GL.
The two technologies will achieve this growth because they are the most attractive economic options, even when government subsidies that have helped the wind and solar fleets gradually increase, according to reports. Some important wind markets have already moved to competitive auctions.
This growth in renewable energy generation will displace coal, while other energy sectors will remain relatively constant in DNV GL’s outlook.
But doubling the demand for electricity, changing the load patterns of electric heating and vehicles, and changing the way that energy is generated will require a substantial change in transmission and distribution systems around the world.
And overall, the energy transition is not happening fast enough to limit global warming to 1.5 ° C above pre-industrial levels, the most ambitious goal of the Paris Climate Agreement, DNV GL warned.
DNV GL predicts that the global carbon budget to limit global warming to 1.5 ° C above industrial levels will be spent as early as 2028, and predicts that the world will be 2.3 ° C warmer by the end of this century. than it was in the immediate pre-industrial period. .
Renewable Energy Generation growth
Analysts believe that wind power generation will multiply by 14 from 1,400TWh / year now to 15,500TWh / year by mid-century, while solar photovoltaic generation will grow from 700TWh / year to 18,700TWh / year in 2050.
Wind generation will be mainly from onshore projects, but the contribution from offshore wind will continue to grow, reaching around 28% of total wind production by mid-century, of which about a fifth will be from floating projects.
Together, wind and solar will account for 17TW of installed capacity by 2050, 14 times the combined installed capacity today, following annual installations of around 780GW in the 2040s.
This growth will be driven by the cost competitiveness of wind and solar photovoltaic energy resulting from technological advances, economies of scale and smarter operations.
As renewables capacity increases, developers will face challenges including finding the right sites for their projects, adapting to changing incentive schemes and regulations, and managing the transition to unsubsidized renewables, DNV GL said.
Meanwhile, a greater reliance on income from open power markets means developers and homeowners will need a greater understanding of power market opportunities and the risks involved, the analysts added.
There will be a growing need for hybrid projects (renewables plus storage) to maximize the value of power generation from wind and solar projects, while renewables will also need to play a more integral role in the grid.
And the efficient integration of large volumes of variable generation will also require a significant investment in network infrastructure, DNV GL noted.
Network operators will face challenges including expanding, hardening and upgrading the network to maintain high reliability and embracing digitization to operate more efficiently and flexibly, analysts suggested.
Long term Vision
Meanwhile, DNV GL added that the financial community should have a long-term perspective, as project risks cannot be easily assessed on the basis of current energy price fluctuations, declining overall demand, supply chain issues and generation priorities.
And policy makers can reassure potential investors by providing regulatory certainty, DNV GL concluded.
In a foreword to the perspective, CEO Ditlev Engel wrote: “We have the technology and the means, but we all need to promote new ideas and share innovation and proven solutions.
“And, fundamentally, we need policies and regulations to support this.”
Pandemic impact
In 2050, DNV GL predicts that an 8% drop in energy use will be attributable to the coronavirus pandemic, meaning that global energy demand that year will be almost exactly the same as in 2018.
And over the next three decades, CO2 emissions will also be 75 Gt lower than in a scenario without Covid-19, analysts said.
However, the coronavirus pandemic is taking a high and tragic toll on lives and livelihoods, increasing poverty and hunger and reducing growth prospects for those who need it most, DNV GL acknowledged.
In a webinar, DNV GL Project Director Mr. Sverre Alvik said that the coronavirus pandemic must not be repeated. “We need to find a much more sustainable way to reduce emissions,” he added.
Alvik said that while the pandemic and the resulting economic uncertainty have led to delays in financial decisions on wind and solar projects, renewable energy sources were affected “to a lesser extent than fossil fuels.”
But he added: “Covid only buys us a few years and does not give us the long-term impact we need.”
Analysts concluded that there is “potential for a more socially just and sustainable energy transition that does not cause the damage and disruption associated with the Covid-19 crisis.”
They added: “It must be an affordable transition based on highly efficient energy use and zero net supply.”
Read our article on Covid impact on India’s EV Industry.