It’s full steam ahead for renewables in the DNV-GL consultancy’s latest Energy Transitions Outlook. It looks to wind and solar power having a 29% and 40% share, respectively, of total global electricity generation by 2050, with nuclear stalled and energy demand peaking by 2035. That’s despite there being a boom in electric vehicle (EV) use – renewables can support that, with electrification carrying all before it. “Electrification and its inherent efficiency will contribute to humanity’s energy demand declining from the mid-2030s onwards,” the report says. “Global expenditure on energy, as a percentage of GDP, will fall 44% by 2050.”
However, DNV-GL says it won’t be automatic: “high fractions of solar and wind will create a need for increased use of market mechanisms and changes to the electricity market fundamentals”. So the consultancy wants policy makers to intervene and put in place “measures to incentivize a demand shift towards clean energy, to stimulate innovation in new efficient and clean technologies”. Otherwise we won’t hit the Paris climate targets.
It all sounds most exciting, but very electricity oriented. “DNV GL sees energy efficiency improvements being so strong that it from the 2030s onwards outpaces the economic growth that globally gradually will reduce towards around 2%/yr,” said Sverre Alvik, programme director of the Energy Transition Outlook. “Behind the strong efficiency improvements is a strong belief in electricity taking over as the dominant energy carrier, more than doubling its share to 45% of final energy demand in 2050.”
Alvik believes this means DNV GL has a distinctive take on what may happen. “The strong electrification of all sectors, but most of all in the transport sector, and the high renewable share, are two distinct differences from DNV GL’s forecast and many scenarios from other forecasters, and this is the main reason for DNV GL seeing world energy peak, while most other forecasters do not,” he said.
Efficiency may in theory mean energy demand growth can be contained and even reduced, as DNV-GL suggests, but a boom in EV use is now widely predicted, and most see that as leading to a power demand surge, at least in the short term. DNV GL evidently thinks that the fact that green electricity use is more efficient than fossil fuel energy use will compensate — we won’t need so much primary energy. However, there are also other factors. With green power generation costs falling, it’s hard to predict what will happen. Analysts at Swiss investment bank UBS seem to believe that, by 2030, the cost of energy from renewables like PV solar will be so low they will “effectively be free”, at least for power use in the domestic sector. But won’t people use more power if it’s cheap? For driving and many other things. Or will demand stabilize? There may be natural limits. It’s certainly the case that UK electric power consumption has been falling and is now back to 1994 levels.