Our work...gives us the confidence to say that technology can deliver the future that we desire – including meeting the 1.5°C warming limit established by the IPCC. The critical questions are how and when that technology is to be applied in the context of the policies – for example the 2020 update of the Nationally Determined Contributions (NDCs) – and market mechanisms driving decarbonization,
...says Remi Eriksen, Group President and CEO, DNV GL.
1.Technology can deliver the COP 21 1.5°C target, but only with strongly enforced policies aimed at delivering strengthened Nationally Determined Contributions (NDCs) under the Paris Agreement,
2. DNV GL forecasts a rapid energy transition, unfolding within the timespan of a single generation:
- The share of electricity in the final demand mix will more than double from today’s level
- Half of passenger vehicles sold worldwide will be EVs by 2032
- Oil declines steeply after 2030, but gas continues to grow before leveling off at 29% of the energy mix by 2050,
3. The transition expected is not fast enough
- Global energy-related emissions will only peak in 2025
- Emissions will not fall sufficiently by 2050 to bring global warming to well below 2ºC,
4. Global energy use peaks by 2030
- ‘Peak energy’ will be a turning point, as energy efficiency gains outpace economic growth
- Electrification, powered by renewable sources, is the biggest contributor to reduced energy intensity,
5. The transition is affordable: The world will spend an ever-smaller share of GDP on energy, allowing for additional investment to further speed up the transition.
- It holds a major position as an energy source throughout the forecast period, growing from 25% to 29% of global primary energy use.
- From 2017 production levels of 4,600 Gm³/yr, natural gas peaks in 2034 at 5,500 Gm³/yr thereafter slowly reducing by 5% to 2050.
- Production is however relatively flat from 2025 to 2050, but with a strong growth before this. Production-wise the share of unconventional onshore gas will rise steadily from its current level of 24% to 34% of total production in 2050.
- Conventional onshore declines in absolute terms, falling from 50% production to match the one-third share held by unconventional onshore in 2050.
Natural gas holds a major position as an energy source throughout the forecast period, but for oil the long-term decline trend is clear.
- As a source of primary energy, declines by 44% during our forecast period, reducing from 29% of world primary energy use today to 17% in 2050.
- The decline is largely due to the rapid electrification of the world’s road transportation fleet.
- In aviation and shipping, biofuels will drive decarbonization.
- Oil peaks in 2022 (in effect a spike in a plateauing decade) as it is particularly sensitive to the forecast rate of EV uptake, which in turn is influenced by our assumptions on government support and the cost learning rate for Li-ion batteries.
However, with a flat demand projection for non-energy oil use (e.g. as feedstock petrochemicals), and the transformation of road transport, the long-term decline trend is clear.
- Demand grew rapidly to its peak in 2014 and has since shown a negative, but bumpy, trend owing mainly to Europe and North America (giving way to gas and renewables) as well as demand flattening in air-quality plagued China.
- Over the next decade DNV GL forecasts a slow decline, with environmental concerns counter-balancing energy hunger in rising economies.
- In the longer term, all regions, except Sub-Saharan Africa, will use less coal, which globally drops from 27% of primary energy in 2017 to 10% in 2050.