DNV’s latest report predicts that the US and Canada will spend $12 trillion on grid and renewable energy between now and 2050.
The Energy Transition Outlook North America report predicts that overall energy expenditure will be equivalent to 2.5% of GDP by 2050, with renewables and electrification driving this shift. Furthermore, electrification will double by 2050 and account for 41% of the region’s overall energy demand.
Key findings
- Policies are triggering massive investment into new technologies, accelerating the energy transition in North America
- Domestic fossil fuel demand declines 60%, mainly in transport and power sectors, but export remains stable while domestic energy use is declining
- Household energy expenditure halves by 2050 driven by energy efficiency and a cleaner energy mix driving energy affordability
The $12 trillion to be spent on renewables and grid infrastructure in the U.S. and Canada should be viewed as an opportunity to put the region at the heart of technologies essential to the global energy transition, such as hydrogen e-fuels, whilst reducing energy bills for households.
… said Remi Eriksen, Group President and CEO at DNV
Fuel supply
DNV also finds that solar will become the largest producer of electricity by the mid-2030s, and wind will account for 35% of the region’s electricity supply by mid-century.
However, the US and Canada will not reach net zero CO2 emissions by 2050. CO2 emissions are predicted to decrease by 75% by 2050 due to the continued use of fossil fuels and significant emissions from hard-to-electrify industrial processes like cement production.
Fossil fuels
Currently, fossil fuels account for around 80% of energy supply in the US and Canada, but this will drop to less than 50% by 2050. Coal production will drop 85% by mid-century as it struggles to compete with cheaper forms of electricity production such as wind and solar, DNV supplies.
Policies
The Inflation Reduction Act (IRA) and Canadian government policies are accelerating decarbonization in the two countries. Solar and wind power will grow 15- and 8-fold respectively by 2050, while investments in hydrogen, carbon capture and storage (CCS), and direct air capture (DAC) will be front-loaded in the 2030s, DNV predicts.
The progressive policies of the IRA are accelerating the transition and demonstrate a pathway that governments can take to hasten the energy transition. However, the U.S. and Canada, like the rest of the world, still need to do more to reach net zero by 2050
… added Remi Eriksen, Group President and CEO at DNV
