Covid may have hastened peak oil, but clean energy fight is far from over | RenewEconomy

Covid may have hastened peak oil, but clean energy fight is far from over

Covid may temporarily cut emissions, but the world will still likely blow past the carbon budget for a 1.5-degree future in 2028.

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Image source: AAP Images. Photo credit: John Giles/PA Wire

In a wide-ranging and far-thinking new report released this week, Norway-based energy consultancy DNV GL has outlined the impacts of Covid-19 on the global energy transition.

It’s something – bringing peak emissions forward to 2019 and denting consumption in the long term by 6% to 8% – but the world will still likely blow past the carbon budget for a 1.5-degree future in 2028. And even if we were to meet this target, we must repeat the 2020 emissions saving every year until the middle of the century.

The COVID dent is noticeable, but badly insufficient

This was neatly summarised in a presentation of the results on Monday. “All this is sort of good news”, said Sverre Alvik, Programme Director, Energy Transition Outlook for DNV.

‘Sort of good news’ describes the strange mix of incredible progress over the past decade in renewable growth, forecasts of future growth, but the reminder that even that remains insufficient to reach global climate targets set by the 2015 Paris agreement. “Our forecast points towards a warming of 2.3°C by the end of this century, a level considered dangerous by the world’s scientific community”

There is still plenty of work to do; technology alone will be insufficient to reach these goals, and DNV GL goes to some lengths to regularly highlight the deep policy interventions that will be required to bend these curves in the right direction.

The report also briefly examines Australia specifically, although its conclusions may be hotly contested. “Falling population and improved efficiencies will almost halve energy use over the forecast period. 2050 electricity mix is dominated by wind, and at 50% of final energy demand, is the second-most electrified region in 2050 after China”, write the authors, in their scenario.

“Hydrogen will gain a foothold (9% of energy use), sourced initially from Australia through SMR [steam reforming using fossil gas] processes, but later mainly via renewably powered electrolysis”. Others would hope for a more renewable focus for hydrogen, but it is probably along the lines of federal government and incumbent industry thinking.

Wind, solar and EVs will change the world

“According to our best estimate, solar and wind will provide 24% of the world’s electricity in 2030 and 62% in 2050”, write the authors. It’s roughly in line with many other global estimates of electricity supply changes in the coming decades. By 2050, the report predicts fossil fuels will comprise 17% of total electricity, with nuclear providing 5%.

Interestingly, the report addressed requirements to integrate technologies like wind and solar into existing grids. Storage will grow from “current 650 GWh to over 30 TWh, with battery storage taking the largest share”. Grids will expand 170% around the world, with one third of the planet’s grids existing in Greater China, and the second largest share on the Indian sub-continent.

Electric vehicles will grow rapidly, with the authors forecasting that “EVs will reach 50% of new vehicle sales in Greater China, Europe and North America in the late 2020s”, and half of all road vehicles will be electric by 2035.

The future of gas

A key theme in DNV GL’s report is the urgent need to ‘decarbonise’ gas. The authors forecast gas becoming one of the world’s dominant energy sources as coal declines rapidly; pinning much of the world’s emissions overshoot on the high levels of extraction and burning of gas.

However, the solution proposed for this forecasted trend is policy support for CCS, particularly for hard to decarbonise sectors. Without policy intervention, the authors are pessmistic about the ‘business as usual’ pathway for this: “decarbonization of gas will not start in earnest until after 2035 and, even then, will be quite slow, with just 13% of natural gas effectively decarbonized by 2050”:

DNV GL predicts gas will become a substantial component of global emissions by 2050, driving at least half of climate change and the subsequent impacts on human society

Considering how wildly renewables and energy storage have exceeded expectations over the past several years, it’s worth considering an alternative in which renewables, paired with successful grid integration schemes and the electrolysis of hydrogen far exceed expectations, and begin to significantly displace gas far sooner than expected. Investment in trying to reduce the emissions footprint of fossil fuels, compared with trying to reduce the burning of fossil fuels by investing in zero carbon alternatives even in ‘hard to decarbonise’ sectors remains a globally significant debate.

To contrast this, a new plan produced by American-Australian entrepreneur Saul Griffith recently launched the ‘Rewiring America‘ handbook, in which he outlines a fossil-fuel-free pathway for the near and far future. It is America-only, unlike DNV GL’s global report, but it proposes several ways in which the country can transition to zero emissions without leaning on future inventions. Australia is, of course, tending towards the pathway of supporting investment in fossil fuels, through the controversial ‘technology roadmap‘ scheme which is intended to replace Paris climate targets and net zero ambitions.

These debates will play out much as debates on coal played out over the past decade. It seems likely that zero carbon technologies like wind and solar will again far surpass expectations.

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