The next three decades will play host to a massive shift towards electrification of the global energy sector, and the growth of renewables with 92% of all global power consumption coming from net zero sources by 2050, according to new research published this week by Rethink Energy.
Rethink Energy has published its second Annual Primary Electricity (APE) Forecasts, APE 2.0, which it describes as an “unadulterated perspective on the surge of global electrification in the race to net zero emissions.”
The key points here are that global power generation trebles over the next three decades, from 26,348TWh in 2020, to over 39,284TWh in 2030 and to 80,416TWh by 2050, thanks in part to economic growth but mostly due to the electrification of just about everything, road transport in particular.
“Efficiency gains in existing areas of demand will continue to decouple economic growth from electricity demand, and to a larger extend carbon emissions,” says Rethink Energy.
“However, as companies and governments are increasingly held to account over their decarbonization efforts, sectors from steelmaking to shipping will see fuel sources shifted towards electricity.”
As the graph above clearly shows, a huge array of factors will come into effect to drive the electrification of the global energy sector, and Australia will play a key role because its excellent solar resources will help deliver cost reductions in key sectors such as green hydrogen.
Rethink Energy expects to see peak coal-fired power generation in 2022, followed by peak oil in 2027, and peak gas-fired power in 2030.
With solar already moving past 1,000GW (and heading to 10,000GW by the late 2030s) and wind expected to hit 1,000GW in 2023, the first net-zero power grids will begin to emerge by the end of this decade. South Australia will likely be among the first.
By 2030, trillions of dollars of assets will be stranded in the fossil fuel sector at the same time as green hydrogen production ramps up, with electrolyser capacity hitting 1,000GW by 2036.
Those companies that remain focused on oil will be bankrupt by the end of the next decade just ahead of coal’s decline by 50% from its 2022 peak in 2043.
Australia is expected to pioneer green hydrogen by the end of this decade, before solar becomes the leading source of the planet’s power by 2033, and ICE vehicles are banned in most countries by around 2035, with 1 billion EVs on the roads by the early part of the following decade.
“Throughout Annual Primary Electricity (APE2.0), Hydrogen is seen as providing one of the most exciting opportunities for investors through this revolution, with its demand rising more than 10-fold to 735 million tons per year by 2050,” says Rethink Energry.
“As ‘green’ hydrogen from renewable sources overtakes ‘grey’ hydrogen in the late 2020s, the shift to hydrogen as a fuel source will become irresistible to the outlined sectors where direct electrification is inefficient or unfeasible.
“It’s use across feedstocks, transport, and industry will see over one-third of all electricity used to produce hydrogen by 2050.”
But with the shift to hydrogen in many sectors, electricity will need to continue to shift towards renewable sources.
Solar power will reach 10,000GW before the end of the next decade including 20GW of floating solar. Offshore wind will reach 1,000GW by 2045 before zero-carbon generation surpasses power demand sometime between 2045 and 2050.
Further driving a shift in the near-term, however, is the acceleration “in the race for energy independence prompted by Russia’s invasion of Ukraine, as attitudes shift towards securing power from decentralized and domestic renewable energy sources.”
“APE2.0 provides a genuine assessment of the energy transition, without pandering to the huge number of grey-haired laggards in the sector,” said Harry Morgan, Rethink Energy analyst and lead author of Annual Primary Electricity (APE2.0).
“Rather than using Primary Energy metrics, which distort figures in favour of fossil fuels by ignoring their inefficiency, figures given in TWh reflect the useful power provided, helping to demonstrate the true advantage of wind and solar.
“With a model like this you can plan future revenue streams for diverse energy structures, from shipping fuel to hydrogen availability for aviation, or how solar investments will increase profitability year to year.”
Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.