The global shift away from a fossil fuel-based power system is gathering pace, with renewable energy sources on track to account for over 80% of total electricity output by 2050 as the build-out of wind and solar plant expands 20-fold, according to energy consultancy DNV GL’s latest Energy Transition Outlook (ETO).
But the 2019 report, launched today at London's Guildhall, underlines that despite market-making advances in wind and solar technology, slow progress in streamlining governmental regulatory frameworks to accelerate the energy transition is putting a drag on cutting emissions to levels that would meet the Paris Agreement goal of holding global warming to 1.5°C-2°C above pre-industrial levels.
“It is important to differentiate between the progress we are making on technology and the progress we are making on regulation,” said Ditlev Energy, CEO of DNV GL Energy, speaking to Recharge before the publication of the ETO.
“The progress on technology is very encouraging – both in terms of the daily impact on the transition and also on the cost [of energy] level it's very good – and so while we are ‘technology-optimistic’ we remain very much ‘climate-concerned’.”
DNV GL forecasts the global PV fleet to be producing some 36,000TWh a year by 2050, and wind farms 17,000TWh, together accounting for nearly two-thirds of all electricity production globally.
But Engel cautions that unprecedented as the build-out of wind and solar plant continues to be, it still falls “well short” of any climate-steadying effect, with the two resources having to reach installed capacities of 3TW and 5TW, respectively, by mid-century, according to DNV GL calculations, to “close the gap” on the 1.5°C target.
“If we let technology ‘do its thing’ there is still another 1°C that regulation has to fix,” he said, pointing to modelling that suggests the world is currently heading for a 2.4°C temperature rise by 2100.
“Right now we are on a road to a place nobody wants to go. And the wind and solar technology – much as we are predicting a phenomenal uptake – it is still not enough [at current build-out rates].
“The role of government the world over now is to find the ‘other 1°C’ by finding ways of better implementing the build-out of wind and solar at speed. We need to get the rubber on the road.”
DNV GL forecasts the 2°C carbon budget will be exhausted by 2049, and energy-related emissions still at 19Gt a year by 2050. At the same time, by its forecast, global energy demand will have begun falling, down 3% from its peak.
“‘Business as unusual’ has to become the new ‘business as usual’,” said Engel. “It requires a different mindset on the part of the politicians and on the part of the planning and permitting authorities et cetera.
“We need a new agenda. The investment houses I speak with are utterly confident about the technology [needed for the energy transition]; what they are concerned about is the regulation and where that is heading.”
The ETO report calls on international governments and business leaders to make “immediate and concerted efforts to accelerate action” on the energy transition. “It’s the elephant in the room,” said Engel. “They need to determine which energy sources need to be scaled-up and down, and how fast.”
Read the full interview with Ditlev Engel here.