Norwegian oil major Equinor as part of its annual long-term energy market outlook said global wind power output must increase around nine times from the present level if the world still wants to reach the goals of the Paris Agreement and limit global warming to well below two degrees Celsius.
The surge in wind power production would be needed as electricity demand is slated to rise by 80% under the newly-introduced ‘Rebalance’ scenario in Equinor’s ‘Energy Perspectives 2020’.
The Rebalance scenario, which shows a development path towards 2050 where economic growth accelerates in emerging markets, while being lower in developed economies, also assumes that by mid-century only 10% of the world’s private cars will be petrol or diesel powered.
Still – even under the assumption that oil demand peak was passed in 2019 – there will still be a need for oil and gas in the energy mix, Equinor reckons. But the company said at the same time carbon capture and storage (CCS) must handle around two billion tonnes of CO2 emissions per year, equivalent to 400 times the emissions being absorbed by its pioneering Northern Lights CCS project.
Accelerating renewables growth
The company, which is majority owned by the Norwegian state, thinks that its recently-announced 2050 net zero ambition for its own activities and the use of company products will ensure long-term competitiveness in a changing global energy system.
“Equinor will be a leading company in these changes, and we have set an ambition of becoming a net-zero energy company by 2050,” new chief executive Anders Opedal said.
“This means that we will be among the best companies in the world in producing oil and gas with low CO2 emissions.
“We will accelerate the growth in renewables, and we have projects that can help establish new value chains for carbon capture and storage and hydrogen.”
The Rebalance scenario in the Energy Perspectives 2020 also assumes that global energy-related CO2 emissions won’t return to pre-Covid 19 levels, and that the absolute global energy demand will be reduced by 15% in 2050 when compared to 2019 levels.
Reform not enough
Rebalance, however, is only one of three possible scenarios in Equinor’s energy market outlook.
The oil firm also portrays a ‘Reform’ and a ‘Rivalry’ scenario, which both would mean the world won’t achieve the Paris goals.
Under the Reform scenario, there will be a continued tightening of climate policies in line with the Paris Agreement, but it won’t be enough to actually reach the climate targets. Under such a scenario, developed countries are be the main drivers of development, but there is limited success for technologies such as CCS or new energy carries like hydrogen.
Indications for worst scenario
Under the Rivalry scenario, climate policy is not sufficiently prioritised and the energy transition thus won’t gain enough momentum.
Equinor thinks that there are several indications of the development heading in this direction, such as trade wars, social and political unrest or regional political conflicts. Under such a scenario, these conflicts would lead to protectionism, autocracy, less global cooperation, slower technology development and weak economic growth.
“The energy transition is progressing too slowly, and effective actions are required urgently to reach the climate goals,” said Eirik Wærness, senior vice president and chief economist of Equinor.
“To reach the climate goals, we must establish a new balance in the priorities between economic growth, increased welfare and climate actions.”