A new report by the International Energy Agency (IEA) has identified the most technically feasible, cost-effective and socially acceptable pathway to reach net-zero by 2050.
To achieve that goal, the Net Zero by 2050: a Roadmap for the Global Energy Sector sets out more than 400 milestones, including no investment in new fossil fuel supply projects, no further final investment decisions for new unabated coal plants, no sales of new internal combustion engine passenger cars by 2035, and a net-zero emissions global electricity sector by 2040.
In the near term, a net-zero pathway requires the immediate and massive deployment of all available clean and efficient energy technologies, combined with a major global push to accelerate innovation.
“[The] pathway remains narrow and extremely challenging, requiring all stakeholders – governments, businesses, investors and citizens – to take action this year and every year after so that the goal does not slip out of reach,” the report states.
The pathway also calls for annual additions of solar PV to reach 630 gigawatts by 2030, and wind power to reach 390 gigawatts. Together, this is four times the record level set in 2020. For solar PV, it is equivalent to installing the world’s current largest solar park almost every day.
To achieve this, total annual energy investment will surge to US$5 trillion by 2030, adding an extra 0.4 percentage points a year to global GDP growth. The jump in spending will create millions of jobs in clean energy, including energy efficiency, as well as in the engineering, manufacturing and construction industries. All of this puts global GDP 4 per cent higher in 2030 than it would reach based on current trends.
A major worldwide push to increase energy efficiency is also an essential part of the pathway, resulting in the global rate of energy efficiency improvements averaging 4 per cent a year through 2030 – about three times the average over the last two decades.
Most of the global reductions in carbon dioxide emissions between now and 2030 come from technologies readily available today. But in 2050, almost half the reductions come from technologies that are currently only at the demonstration or prototype phase.
This demands that governments quickly increase and reprioritise their spending on research and development – as well as on demonstrating and deploying clean energy technologies – putting them at the core of energy and climate policy. Progress in the areas of advanced batteries, electrolysers for hydrogen, and direct air capture and storage can be particularly impactful, the IEA notes.
Providing electricity to around 785 million people who have no access to it and clean cooking solutions to 2.6 billion people who lack them is another integral part of the Roadmap’s net-zero pathway. This will cost around $40 billion a year, equal to around 1 per cent of average annual energy sector investment. Fatih Birol, Executive Director of the IEA said the transition must be fair and inclusive, leaving nobody behind.
“We have to ensure that developing economies receive the financing and technological know-how they need to build out their energy systems to meet the needs of their expanding populations and economies in a sustainable way.”
A glimpse towards 2050
According to the report, by 2050 the world looks completely different. Global energy demand is around 8 per cent smaller than today, but it serves an economy more than twice as big and a population with two billion more people.
Instead of fossil fuels, the energy sector is based largely on renewable energy. Two-thirds of total energy supply in 2050 comes from wind, solar, bioenergy, geothermal and hydro energy. Solar becomes the largest source, accounting for one‐fifth of energy supplies. Solar PV capacity increases 20‐fold between now and 2050, and wind power 11‐fold.
Net-zero means a significant decline in the use of fossil fuels. They fall from almost four-fifths of total energy supply today to slightly over one-fifth by 2050. The fossil fuels that remain in 2050 are used in goods where the carbon is embodied in the product such as plastics, in facilities fitted with carbon capture, and in sectors where low-emissions technology options are scarce.
Electricity accounts for almost 50 per cent of total energy consumption in 2050. It plays a key role across all sectors – from transport and buildings to industry – and is essential to produce low‐ emissions fuels such as hydrogen.
To support this, total electricity generation increases over two-and-a-half times between today and 2050. By 2050, almost 90 per cent of electricity generation comes from renewable sources, with wind and solar PV together accounting for nearly 70 per cent. Most of the remainder comes from nuclear.
The report outlines that new energy security challenges will emerge on the way to net-zero by 2050, while longstanding ones will remain, even as the role of oil and gas diminishes. The contraction of oil and natural gas production will have far-reaching implications for all the countries and companies that produce these fuels.
The IEA states that no new oil and natural gas fields are needed in the net-zero pathway, and supplies become increasingly concentrated in a small number of low-cost producers. OPEC’s share of a much-reduced global oil supply grows from around 37 per cent in recent years to 52 per cent in 2050, a level higher than at any point in the history of oil markets.
At the same time, the IEA states that no additional new final investment decisions should be taken for new unabated coal plants, that the least efficient coal plants will be phased out by 2030, and the remaining coal plants still in use by 2040 will be retrofitted.
Assistance in the transition
Growing energy security challenges that result from the increasing importance of electricity include the variability of supply from some renewables and cybersecurity risks. In addition, the rising dependence on critical minerals required for key clean energy technologies and infrastructure brings risks of price volatility and supply disruptions that could hinder the transition.
Dr Birol said governments need to create markets for investments in batteries, digital solutions and electricity grids that reward flexibility and enable adequate and reliable supplies of electricity.
“The rapidly growing role of critical minerals calls for new international mechanisms to ensure both the timely availability of supplies and sustainable production.”
Dr Birol said the IEA stands ready to support governments in preparing their own national and regional roadmaps, to provide guidance and assistance in implementing them, and to promote international cooperation on accelerating the energy transition worldwide.
“The pathway laid out in our Roadmap is global in scope, but each country will need to design its own strategy, taking into account its own specific circumstances,” he commented.
The full Net-Zero by 2050 report can be found here.