Energy Transition Outlook 2022 by DNV

High energy prices and a greater focus on energy security due to the war in Ukraine will not slow the long-term transition

·        Europe aims to accelerate its renewables build-out to achieve energy security

·   In the rest of the world, tackling high energy and food prices may shift decarbonization down the list of priorities in the short term

·      The long-term influence of the war on the pace of the energy transition is low compared with main long-term drivers of change: plunging renewables costs, electrification, and rising carbon prices

COP26 and the IPCC have called for urgent action which has not materialized: emissions remain at record levels

·        Emissions must fall by 8% each year to secure net zero by 2050

·        Opportunities for intensified action abound – the transition is opening up unprecedented opportunities for new and existing players in the energy space

LONG-TERM FORECAST

Electricity remains the mainstay of the transition; it is growing and greening everywhere

·        With an 83% share of the electricity system in 2050, renewables are squeezing the fossil share of the overall energy mix to just below the 50% mark in 2050

·        Despite short-term raw material cost challenges, the capacity growth of solar and wind is unstoppable: by 2050 they will have grown 20-fold and 10-fold, respectively

Hydrogen only supplies 5% of global energy demand in 2050, a third of the level needed for net zero

·        Pure hydrogen use scales in manufacturing from the early 2030s and in derivative form (ammonia, e-methanol and other e-fuels) in heavy transport from the late 2030s

·        Green hydrogen from dedicated renewables and from the grid will become dominant over time; blue hydrogen and blue ammonia retain important roles in the long term

PATHWAY TO NET ZERO

We are heading towards a 2.2°C warming; war-footing policy implementation is needed to secure net zero by 2050

·        Massive, early action to curb record emissions is critical; the window to act is closing

·        No new oil and gas will be needed after 2024 in high-income countries, and after 2028 in middle and low-income countries.

Net zero means leading regions and sectors have to go much further and faster

·        OECD regions must be net zero by 2043 and net negative thereafter; China needs to reduce emissions to net zero by 2050

·        Renewable electricity, hydrogen and bioenergy are essential but insufficient: almost a quarter of net decarbonization relies on carbon capture and removal combined with land-use changes (reduced deforestation).

For more details, click below to download the DNV ENERGY TRANSITION OUTLOOK 2022 (EXECUTIVE SUMMARY):

https://maritimecyprus.com/wp-content/uploads/2022/10/DNV_Energy_Transition_Outlook_Executive_summary_2022_compressed.pdf