Energy transition statistics and insights
Electrification is expected to more than double by mid-century, enhancing energy system efficiencies and reducing the cost per unit of energy for consumers over time. However, the imminent challenge within the next decade revolves around the pace of this transition due to limitations in electric grids and the capacity of the renewable supply chain, which stand as significant bottlenecks. A faster transition is imperative considering DNV's anticipated 'most likely' forecast for our energy future, which points to a global warming increase of 2.2°C by the end of the century.
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Topics (Energy Transition)
The energy landscape - The transition - Renewables outsprint - Energy security - Progressive policy - Global emissions - Energy demand - Energy supply
Topics (Pathway to Net Zero)
Limiting global warming - Scaling of technologies - Decarbonization - The energy landscape - The transition - Renewables outsprint - Energy demand - Energy supply
The Energy Transition
The energy landscape will look very different in the space of a single generation
Emissions from oil use will peak in 2025 and those from natural gas in 2027.
From 2024, the share of renewables in the primary energy mix will grow by more than one percentage point per year, resulting in a 52% non-fossil share by 2050, up from 20% today.
As renewables dominate by 2050, power system efficiency will rise to 70% in 2050 from 44% in 2022.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
The transition is still at the starting blocks
Global energy-related emissions are still climbing and are only likely to peak in 2024. That is effectively the point at which the transition begins, even though across many nations and communities, energy-related emissions have already started to fall.
Over the last five years (2017–2022) renewables have met 51% of new energy demand and fossil sources 49%. In absolute terms, fossil-fuel use is still growing.
The ‘grab for gas’ in the wake of Russia’s invasion of Ukraine, and the disruption of the oil market, has led to high prices and a surge in new oil and gas projects.
High gas prices have also seen several countries intensify coal-fired power generation over the last 18 months, driving emissions yet higher. Natural gas is losing its status as a ‘bridging fuel’ for the transition.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Renewables outsprint fossils from the mid-2020s
It will take the next 27 years to move the energy mix from the present 80% fossil 20% non-fossil split to a 48%:52% ratio by mid-century.
From 2025 onwards, almost all net new capacity added is non-fossil.
Over the next decade, new fossil production in low- and medium-income countries will largely be nullified by reductions in high-income countries.
Coal use peaked in 2014 but has come close to that level in recent years. However, its share of primary energy falls from 26% today to 10% in 2050.
Fossil primary energy demand declines from 490 EJ to 314 EJ by 2050. Cumulatively, the fossil energy not used compared with today's use amounts to 1,673 EJ or 275,000 million barrels of oil equivalent by 2050.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Energy security is moving to the top of the agenda
Geopolitical developments over the last 18 months have brought energy security into sharp focus with the disruption of energy supplies and price shocks for energy importers. Worldwide, energy produced locally is being prioritized over energy imports.
This trend is favouring renewables and nuclear energy in all regions and coal in some regions. Reshoring and friend-shoring policies are adding to supply chain complexities and costs already strained by inflation. We have now factored into our power sector forecast the willingness of governments to pay a premium of between 6% and 15% for locally-sourced energy.
2022 saw an increase in the levelized cost of renewables in several regions, particularly with wind projects, but we expect cost reductions to return to historic learning curve rates by 2028.
In the long term, energy security and sustainability will pull in the same direction, with decarbonizing energy mixes – with wind, solar, and batteries as the main sources – increasingly shielding national energy systems from the volatility of the international energy trade.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Progressive policy is making an impact
Big decarbonization policy packages rolled out in the last year are supercharging the transition regionally and nudging it forward globally.
The Inflation Reduction Act is accelerating the transition in the US, with USD 240bn already committed in clean investments in response to the broad array of incentives under the Act.
In the EU, the EU Green Deal, REPowerEU, and Fit for 55 policy packages make Europe’s net-zero goal more realistic.
The ‘race to the top’ in clean technology amongst the advanced economies will drive global learning benefits in e.g. hydrogen and carbon capture and storage technologies. The scaling of clean tech in advanced economies will only partly benefit medium- and low-income regions where economic development and other SDGs are prioritized. De-risked financing is needed to accelerate the pace of the transition beyond leading regions.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Global emissions will fall, but not fast or far enough
DNV forecasts global energy-related CO2 emissions in 2050 to be 46% lower than today, and by 2030, emissions are only 4% lower than they are today.
The emissions DNV forecasts are associated with 2.2°C of global warming above pre-industrial levels by the end of this century.
The pace of the transition is far from fast enough for a net-zero energy system by 2050. That would require roughly halving global emissions by 2030, but our forecast suggests that ambition will not even be achieved by 2050.
Limiting global warming to 1.5°C is therefore less likely than ever.
While emissions rise, the consequences of climate change are becoming more visible and impactful, with extreme weather events becoming more frequent and damaging..
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Energy demand in 2050
By 2050, the world’s energy system will be greatly more electrified than today and hence very much more efficient. While energy services will roughly double through to mid-century, final energy demand will grow by only 10%, from 441 exajoules (EJ) to 489 EJ.
Manufacturing
- Energy demand for manufactured goods will rise by 46%. Electricity use will roughly double and is the primary reason for fossil fuels shrinking from supplying half the energy for manufactured goods today to about one third in 2050.
- Steel production will grow by 15%, but because Electric Arc Furnace method’s share in global steel production rises from 26% today to 49% in 2050, energy demand for steelmaking will peak in 2030. Coal will still meet half the subsector’s energy demand by mid-century.
- Energy demand for chemicals and petrochemicals will grow by about 20% by the mid-2030s but then decline progressively after that, mainly due to increasingly higher rates of plastic recycling towards 2050.
Energy demand in the base materials subsector will rise by one sixth, but energy demand is dampened by the decarbonization of the fuel mix and 33% increase in the use of electricity.
Cement production is expected to grow less than 20% but its energy mix will remain highly carbon intensive, with electricity and hydrogen playing only marginal roles. Decarbonization goals will rely on CCS. Construction and mining will see the highest relative increase in energy demand (50%), but almost all of that growth will be met by an expansion of electrification.
Global energy demand for buildings is set to grow nearly 30%, from 125 EJ per year in 2022 to 161 EJ per year in 2050. Buildings will displace transport as the demand sector with the largest share (33%) of the total final energy demand in 2050.
Feedstock demand for natural gas will remain stable at the current level of 18 EJ, while non-energy oil demand rises from some 22 EJ to peak at 26 EJ in mid-2030s before returning to today’s level by 2050.
Transportation
- Between now and 2050, passenger flights will grow 140%, cargo tonne-miles at sea will expand by 40%, and rail energy demand will almost double. Nevertheless, global transport activities will consume 9% less energy than at present, or 111 EJ, and there will be a 46% fall in the use of oil for transport (-50 EJ).
- Though EVs are predicted to constitute almost three-quarters (72%) of the global vehicle fleet by 2050, they will only contribute around 30% of the energy demand within the road subsector, while hydrogen-powered FCEVs will contribute an additional 5%. The smaller segment of the vehicle fleet still reliant on fossil fuel combustion will be responsible for the major portion of energy consumption. In 2050, oil will account for nearly 60% of the global road subsector's energy demand, with natural gas representing 4%.
- Passenger air trips per year are likely to rise 140% above pre-pandemic levels by 2050, but efficiency gains will see fuel use rise by only 40%. Electricity is likely to cover just 2% of the aviation energy mix in 2050, green hydrogen 4%, and sustainable aviation fuels (SAF) 12%. That leaves oil still dominant by 2050, and 21% higher than now in absolute terms.
- Cargo transportation needs will considerably outweigh efficiency improvements by 2050 ; cargo tonne-miles will therefore increase in almost all ship categories, with a total growth of 40% between 2022 and 2050. Important shifts include coal transport reducing a fourth by 2050 in tonnes, crude oil tanker increasing global tonne-miles travelled by a fourth, while oil products transport reducing by 25%. From being almost entirely oil-based today, the 2050 fuel mix is 84% low- or zero-carbon fuels and 8% natural gas (mostly LNG). Ammonia has 36% of low- and zero-carbon fuels share, e-fuels 19%, and biomass some 25%. Potential for electrification in the maritime sector is limited and thus electricity will have only 4%.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Energy supply in 2050
Global primary energy supply will reach its maximum in 2038 at 663 EJ per year, 9% higher than today, before reducing to 656 EJ in 2050.
The fossil share will fall from 80% today to 48% in midcentury. The decline is quickest for coal, going from 26% to 10% over the next 27 years, followed by oil, which falls from 29% to 17% over the same period. The natural gas share remains almost static throughout.
The share taken by nuclear energy will increase slowly over the forecast period, ending at 6% in 2050.
The renewables share will triple from 15% today to 46% by the end of the forecast period. Within renewables, the large increase will be driven by solar and wind, which will see 17-fold and 10-fold increases in primary energy supply towards 2050, respectively. Solar will reach 17% and wind 11% of the global primary energy mix in 2050, with further growth expected beyond mid-century. Bioenergy and hydropower will also grow, in both relative and absolute terms.
By mid-century, solar will see a a 13-fold growth, representing 54% of global generation capacity but only accounting for 39% of on-grid electricity due to low-capacity factors. Cost reductions are the main driver of solar’s proliferation, with the levelized cost of energy (LCOE) expected to drop to an average around USD 21/MWh by 2050 from their present level of USD 41/MWh. Concurrently, unit investment costs are forecast to decrease to USD 560/kW by 2050.
Wind will grow nine-fold growth in grid-connected power generation globally, from 2,000 TWh in 2022 to 18,300 TWh by mid-century. That translates to a share of grid electricity rising from 7% in 2022 to 30% in 2050. Over the last year, the wind power sector has faced a storm of challenges, including cost inflation, supply-chain disruptions, concerns about turbine and rotor quality, and shrinking profit margins for OEMs. As a result, DNV now predicts a minor reduction in wind power generation and installed capacity by 2050 relative to last year’s forecast, but our long-term projections remain optimistic due to rising capacity factors and steadily declining costs.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Pathway to Net Zero
Limiting global warming to 1.5°C is less likely than ever, but it is crucial to stay as far below 2°C as possible
CO2 emissions are expected to reach record levels in 2023 and to peak at even higher levels in 2024 before reducing
Given the present increase in emissions, all plausible net zero pathways now factor in an ‘overshoot’ of emissions beyond 2050 that need to be tackled by net negative emissions technology. (DNV’s pathway has an overshoot of 310 Mt CO2).
Net negative emissions at 6 Gt/yr between 2050 and 2100 to achieve 1.5°C poses a significant risk and depends on scaling of unproven technologies like direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS).
(Source: DNV, 2023, Pathway to Net Zero) - All topics ↑
Some technologies are powering ahead, but others must scale dramatically
Energy efficiency improvements need to be doubled above current levels to achieve Net Zero.
Electricity must reach 50% of the energy mix in 2050, but that is dependent on rapid grid extensions which are already subject to critical permitting and supply chain bottlenecks.
Fossil fuel consumption must fall by 80% to 2050, enabled by efficiency and fast replacement of oil, gas, and coal by renewable electricity, hydrogen, and biofuels. A massive carbon capture and removal effort, reaching 7 Gt in 2050, is essential to compensate for the remaining CO2 emissions from fossil fuels.
(Source: DNV, 2023, Pathway to Net Zero) - All topics ↑
All regions must decarbonize beyond present ambitions, but at different speeds
To reach global net zero in 2050, high-income regions and leading demand sectors must move further and faster, reaching net zero well before 2050.
Acceleration must happen in a context where very few countries are on track to achieve even their present emission targets.
For global net zero in 2050, all regions must achieve their net zero targets about 10 years earlier than stated ambition: OECD in 2040, China in 2050 and rest of the world in 2060.
Our PNZ is predicated on the UNFCCC’s principle of common but differentiated responsibility for net zero. Regions decarbonize according to their capabilities, while balancing other SDG priorities. GDP/capita is a good proxy for the required pace of transition.
Sectors and industries will also decarbonize along differing timelines, with the power sector being a first mover and achieving net zero well before 2050.
(Source: DNV, 2023, Pathway to Net Zero) - All topics ↑
The energy landscape will look very different in the space of a single generation
Emissions from oil use will peak in 2025 and those from natural gas in 2027.
From 2024, the share of renewables in the primary energy mix will grow by more than one percentage point per year, resulting in a 52% non-fossil share by 2050, up from 20% today.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
The transition is still at the starting blocks
Global energy-related emissions are still climbing and are only likely to peak in 2024. That is effectively the point at which the transition begins, even though across many nations and communities, energy-related emissions have already started to fall.
Over the last five years (2017–2022) renewables have met 51% of new energy demand and fossil sources 49%. In absolute terms, fossil-fuel use is still growing.
The ‘grab for gas’ in the wake of Russia’s invasion of Ukraine, and the disruption of the oil market, has led to high prices and a surge in new oil and gas projects.
High gas prices have also seen several countries intensify coal-fired power generation over the last 18 months, driving emissions yet higher. Natural gas is losing its status as a ‘bridging fuel’ for the transition.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Renewables outsprint fossils from the mid-2020s
It will take the next 27 years to move the energy mix from the present 80% fossil 20% non-fossil split to a 48%:52% ratio by mid-century.
From 2025 onwards, almost all net new capacity added is non-fossil.
Over the next decade, new fossil production in low- and medium-income countries will largely be nullified by reductions in high-income countries.
Coal use peaked in 2014 but has come close to that level in recent years. However, its share of primary energy falls from 26% today to 10% in 2050.
Fossil primary energy demand declines from 490 EJ to 314 EJ by 2050. Cumulatively, the fossil energy not used compared with today's use amounts to 1,673 EJ or 275,000 million barrels of oil equivalent by 2050.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Energy demand in 2050
Feedstock demand for natural gas will remain stable at the current level of 18 EJ, while non-energy oil demand rises from some 22 EJ to peak at 26 EJ in mid-2030s before returning to today’s level by 2050.
Transportation
- Between now and 2050, passenger flights will grow 140%, cargo tonne-miles at sea will expand by 40%, and rail energy demand will almost double. Nevertheless, global transport activities will consume 9% less energy than at present, or 111 EJ, and there will be a 46% fall in the use of oil for transport (-50 EJ).
- Though EVs are predicted to constitute almost three-quarters (72%) of the global vehicle fleet by 2050, they will only contribute around 30% of the energy demand within the road subsector, while hydrogen-powered FCEVs will contribute an additional 5%. The smaller segment of the vehicle fleet still reliant on fossil fuel combustion will be responsible for the major portion of energy consumption. In 2050, oil will account for nearly 60% of the global road subsector's energy demand, with natural gas representing 4%.
- Passenger air trips per year are likely to rise 140% above pre-pandemic levels by 2050, but efficiency gains will see fuel use rise by only 40%. Electricity is likely to cover just 2% of the aviation energy mix in 2050, green hydrogen 4%, and sustainable aviation fuels (SAF) 12%. That leaves oil still dominant by 2050, and 21% higher than now in absolute terms.
- Cargo transportation needs will considerably outweigh efficiency improvements by 2050 ; cargo tonne-miles will therefore increase in almost all ship categories, with a total growth of 40% between 2022 and 2050. Important shifts include coal transport reducing a fourth by 2050 in tonnes, crude oil tanker increasing global tonne-miles travelled by a fourth, while oil products transport reducing by 25%. From being almost entirely oil-based today, the 2050 fuel mix is 84% low- or zero-carbon fuels and 8% natural gas (mostly LNG). Ammonia has 36% of low- and zero-carbon fuels share, e-fuels 19%, and biomass some 25%. Potential for electrification in the maritime sector is limited and thus electricity will have only 4%.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
Energy supply in 2050
The fossil share will fall from 80% today to 48% in mid century. The decline is quickest for coal, going from 26% to 10% over the next 27 years, followed by oil, which falls from 29% to 17% over the same period. The natural gas share remains almost static throughout.
The renewables share will triple from 15% today to 46% by the end of the forecast period. Within renewables, the large increase will be driven by solar and wind, which will see 17-fold and 10-fold increases in primary energy supply towards 2050, respectively. Solar will reach 17% and wind 11% of the global primary energy mix in 2050, with further growth expected beyond mid-century. Bioenergy and hydropower will also grow, in both relative and absolute terms.
By mid-century, solar will see a a 13-fold growth, representing 54% of global generation capacity but only accounting for 39% of on-grid electricity due to low-capacity factors. Cost reductions are the main driver of solar’s proliferation, with the levelized cost of energy (LCOE) expected to drop to an average around USD 21/MWh by 2050 from their present level of USD 41/MWh. Concurrently, unit investment costs are forecast to decrease to USD 560/kW by 2050.
Wind will grow nine-fold growth in grid-connected power generation globally, from 2,000 TWh in 2022 to 18,300 TWh by mid-century. That translates to a share of grid electricity rising from 7% in 2022 to 30% in 2050. Over the last year, the wind power sector has faced a storm of challenges, including cost inflation, supply-chain disruptions, concerns about turbine and rotor quality, and shrinking profit margins for OEMs. As a result, DNV now predicts a minor reduction in wind power generation and installed capacity by 2050 relative to last year’s forecast, but our long-term projections remain optimistic due to rising capacity factors and steadily declining costs.
(Source: DNV, 2023, Energy Transition Outlook) - All topics ↑
