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About this year’s report

Looking beyond today’s high energy prices to see what the longer-term energy future holds is difficult. That is what this Outlook does.

Clearly, we are witnessing an energy transition in many regions and for many communities and individuals. Globally, however, record emissions from fossil energy are on course to move even higher next year. Up to the present, renewables have met some, but not all, of the world’s additional energy demand. Optically, the transition seems to be in stall mode, with high oil and gas prices fuelling an exploration surge while many renewable projects are experiencing an increase in cost due to inflationary and supply-chain pressures.

So, when will the real global transition begin?

Remi Eriksen, Group President and CEO of DNV

Our prediction is that emissions from oil use will peak in 2025 and those from natural gas in 2027. EV uptake and solar PV installations, both of which are now at record levels, are set to continue strongly.

  • Remi Eriksen ,
  • Group President and CEO ,
  • DNV

Moreover, both the Fit-for-55 and RePowerEU policies and the Inflation Reduction Act in the US are already demonstrating powerfully that decarbonization policies can work on a grand scale. In our forecast, non-fossil sources constitute 52% of the energy mix in 2050, a sharp increase from the 20% they represent today. 

We have frequently used numbers to place a dimension on two corners of the energy trilemma: affordability (such as levelized cost and prices) and sustainability (such as carbon emissions intensity). So far, the third corner of the trilemma — energy security — has been largely viewed in a qualitative way. In the past 18 months the world has experienced the consequences of the ‘grab for gas’ in the wake of Russia’s invasion of Ukraine and the reversion to coal in some regions as a cheaper alternative to gas. We have also seen increased attention to renewable projects most places, as domestically-sourced energy is harder to disrupt; and many governments are looking at nuclear with renewed interest. Local sourcing of both energy and energy infrastructure is emerging as a prominent national objective. 

This year, our research team has revised our power sector forecast to better reflect the existing and future willingness of countries to pay a premium for locally-sourced energy - and that has notably impacted our results. For example, for the Indian Subcontinent we now forecast a slower transition with more coal in the energy mix, and in Europe the transition is accelerating with the alignment of climate, industrial and energy security objectives. 

Short-term energy forecasting has been a thankless task in the recent context of the pandemic, war, and price shocks. However, within our system-dynamics approach, the long lines of development are clear: the energy landscape will look very different in the space of a single generation. We forecast a 13-fold increase in solar and wind electricity production by mid-century. 

Electrification will more than double between now and 2050, bringing efficiencies to the energy system, which, as we detail in this report brings down the cost of per unit of energy for consumers in the longer run. However, in the coming ten years, a critical issue is how quickly that can happen with a lack of electric grids and renewable supply-chain capacity emerging as critical bottlenecks to a faster transition. 

And a faster transition is most definitely needed because our ‘most likely’ forecast for our energy future through to 2050 translates into global warming of 2.2°C by the end of this century. Achieving a net-zero energy system by 2050 to secure a 1.5°C warming future is more difficult than ever. That does not mean we should not be aiming for that target. With more expansive policies promoting renewable electricity and other zero-carbon solutions not just in the high-income world, but globally, we have the means to keep the world on track to be at, or very near, net zero by mid-century.

Remi Eriksen, Group President and CEO, DNV

How did we make this report? 

This annual Energy Transition Outlook presents the results from our independent model of the world’s energy system. It covers the period through to 2050 and forecasts the energy transition globally and in 10 world regions.

Our approach 

DNV presents a single ‘best estimate’ forecast of the energy future, with sensitivities considered in relation to our main conclusions. However, we also publish our ‘Pathway to Net Zero Emissions’ scenario, which is effectively a ‘backcast’ of what we consider to be a feasible, albeit challenging, pathway for the world to achieve net-zero emissions by 2050 to secure a 1.5°C warming future. 

Our forecast focuses on long-term dynamics, not short-term imbalances. However, given the rising impact of energy security concerns, we describe how this impacts our forecast in the opening pages. There is also a detailed description of our methodology and the foundations of our forecast model.

Independent view 

DNV was founded in 1864 to safeguard life, property, and the environment. We are owned by a foundation and are trusted by a wide range of customers to advance the safety and sustainability of their businesses. 70% of our business is related to the production, generation, transmission, and transport of energy. Developing an independent understanding of, and forecasting, the energy transition is of strategic importance to both us and our customers. 

This Outlook draws on the expertise of over 100 experts in DNV and many external experts. 

More details on our methodology and model can be found in the report. 

Supplement reports 

In addition to the main Energy Transition Outlook report, we also publish separate reports, where we deep-dive into a sector, technology or topic. 

Explore our companion reports

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