THE GLOBAL ECONOMY IS MOVING TOWARDS HIGH ELECTRIFICATION
Today grid power supplies just over 20% of global final energy demand. By contrast, coal, natural gas and oil currently supply over 60% of power generation globally, with almost 40% coming from coal.
This is all about to change. The rapid deployment of low-cost renewable energy is a huge milestone in the energy transition...
Forward-thinking policy and technological innovation have generated favourable market economics, sparking a new revolution that is just beginning to unfold.
A country like India, where coal is still prevalent, will be able to generate 35% of a fast-growing power demand from solar and wind by 2030 at no extra cost for consumers. But economic growth, combined with the expected electrification of a wide range of activities in the economy which are currently powered by fossil fuels (in particular the switch to electric vehicles in road transport and to electric heating in buildings), will cause global electrical power demand to boom: it is expected to at least double by 2040 and could increase by a factor of five by 2060 as new technologies will enable the electrification of a wider range of applications, such as high-temperature heat in industry, pushing power supplies above 65% of global final energy demand.
This means that, within the next two decades, we have to simultaneously replace current power generation from coal, natural gas and oil with zero-carbon sources, while doubling the existing output of electricity using, again, zero-carbon power sources. This two-fold challenge – doubling the output of electricity and making it 100% clean – is one of the greatest tasks for humanity, and it will require all economically viable sources of clean energy to reach maximum deployment capacity. To put this in numbers, global renewables (excluding hydro) today produce 2,500 TWh per year. Renewables and zero-carbon power sources would need to be deployed sufficiently fast to cover a total projected electricity demand of around 40,000 TWh by 2040 – a 16x increase in the span of 20 years and a 40x increase by mid-century. Meeting this target would require, on average, that every year from now to 2040, enough clean electricity capacity is installed to serve an additional 2,000 TWh – nearly the same output of all global renewables (excluding hydro) installed to date.
MEETING THE POWER DECARBONISATION CHALLENGE WILL REQUIRE MULTIPLE FORMS OF ZERO-CARBON POWER
The urgency of achieving zero-carbon power systems by 2050 – which is an essential prerequisite to tackle the climate crisis – therefore dictates maximum achievable deployment rates of all renewable and other cost-competitive zero-carbon power sources.
Analysis of power demand-supply economics shows that renewables will be the lowest cost new-build power option in most countries within a decade.
This remains true if we add to variable renewables
The cost of managing flexibility (i.e. meeting demand peaks when the wind does not blow and the sun does not shine, either by using energy stored at an earlier point in time or by using dispatchable peaking plants) and
The compared “all-in” cost of renewables with baseload power generation on a like-for-like basis. Whilst it is undoubtedly technically and economically possible to manage a power system relying at 85% on variable renewables (with a combination of energy storage, hydro, bioenergy and gas with CCS to meet demand peaks) and very likely that renewables and storage will cover the lion’s share of all power demand by the end of the century, the pace at which this transition can realistically occur remains highly uncertain.
Decarbonising the power system by mid-century using only wind and solar would only be achievable in a scenario of stagnating power demand. which would not deliver the deep decarbonisation we need to avert dangerous levels of climate change. This is especially true in geographies with fast-growing populations and economies.
Source : Article by SYSTEMIQ.Earth