The rapidly falling costs of renewable energy with a complementary role for clean hydrogen technology in sectors that are difficult to electrify are the enablers.
With the pressure on for faster and more aggressive action on carbon emissions and the climate to meet the 2050 Paris Agreement commitments, a new plan from the Energy Transitions Commission (ETC) sets out actions to achieve a net zero greenhouse gas economy over the next 30 years that it states to be both technically and economically feasible.
The Commission, a coalition of leaders from more than 45 major energy producers and users, estimates that electricity could represent up to 70% of final energy demand by 2050, versus 20% today, with total electricity use expected to grow as much as five times in the coming decades.
The rapidly falling costs of renewables and storage solutions make it possible to achieve the required massive expansion of clean power systems at low cost, according to the report.
Wind and solar must increase from today’s 10% of total electricity generation to about 40% by 2030 and over 75% by 2050. This will require annual wind and solar installations to grow by five to seven times by 2030 and more than 10 times by 2050.
At the same time there must be parallel deployment of other zero-carbon generation technologies including hydro and nuclear, flexibility solutions, storage and transmission and distribution network upgrades and digitalisation in order to deliver the zero carbon power systems at scale.
For example, the flexibility requirements are estimated at 5-15% of total generation for daily balancing and 10-25% for seasonal balancing. The former would be provided by batteries, pumped hydro and demand management and the latter through regional interconnections, wind and solar overbuild and hydrogen or carbon capture peaking plants.
The Commission believes these levels of deployment are within reach if clear national strategies for decarbonisation are put in place and appropriate power market design unlocks private financial flows.
The investment requirement is estimated at over $80 trillion globally over the next 30 years, corresponding to an average $2.5 trillion per annum. Of this approximately 80% is required for the renewable power.
The Commission says that corresponding to less than 1.5% of global GDP, this is “manageable in the current macroeconomic environment”.
Clean hydrogen role
Clean hydrogen is considered to play a key complementary role in decarbonising sectors where direct electrification is likely to be technologically very challenging or prohibitively expensive, such as in steel production and long-distance shipping.
A net zero carbon emissions economy by 2050 is estimated to need to use about 500-800Mt of clean hydrogen per annum, which is a five to seven fold increase compared to hydrogen use today.
Green hydrogen, produced via the electrolysis of water, is likely to be the most cost-competitive and therefore the major production route in the long-term, accounting for approximately 85% of total production by 2050. However, blue hydrogen, produced from natural gas with carbon capture and low methane leakage also will play an important role in transition.
An initial ramp up to reach 50Mt of production at costs well below $2/kg by 2030 is key to making the mid-century growth targets achievable, the Commission says. In addition public policy is essential to drive its uptake at pace.
Commenting on the plan, Lord Adair Turner, chair of the ETC, says that the technologies to completely decarbonise electricity generation at low cost are now available.
“Electrification is the key to zero carbon production in most of the economy. By mid-century even rich developed countries will need 2-3 times as much electricity as today, and developing economies 5-10 times as much,” he says.
“Governments, businesses and investors need to recognise the scale of the new industrial revolution required and the huge opportunities it creates.”