IEA (2022), World Energy Outlook 2022, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2022, License: CC BY 4.0 (report); CC BY NC SA 4.0 (Annex A)
In 2021, the IEA published its Net Zero by 2050: A Roadmap for the Global Energy Sector, which sets out a narrow but achievable pathway for the global energy sector to reach net zero emissions by 2050. However, much has changed in the short time since that report was published.
The global economy rebounded at record speed in 2021 from the COVID-19 pandemic, with GDP growth reaching 5.9%. As energy intensity improvements stalled, global energy demand increased by 5.4%. Surging energy demand was in part met by increased use of coal, resulting in a 1.9 gigatonnes (Gt) jump in emissions in 2021, the largest annual increase in global CO2 emissions from the energy sector ever recorded. This brought total CO2 emissions from the energy sector to 36.6 Gt in 2021. Recent investment in fossil fuel infrastructure not included in the 2021 Net Zero Emissions by 2050 Scenario would result in 25 Gt of emissions if run to the end of its lifetime (around 5% of the remaining carbon budget for 1.5 °C). At the same time, 2021 also saw renewables-based electricity generation reach an all-time high, a record more than 500 terawatt-hours (TWh) above the level in 2020.
- In 2021, the IEA published its report Net Zero by 2050: A Roadmap for the Global Energy Sector. However, in the short time since then much has changed. The global economy has rebounded from the Covid-19 pandemic, and the first global energy crisis has seen world energy prices touching record levels in many markets, bringing energy security concerns to the fore.
- In 2021, emissions rose by a record 1.9 Gt to reach 36.6 Gt, driven by extraordinarily rapid post-pandemic economic growth, slow progress in improving energy intensity, and a surge in coal demand even as renewables capacity additions scaled record heights. Recent investment in fossil fuel infrastructure not included in our 2021 NZE Scenario would result in 25 Gt of emissions if run to the end of its lifetime (around 5% of the remaining carbon budget for 1.5 °C).
- Despite these mostly discouraging developments, the pathway detailed in the Net Zero Emissions by 2050 (NZE) Scenario remains narrow but still achievable. This update to the NZE Scenario offers a comprehensive account of how policymakers and others could respond coherently to the challenges of climate change, energy affordability and energy security.
- Between 2021 and 2030, low emissions sources of supply grow by around 125 EJ in the NZE Scenario. This is equivalent to the growth of world energy supply from all sources over the last fifteen years. Among low emissions sources, modern bioenergy and solar increase the most, rising by around 35 EJ and 28 EJ respectively to 2030. Over the period to 2050, however, the largest growth in low-emissions energy supply comes from solar and wind. By 2050, unabated fossil fuels for energy uses account for just 5% of total energy supply: adding fossil fuels used with CCUS and for non-energy uses raises this to slightly less than 20%.
- In the NZE Scenario, electricity becomes the new linchpin of the global energy system, providing more than half of total final consumption and two-thirds of useful energy by 2050. Total electricity generation grows by 3.3% per year to 2050, which is faster than the global rate of economic growth across the period. Annual capacity additions of all renewables quadruple from 290 GW in 2021 to around 1 200 GW in 2030. With renewables reaching over 60% of total generation in 2030, no new unabated coal-fired plants are needed. Annual nuclear capacity additions to 2050 are nearly four-times their recent historical average.
- Increased supplies of clean energy are complemented in the NZE Scenario by measures to save energy, bringing benefits in terms of emissions reductions, affordability and energy security. In the NZE Scenario, energy intensity improvements to 2030 are nearly three times faster than over the past decade. In 2030, energy savings from energy efficiency, material efficiency, and behavioural change amount to around 110 EJ, equivalent to the total final consumption of China today.
- End-use sectors all achieve emissions reductions of over 90% by 2050. Hydrogen and hydrogen-based fuels are deployed in heavy industry and long-distance transport, and their share in total final consumption reaches around 10% in 2050. Bioenergy use is kept to around 100 EJ in the interests of sustainability and reaches around 15% of total final consumption in 2050. CO2 capture totals 1.2 Gt in 2030, rising to 6.2 Gt in 2050, and more than 60% of this occurs in industry and other fuel transformation sectors.
- The NZE Scenario requires a large increase in investment in clean energy. Energy investment accounted for just over 2% of global GDP annually between 2017 and 2021, and this rises to nearly 4% by 2030 in the NZE Scenario. Electricity generation from renewables sees one of the largest increases, rising from USD 390 billion in recent years to USD 1 300 billion by 2030. This level of spending in 2030 is equal to the highest level ever spent on fossil fuel supply (USD 1.3 trillion spent on fossil fuels in 2014).
- There are some positive indications that clean energy technology is now rapidly scaling up. Announced EV battery production capacity for 2030 is only 15% lower than the level of battery demand underpinning the NZE Scenario in the same year, while announced expansions of solar PV production capacity would be essentially sufficient to achieve the level of deployment envisaged in the NZE Scenario, if they are successfully delivered on time. Assuming full implementation of all announced manufacturing capacity expansions including speculative projects, the cumulative output of electrolyser manufacturing capacity could reach 380 GW by 2030, which is still little more than half of 2030 needs in the NZE Scenario.
- There are however many areas where progress is well short of what is envisaged in the NZE Scenario. The path to success requires policy makers to do much more to provide signals on the demand side, to develop the clean technology supply chain as a whole, to ensure that supply chains are diverse and resilient, and to promote the coordinated growth of different parts of particular supply chains.
- Total energy sector employment increases from just over 65 million today to 90 million in 2030 in the NZE Scenario. New jobs in clean energy industries reach 40 million by 2030, outweighing job losses in the fossil fuel-related industries. Fossil fuel supply jobs decrease by 7 million by 2030 in the NZE Scenario, with coal supply seeing the sharpest decline as mechanisation and decarbonisation efforts lead to further downsizing of the industry. Shortages of skilled labour in clean energy construction projects are already starting to be seen, underlining the importance of strategic and proactive labour policies to build up the workforce needed for the rapid expansion of clean energy technologies.