Energy transition outlook 2018 – A global and regional forecast to 2050

Over the next three decades, the world’s energy system will become substantially cleaner, more affordable, and more reliable. By 2050, renewables will produce 75% of Europe’s electricity. Understanding this energy transition is critical for businesses, investors, and regulators.

Future gross domestic product (GDP) is driven by population and productivity growth and is a key driver for energy demand. Gross Domestic Product (GDP) will grow by 130% over the same period, thus the energy fraction of GDP will decline from 5,5% in 2016 to 3,1% in 2050. In 2050 an average person will only need 70 GJ per year, in contrast to today, where each person uses 100 GJ.

For systems dominated by variable renewables, which will be the case for several regions after 2040, storage capacity will be crucial. This is accounted for in the forecast by adding storage costs to the renewables’ installations as they begin to dominate, which happens towards 2050 in several regions.

DNV expect global total final energy annual demand to be 450 exajoules (EJ) per year by 2050 compared with 400 EJ in 2016. Demand peaks in 2035 at 470 EJ per year (EJ/yr), then declines slightly towards mid-century. Before the peak, demand grows at 0.9% per year, but this rate slowly declines due to both energy-efficiency improvements and electrification outpacing the continued, but slowing, growth in population and productivity.

Forecast:

  • The total transport demand grows from 110 EJ today, peaking at 118 EJ in 2026 and then reduces to 90 EJ in 2050, declining from its present 27% of total energy demand to 20% in 2050
  • The worlds carbonized fuel consumption will continue to increase until 2030 and thereafter decline towards 2050
  • Oil demand will peak in the 2020’s and natural gas will take over as the biggest energy source in 2026. By 2050, gas will form a quarter of the global energy mix
  • Oil’s share of the overall energy demand will be reduced from the present 29% to 15% in 2020
  • Annual global expenditures for fossil fuels is estimated to drop significantly from around 3,4 trillion in 2016 to USD 2,1 trillion in 2050
  • The market for wind power is global. The historical cost learning rate for the base turbine and associated technologies in onshore wind has been around 18%. The cost is predicted to decrease to 16% by the year 2050
  • Wind power will represent 12% of the world’s total primary energy demand in 2050
  • The world’s use of biomass has grown 53% over the last 30 years. In electricity production biomass usage will increase by 150%
  • The year 2044 will be the last year when fossil energy expenditures will be higher than non-fossil expenditures
  • The first emission-free year is predicted to be the year 2090

 

Full report: Energy transition outlook 2018 – A global and regional forecast to 2050

By Martine Farstad