The scramble to meet creeping electricity demand will redraw the energy map

Global energy flow lines are set to be dismantled from 2024, according to the latest report from Rethink Energy. In its annual forecast of electricity demand and supply to 2050, the company explains how the granular, sector-by-sector approach to decarbonization across the world will redefine not only How? ‘Or’ What energy is exchanged, but WHO should benefit from the adoption of clean technologies as electricity demand triples over the next few decades.

The next three decades will see a massive shift towards the electrification of all energies. Rethink predicts that by 2050, 92% of electricity will come from net-zero sources, up from 41% today.

This report is the second in the Rethink Energy report Annual primary electricity (APE) Forecast – APE 2.0offering an unflinching perspective on the rise of global electrification in the race to net zero emissions. Combining modeling across a myriad of sectors and countries, it describes not only how much electricity each sector will need until 2050, but how and where it will be delivered from a radical increase in renewable capacity. in the world.

According to the report, efficiency gains in existing demand areas will continue to decouple economic growth from electricity demand and, to a greater extent, carbon emissions. However, as companies and governments are increasingly held accountable for their decarbonization efforts, sectors from steel to shipping will see their fuel sources shift to electricity.

Rethink Energy predicts that global electricity production will more than triple by 2050 – reaching 80,416 TWh per year – driven by advanced economies seeking to decarbonize rapidly, as well as emerging economies with rapid population growth.

Displacing carbon-based fuel sources for home heating, as well as air conditioning in a warming world, will provide the greatest source of growth through 2050, with decarbonization options already readily available and economically advantageous . This will be closely followed by the unprecedented acceleration in the adoption of electric vehicles in all types of transport, which has already begun, driven by mandates to phase out the sale of ICE vehicles and a change in direction. from almost every major automaker.

Likewise, with four of the world’s five largest steelmakers also committing to net zero emissions, the industry will be rocked across the board – with losses among those who refuse to adapt. While many customers will be happy to pay a green premium for green steel, ammonia or cement, the negative pressure from carbon taxes will see new production methods come to market much faster than expected.

Hydrogen is seen as one of the most attractive opportunities for investors thanks to this revolution, with demand increasing more than 10 times to reach 735 million tonnes per year by 2050. While “green” hydrogen from renewable sources exceeds “grey” hydrogen in the late 2020s, the switch to hydrogen as a fuel source will become irresistible for the described sectors where direct electrification is inefficient or impractical. Its use in feedstocks, transport and industry will see more than a third of all electricity used to produce hydrogen by 2050.

But the “electrification” of these industries, whether or not they use hydrogen, makes little sense if the electricity supplied is not green. As the price of solar plus storage in particular continues to fall to provide uninterrupted power, even the cheapest natural gas plants will become stranded assets in the early 2030s, making any investment in new coal or gas an inexcusable waste of money. Companies that don’t see this will go bankrupt, as will oil companies that fail to make the transition as oil demand peaks in the late 2020s, as electric vehicles dominate all global markets.

These moments will only accelerate in the race for energy independence sparked by Russia’s invasion of Ukraine, as attitudes shift towards securing electricity from decentralized renewable energy sources. and national. As wind and solar potential become more attractive than crude or shale reserves, the entire makeup of the global energy trade will be dismantled. The power of Russia, the Middle East and even the United States will diminish if they fail to establish new energy exports.

These are the inflection points that other groups of analysts have not seen in the past. “APE2.0 provides a true assessment of the energy transition, without pandering to the large number of gray-haired laggards in the sector,” said report lead analyst Harry Morgan. “Rather than using primary energy metrics, which skew the numbers in favor of fossil fuels by ignoring their inefficiency, the numbers given in TWh reflect the useful power delivered, helping to demonstrate the true advantage of wind and solar.”

This approach also makes it possible to take into account the losses associated with the use of energy storage, in a system capable of providing uninterrupted power from clean sources. With the cost of wind, solar, hydrogen and batteries driving global energy system costs down, Rethink predicts that by 2050, 92% of electricity will come from net-zero sources, up from 41% % today.

Leveraging Rethink Technology Research’s 20 years of experience in studying industry change, APE.2.0 is a unique report that aggregates the company’s research across the diverse areas of demand with world-generation technologies up to in 2050. With a model like this, you can plan future revenue streams. for various energy structures, from fuel transportation to the availability of hydrogen for aviation, or how solar investments will increase profitability year after year.

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