Imagine a world where 85% of all electricity comes from renewable sources, there are over one billion electric vehicles on the road, and we are on track to preserve a livable climate for our children and future generations. We already know that every dollar spent on energy transition would pay off up to seven times: Global economy would save up to $160 trillion by shifting to renewables, electric cars. According to IRENA’s new report, the most cost-effective strategy to achieve a “climate-safe future” — keeping global warming below 2 degrees Celsius (3.6 degrees Fahrenheit) — is an accelerated energy transition to renewables and energy efficiency coupled with electrification of key sectors like transportation. 90% of the reductions (assuming emissions reduced by 70%, achieving a 2C scenario) could come through renewable energy and energy efficiency (see chart).
Imagine a world where 85% of all electricity comes from renewable sources, there are over one billion electric vehicles on the road, and we are on track to preserve a livable climate for our children and future generations.
The International Renewable Energy Agency (IRENA) reported this week that such a future is not merely possible by 2050, but thanks to plummeting prices in key clean energy technologies, the cost of saving the climate has dropped dramatically.
In fact, according to IRENA’s new report, the most cost-effective strategy to achieve a “climate-safe future” — keeping global warming below 2 degrees Celsius (3.6 degrees Fahrenheit) — is an accelerated energy transition to renewables and energy efficiency coupled with electrification of key sectors like transportation.
This Renewable Energy Roadmap (REmap) scenario “would also save the global economy up to USD 160 trillion cumulatively over the next 30 years in avoided health costs, energy subsidies and climate damages.”
At the same time, IRENA reports, “every dollar spent on energy transition would pay off up to seven times.”
IRENA’s reference case scenario, which incorporates current commitments under the 2015 Paris climate agreement, foresees flat energy-related CO2 emissions for the next three decades.
But those emissions must be reduced by 70% to have a good chance of keeping warming below 2 degrees Celsius. The REmap scenario achieves more than 90% of the necessary reductions through renewable energy and energy efficiency (see chart).
The centerpiece of this strategy is taking advantage of the plummeting cost of renewable energy — especially wind and solar power — to transform the electricity sector. As the IRENA report notes, “in the Power sector, solar and wind energy are on the path to dominance.”
And in their REmap case, wind and solar power by themselves account for the majority of electricity produced in 2050 (see chart).
Another core element of this rapid transition to a low-carbon global economy is to electrify as many of the sectors of the economy as possible — what IRENA calls “Deep Electrification” — to take advantage of the emergence of cheap renewables.
“Electricity would progressively become the central energy carrier,” the report explains, “growing from a 20% share of final consumption to an almost 50% share by 2050.”
One of the most important sectors to electrify in the coming decades is transportation, where improved performance and rapidly dropping prices for batteries have enabled an electric vehicle (EV) revolution in recent years. There are currently some five million EVs on the road today. IRENA projects that in their rapid transition case, which includes investing heavily in EV charging infrastructure, a billion EVs could be on the road in three decades.
Currently, renewables provide about one sixth of the world’s total final energy consumption. But with rapid penetration of both renewables and electrification technologies in key sectors, IRENA projects renewables could provide a remarkable two thirds of all energy consumed around the world.
The centerpiece of this strategy is taking advantage of the plummeting cost of renewable energy — especially wind and solar power — to transform the electricity sectorAnother core element of this rapid transition to a low-carbon global economy is to electrify as many of the sectors of the economy as possible — what IRENA calls “Deep Electrification” — to take advantage of the emergence of cheap renewables.
Thus, another critical sector to decarbonize is heating, much of which is done by natural gas today. That requires a two-pronged strategy: a big push for solar thermal, including solar hot water heaters, and a 16-fold increase in high-efficiency electric heat pumps.
The third key component of the REmap case is a very large investment in energy efficiency in transportation, buildings, and industry. Important measures range from the very simple, such as increased insulation, to the more high tech, such as the use of the latest LED lighting technologies.
Previous research from the International Energy Agency found that the health and productivity benefits from green buildings and high-efficiency industrial processes actually exceeded the energy savings and could increase cumulative economic output through 2035 by $18 trillion.
Finally, IRENA examined the tremendous employment benefits that would come from an aggressive transition to a low-carbon economy.
The report finds “new jobs associated with the transition (i.e. renewable generation, energy efficiency and energy flexibility) significantly outweighing the jobs lost in the fossil fuel sector.” Total net new jobs would number 11 million. At the same time, significant resources should be devoted to helping those in sectors losing jobs.
The bottom line is that thanks to the remarkable innovation in key clean energy technologies in recent years, a transition to a low-carbon economy is not only feasible, it would have enormous benefits in improved health, reduced climate impacts, and employment.
From 2010-2018, l-ion batteries dropped in price by 85%. BNEF says gas car sales ‘have already peaked and may never recover’ as battery prices plunge: The rise of electric cars means peak oil demand may only be a decade away, explains Bloomberg report.
Plunging battery prices are bringing the age of gasoline-powered cars to an end faster than anyone expected, according to a new report from Bloomberg NEF (BNEF). That means peak oil demand will also arrive sooner than expected — which in turn means ambitious climate goals will be more affordable than previously thought.
“Sales of internal combustion passenger vehicles have already peaked, and may never recover,” BNEF’s Electric Vehicle Outlook 2019 finds.
Electric vehicle (EV) sales are now seriously eating into internal combustion engine (ICE) vehicle sales — and that trend is projected to accelerate in the coming years.
As a result, BNEF projects that oil demand will peak in 2028 for passenger vehicles, and in 2035 for commercial vehicles. “We expect demand in both sectors combined to peak in 2030,” a BNEF spokesperson said.
Thus, the rapid rise in EV sales will drive a slowdown, a peak, and then a drop in oil consumption. And that means oil prices and the value of investments in oil companies will fall.
Other findings in BNEF’s chart-filled report are equally astonishing. For instance, the EV adoption rate is so rapid that EVs will reach 50% of new car sales in both China and Europe around 2030 — at which point EVs will make up some 40% of new U.S. passenger vehicle sales.
What is driving the rapid adoption of EVs? First and foremost, it’s the sharp and ongoing drop in battery prices. From 2010 through 2018, the average lithium-ion battery pack dropped a remarkable 85%, from $1,160 to $176. BNEF projects that the sharp price drop will continue, as average battery pack prices “reach $87/kWh in 2025 and $62/kWh in 2030” — a further drop of 65% from 2018 prices.
These price drops mean that the economics of owning an EV will quickly surpass that of owning a gasoline-powered car.
In three years, EVs will actually be cheaper up front than combustion vehicles, which will make EVs the increasingly attractive option. After all, they are already superior to gasoline cars in many key respects: EVs have faster acceleration, lower maintenance costs, zero tailpipe emissions, and a much lower per-mile fueling cost than petrol cars , even when running on carbon-free fuel.
Also, as batteries get cheaper, EV ranges are getting longer — 300, 400, or even 500 miles.
The time needed to charge a battery is also dropping fast. Some chargers take only 20 minutes to charge an EV, and new chargers can cut that time in half. Ultimately, next-generation batteries may be chargeable in three to five minutes.
This rapid adoption of batteries and EVs — combined with the accelerating price drops and adoption rates for renewable energy — mean that the world can decarbonize the transportation sector faster and cheaper than we thought just a few years ago.