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Transforming the Energy System

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Transforming the Energy System TRANSFORMING THE ENERGY SYSTEM – AND HOLDING THE LINE ON RISING GLOBAL TEMPERATURES n n KEY FINDINGS AND NUMBERS USD 95 trillion CURRENT PLANS USD 110 trillion +15 ENERGY TRANSFORMATION trillion USD more needed Fossil fuels - supply Electrification Fossil fuels - power Power grids and energy flexibility Nuclear Biofuels Energy e ciency Hydrogen Renewables - power Others Renewables - end-uses Fossil fuels - supply Fossil fuels - power Nuclear Energy e ciency Renewables – power +15 Renewables – end-uses 95 USD trillion 110 USD trillion more needed KEY NUMBERS USD trillion Electrification Power grids and energy flexibility Biofuels USD 95 trillion investmentsCURRENT PLANS in USD Hydrogen USD 110 trillion +15 trillion ENERGY TRANSFORMATION trillion USD +15 the sector bymore needed compared to Fossil fuels - supply Others Electrification 2050Fossil fuels - topower achievePower grids and energy flexibility Nuclear Biofuels Energy e ciency Hydrogen Renewables - power 110 Others CURRENT PLANS USD trillion ENERGYRenewables - end-uses TRANSFORMATION Fossil fuels - supply Fossil fuels - power Nuclear Energy e ciency Renewables – power 95 110 Renewables – end-uses USD trillion USD trillion Electrification Power grids and energy flexibility Biofuels Hydrogen Others Increased investment and changing energy mix Investment in Energy Efficiency: USD 37 trillion vs. USD 29 trillion Investment in Renewable USD Energy: 27 trillion vs. USD 12 trillion Power Changing trade, End uses Biofuels spending and investment patterns USD USD USD higher 22.5 trillion 2.5 trillion 2 trillion GDP vs. USD 12 trillion vs. USD 1 trillion vs. USD 1 trillion 2.5% more jobs* 7million * Estimated 0.15% higher economy-wide net employment in 2050 with ENERGY TRANSFORMATION compared to CURRENT PLANS KEY FINDINGS he Paris Agreement sets a goal of “[h]olding the Around the world today, national energy plans and T increase in the global average temperature to well Nationally Determined Contributions (NDCs) fall far below 2°C above pre-industrial levels and pursuing short of the emissions reductions needed. Currently, efforts to limit the temperature increase to 1.5°C the world may exhaust its “carbon budget” for energy- above pre-industrial levels” to significantly reduce related emissions until the end of the century in as the risks and impacts of climate change. The world few as ten years. To hold the line at 1.5°C, cumulative today has less than two decades to make serious energy-related carbon-dioxide (CO2) emissions must cuts in carbon emissions. If we fail, according to the be 400 gigatons (Gt) lower by 2050 than current Intergovernmental Panel on Climate Change (IPCC, policies and plans indicate. 2018), we may cross the tipping point into a future of The International Renewable Energy Agency (IRENA) 1 catastrophic climate change. has explored two broad future paths: Current Plans Ambitious investments in the energy sector – (meaning the course set by current and planned reshaping power generation, transport and other policies); and the path for a clean, climate-resilient energy uses on both the supply and demand sides Energy Transformation.2 Building such a low-carbon, – can provide many of the quick wins needed for climate-safe future can deliver a broad array of socio- a sustainable future. Renewable energy sources, economic benefits, IRENA’s analysis shows. But to coupled with steadily improving energy efficiency, make this happen, the pace and depth of investments offer the most practical and readily available solution in renewables must be accelerated without delay. within the timeframe set by the IPCC. By embarking Renewable energy technologies alone are not upon a comprehensive energy transformation today, enough to achieve massive decarbonisation. The we can start to create a better energy system – one future energy system encompasses three inter- capable of ensuring that average global temperatures related elements: one, renewable energy, would rely at the end of the century are no more than 1.5°C above on steady improvements to energy efficiency and pre-industrial levels. increased electrification of end-use sectors. The cost equation also matters, with affordable renewable power allowing faster, more viable displacement of conventional coal- and oil-burning systems. Renewables and energy efficiency, enhanced through electrification, can achieve over nine-tenths of the cuts needed in energy-related CO2 emissions 1 Paris Agreement, Art. 2(1)(a). 2 Global Energy Transformation: A Roadmap to 2050 (IRENA, 2019) analyses and compares these two investment and development pathways as far as mid-century. 3 Annual energy-related CO2 emissions and reductions, 2010–2050 Gt/yr 35 CURRENT PLANS 33 Gt in 2050 Buildings Electrification 30 of heat and Buildings transport w/RE: Renewable Transport 36% energy and 25 electrification District heat Transport 70% emission deliver 75% Renewable of emission reductions energy: 20 resulting reductions Power 39% District heat from the Energy 15 Transformation Energy Industry e ciency Power and others: 25% 10 ENERGY TRANSFORMATION 9.8 Gt in 2050 5 Industry 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Based on Global Energy Transformation: A Roadmap to 2050 (IRENA, 2019). Note: “Renewables” in the caption denotes deployment of renewable technologies in the power sector (wind, solar photovoltaic, etc.) and in direct end-use applications (solar thermal, geothermal, biomass). “Energy efficiency” denotes efficiency measures in industry, buildings and transport (e.g. improving insulation of buildings or installing more efficient appliances and equipment). “Electrification” denotes electrification of heat and transport applications, such as heat pumps and electric vehicles. Gt = gigaton; RE = renewable energy. Practical options for global energy decarbonisation IRENA has explored global energy development options Assessing the additional potential for scaling up or from two main perspectives: the course set by current optimising low-carbon technologies and approaches, and planned policies; and a cleaner, climate-resilient including renewable energy, energy efficiency and pathway based on more ambitious uptake of renewables electrification, while also considering the role of other and associated technologies. Throughout this report the technologies; first, or Current Plans, provides a comparative baseline Developing a realistic, practical Energy Transformation for a more ambitious Energy Transformation. scenario, referred to in other publications as the REmap Global Energy Transformation: A Roadmap to 2050 Case. This calls for considerably faster deployment (IRENA, 2019) analyses and compares these two of low-carbon technologies, based largely on investment and development pathways as far as mid- renewable energy and energy efficiency, resulting in a century. transformation in energy use to keep the rise in global The ongoing roadmap analysis, updated annually, temperatures this century as low as 1.5°C compared to involves several key steps: pre-industrial levels. The scenario focuses primarily on cutting energy-related carbon-dioxide (CO ) emissions, Identifying the Current Plans for global energy 2 which make up around two-thirds of global greenhouse development as a baseline scenario (or Reference Case) gas emissions; for comparing investment options worldwide as far as 2050. This presents a scenario based on governments’ Analysis of the cost, benefits and investment needs current energy plans and other planned targets and for low-carbon technologies worldwide to achieve the policies, including climate commitments made since envisaged energy transformation. 2015 in Nationally Determined Contributions under the For more on the global roadmap and its underlying Paris Agreement; analysis, see www.irena.org/remap. 4 Moreover, falling renewable power costs provide Renewables and associated infrastructure account for a crucial synergy with electric mobility and heat. nearly half of the difference, with energy efficiency Renewables-based heat and transport solutions alone and electrified transport and heat applications could provide two-thirds of the energy emissions cuts absorbing the rest: needed to meet agreed international climate goals. Investment to build up renewable power generation Modern, increasingly “smart” grid infrastructure capacity needs to be twice as high as currently allows unprecedented flexibility in energy production, foreseen, reaching USD 22.5 trillion by 2050. distribution and use. But investments are needed to Energy efficiency requires investments of USD 1.1 trillion make the most of these gains. per year, more than four times their present level. With solar and wind power on the rise, grid Investment patterns must change operators need new equipment to make the whole power system operate flexibly. Some of the solutions Despite the climate urgency, present investment are market-based, others require investment in patterns show a stark mismatch with the pathway to modern technology solutions. Quick-ramping hold the 1.5°C line. Investments in low-carbon energy thermal generation backups, pumped hydropower, solutions have stalled over the past three years. reinforced transmission and distribution grids, Government plans in place today call for investing digital control equipment, vastly expanded storage at least USD 95 trillion in energy systems over the capacity, and demand-side management through coming three decades. But those plans and related heat pumps, electric boilers and behind-the-meter investments are not always
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