World oil supply will peak between 2020 and 2028 before falling significantly, while energy efficiency will grow faster than the global economy and renewables will account for half of the world’s energy supply by 2050, Dutch quality assurance and risk management firm DNV GL forecast last week in its first-ever Energy Transition Outlook.
“The world will manage the shift to a renewable future without increasing overall annual energy expenditure, meaning that the future energy system will require a smaller share of GDP,” the company said in a release. However, that pace of transition would put the Earth on a path to 2.5°C average global warming, well above the targets in the Paris agreement.
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“Even with energy demand flattening and emissions halving, our model still points to a significant overshoot of the 2.0°C carbon budget,” said Group President and CEO Remi Eriksen. “This should be a wake-up call to governments and decision-makers within the energy industry. The industry has taken bold steps before, but now needs to take even bigger strides.”
DNV GL foresees renewables and fossils meeting roughly equal shares of global energy demand at mid-century. “Wind power and solar photovoltaics (PV) will drive the continued expansion of renewable energy, whilst gas is on course to surpass oil in 2034 as the single biggest energy source,” the release states. “Oil is losing ground as a source of heat and power, and is set to flatten from 2020 through to 2028 and fall significantly from that point as the penetration of electric vehicles gains momentum. Coal use has already peaked.”
The company foresees solar photovoltaics and wind cutting costs by 18% and 16%, respectively, renewables in general achieving cost reductions much faster than fossil producers, and electric vehicles hitting cost parity with internal combustion in 2022, rising to half of all light vehicle sales by 2033.
The report limited its review of renewable energy options to solar PV, onshore and offshore wind, and hydropower, UN Climate Action notes.
