Pandemic Saves 2.5 Years of Emissions, Accelerates Coal Timeline in India: BNEF

The drop in energy demand due to the pandemic will remove some 2.5 years worth of energy sector emissions between now and 2050, according to BNEF

The stark drop in energy demand due to the coronavirus pandemic will remove some 2.5 years’ worth of energy sector emissions between now and 2050, according to research company BloombergNEF’s (BNEF) latest New Energy Outlook 2020.

The latest projection of the evolution of the global energy system over the next 30 years, using its proprietary Economic Transition Scenario, shows that emissions from fuel combustion peaked in 2019. Down approximately 8 percent in 2020 as a result of the COVID-19 pandemic, energy emissions rise again with economic recovery, but never again reach 2019 levels. From 2027 on, they fall at a rate of 0.7 percent per year to 2050.

This prospect is based on a huge build-out of super-competitive wind and solar power, the uptake of electric vehicles and improved energy efficiency across industries. Together, wind and solar account for 56 percent of global electricity generation by mid-century and together with batteries take 80 percent of the USD 15.1 trillion invested in new power capacity over the next 30 years, according to the analysis. An additional USD 14 trillion is invested in the grid to 2050.

Coal-fired power peaks in China in 2027 and India in 2030, collapsing to 12 percent of global electricity generation in 2050. In contrast, gas is the only fossil fuel to keep growing throughout the outlook, up 0.5 percent year-on-year to 2050, growing 33 percent in buildings and 23 percent in an industry where there are few economic low-carbon substitutes.

Yet, despite the progress of the energy transition, and the decrease in energy demand brought by COVID-19, BNEF still sees energy sector emissions putting the world on course for a 3.3 degrees Celsius temperature increase by 2100.

Jon Moore, CEO of BNEF said “the next ten years will be crucial for the energy transition. There are three key things that we will need to see: accelerated deployment of wind and PV; faster consumer uptake in electric vehicles, small-scale renewables, and low-carbon heating technology, such as heat pumps; and scaled-up development and deployment of zero-carbon fuels.”

The NEO 2020 climate scenario pathway describes a low-carbon future energy economy supplying 100,000TWh of clean electricity by 2050. This is five times all the electricity produced in the world today and would require a power system that is 6-8 times larger in terms of total capacity. Two-thirds of this energy would go to direct electricity provision in transport, buildings and industry, the remaining third to manufacturing hydrogen.

According to BNEF clean electricity and green hydrogen, pathway requires between USD 78 trillion and USD 130 trillion of new investment between now and 2050 to cover the growth in electricity generation and the power grid, as well as manufacturing, storing and transporting hydrogen.