Rystad Energy: renewables, investments overtaking fossil fuels in 2025

The turning point is expected in 2025, when investments in low-carbon energy solutions, such as solar and wind, will reach $760 billion. While those in petrolium And gas they will come down to 440 billion dollars. We are talking about a huge flow of resources directed both at proven solutions and at geothermal technologies CCUS (carbon capture, utilization and storage)which are already gaining ground today.

Launching a breath of optimism is the “Global Energy Scenarios 2023” report Of Rystad Energy, an independent energy research and business intelligence company based in Oslo, Norway, which tries to dispel two “beliefs” that have animated the global debate on the future of energy for years. “The first is that primary energy will continue to grow at the rate of the global economy, the second is that it will simply be too expensive to replace fossil fuels with renewable energy. These two beliefs are widespread and support the thesis that fossil fuels will continue to dominate for decades, with the result that global warming cannot be limited to 1.5 or even 2.0 degrees,” explains the CEO Jarad Rystad.

Target 1.5 degrees

The analysis of Norwegian society demonstrates, with data in hand, that these beliefs are wrong. And it ensures that, despite the prevailing pessimism, the 1.5 degree target is within reach because new clean technologies are disruptive and will allow renewables to overtake fossil fuels quickly enough to limit CO2 emissions to between 650 and 1,200 gigatonnes (Gt). This range, according to calculations by IPCC, the Intergovernmental Panel on Climate Change, corresponds respectively to scenarios of 1.6 to 1.9 degrees of global warming. Furthermore, the report highlights that new technologies for reducing methane emissions are ready to enter the market, which will bring an advantage of up to 0.2 degrees allowing the goal of 1.5 degrees to be reached.

Fight against waste

According to Rystad, the shift will be possible only after primary energy reaches its peak consumption at around 630 EJ between 2026 and 2027, only to collapse from 2028 onwards. It is in this historical passage that the long-awaited turning point from a green perspective will take place. “When molecules are burned to produce electricity or movement, only 30-50% of the chemical energy is converted into useful energy. The rest represents heat losses to the environment. With renewables (solar or wind), 70-90% of primary energy is available to the end user, including storage and distribution”, underlines the CEO.

The report then confirms that Energy efficiency will play a central role in the transition from fossil fuels to renewables, as also certified by the growing use of heat pumps in industry and buildings, i.e. a more efficient renewable technology compared to the traditional boiler powered by gas or diesel. “Over the past few decades, energy efficiency improvements in buildings, appliances and machines have averaged 1% per year, thanks to better materials and designs. This trend is now accelerating,” the CEO points out.

Thanks to renewable and at new technologies, Rystad predicts that in 2055 a global population of 10 billion people will have access to more energy services per capita than today, even if primary energy production will decrease by around 10%. To reach the goal, the current global electricity production (around 29,000 TWh) will have to be replaced by renewable sources, furthermore the electrification of consumption will have to be able to support strategic end users for the energy transition such as buildings, road transport and industrial machinery.

Logistics

A drop in demand for fossil fuels would also lead to a substantial reduction in their transport which almost always requires significant movements from extraction sites to processing plants and end users. Transportation that is typically carried out by ships, trucks, or pipelines, contributing significantly to air pollution. Rystad estimates a reduction in global tonne kilometers of 45% by mid-century, which will therefore also reduce emissions associated with transport and lead to a major change in global energy infrastructure and consumption patterns.

Technologies

There are 12 key technologies that could reduce global warming by 2.5 to 1.5 degrees. Photovoltaics tops the list with a contribution of 0.25 degrees. Hence the need to increase solar’s annual share from 250 GW of new installations in 2023 to 1,300 GW in the mid-2030s. It seems like an aggressive hypothesis, but Rystad claims that the goal is possible because they are already under construction 1,200 GW of declared production capacity.

After solar energy, three more technologies are needed, each of which will help avoid 0.12 degrees of global warming: batteries, electric vehicles And CCUS. While the supply chainhydrogen and the heat pumps each have the potential to reduce global warming by 0.08 degrees. Followed by biofuels, high-temperature heat storage, circular economy measures and changes to agricultural processes are all solutions that together will help avoid the remaining 0.15 degrees of global warming avoided. All this, he concludes Rystadit must happen by 2055 if we want to limit global warming to 1.5 degrees.