IRENA's post-Covid green energy scenario

Renewable capacity has reached over 2.5 TW globally by the end of 2019, led by China at 759 GW and Europe at 573 GW, with the US at 265GW. In all, globally, renewables expanded by 7.6% in 2019, accounting for 72% of new energy projects.

What happens next will depend to some extent by how the Covid-19 crisis plays out. In a new Renewables Outlook report, IRENA says that ‘the health, humanitarian, social and economic crises set off by the COVID-19 pandemic requires a decisive, large-scale response guided by appropriate social and economic measures. As countries consider their economic stimulus options, they must still confront the challenge of ensuring sustainability and strengthening resilience while improving people’s health and welfare. The need remains for an accelerated path to meet global climate goals through the decarbonisation of our societies’.

It suggests that recovery measures following Covid-19 could include items from the climate change response package: ‘flexible power grids, efficiency solutions, electric vehicle charging, energy storage, interconnected hydro power, green hydrogen and other technology investments consistent with long-term energy and climate sustainability’.

With that in mind, it outlines an ambitious Transforming Energy Scenario, and an additional Deeper Decarbonisation Perspective, which, together, it says offers ‘a sustainable, low-carbon climate safe foundation for stable, long-term economic development. It promises more jobs, higher economic growth, cleaner living conditions and significantly improved welfare. This ambitious outlook would also cut 70% of the world’s energy-related carbon dioxide emissions by 2050. Over 90% of this reduction would be achieved through renewables and energy efficiency measures’.

It adds that while its proposed energy transition ‘would still leave global emissions at about one-third of their current levels, with energy-intensive industries, shipping & aviation still emitting heavily in 2050’, its Deeper Decarbonisation Perspective ‘highlights options to get such sectors to zero. While much remains to be seen, an estimated 60% of the reductions in this final stretch could come from renewables,“green hydrogen” and renewable-based electrification’.

In the Transforming Energy Scenario, electricity is the central energy carrier by 2050, growing from a 20% share of final consumption now to an almost 50% share, most of it being from variable renewable sources.  That means that flexible power management will be vital. IRENA looks to renewables supplying 86% of electricity by 2050 and 66% of all energy, with a massive 8.8 TW of solar PV, 6 TW of wind, and also 1.8TW of hydro, along with some pumped hydro storage and 1.7 TW of electrolyers for green hydrogen production to help with balancing. The rapid expansion of wind and solar is common in most scenarios, but IRENA also says that hydro capacity would need to rise 25% by 2030, and 60% by 2050, while pumped hydro storage capacity would need to double. It also looks to the share of primary energy met with modern bioenergy rising to 23%, from 5% now. There are likely to be environmental objections to that, and also to large hydro, although most environmentalists will be pleased to see that nuclear only plays a small vestigial role in IRENA’s plan.  

IRENA’s medium effort Planned Energy Scenario has emissions increasing slightly by 2030 and then declining to 33 Gt, roughly today’s level, by 2050. That would result in a likely global temperature rise of 2.5°C in the second half of this century. IRENA’s Transforming Energy Scenario sees emissions fall at a compound rate of 3.8% per year to some 10 Gt, or 70% less than today’s level, by 2050, keeping the expected temperature rise well below 2°C. The Deeper Decarbonisation Perspective would reduce emissions to zero by as early as 2050 or at latest by 2060, consistent with holding the line at 1.5°C.                                                      

It will be costly to make these changes, but, IRENA says, it will save money, and in effect pay for itself. The Transforming Energy Scenario would cost $19 trillion more than the Planned Energy Scenario, while bringing benefits worth at least $50 trillion by 2050. The Deeper Decarbonisation Perspective would cost another $16 trillion to achieve net-zero emissions, or another $26 trillion to fully eliminate CO2 emissions, for a total cost of $45 trillion, yet cumulative savings would still be higher, at $62 trillion or more.  IRENA says that the changing investment focus would increase jobs in renewables to 42 million globally by 2050, four times more than today. There would also be environmental and health benefits: for example, it notes that, currently, air pollution causes 7 million premature deaths per year.

Claims for economic and social benefits like that have been made by other 2050 global energy scenarios and some of them look to even higher levels of renewable contribution- up to 100%, as in the LUT University and Stanford scenarios.  Interestingly the Stanford scenario avoids the use of biomass, while LUT uses much more PV solar. Neither of them have nuclear paying a role- see my next post on that. So, there are some differences, and by comparison with these 100% renewables scenario, although it is still ambitious, the IRENA scenario is relatively cautious.

How likely is it to be achieved?  IRENA is quite hopeful. It says renewable power generation ‘is now growing faster than overall power demand’ and the electrification of transport is showing ‘early signs of disruptive acceleration’. But ‘renewables are growing too slowly in major energy-consuming sectors like buildings and industry. Deployment in these areas remains well below the levels needed to create a climate-safe energy system. Slowing progress in energy efficiency and biofuels development must be turned around quickly’.

Overall then it is still a mixed story. IRENA note that ‘the share of modern renewable energy in global final energy consumption has increased only slightly since 2010, staying around a threshold of about 10%’, since energy demand has risen.  So it calls for much more attention to be given to energy saving and to reducing energy intensity, and its target of a 66% share of modern renewable energy in final energy supply by 2050 means six-fold rise from today. That doesn’t sound impossible, with conversion to green hydrogen also offering help with top ups and balancing. But it is quite challenging. Then again, in the post-Covid 19 context, who knows what might be possible?

In its 2020 forward look, the IEA says ‘renewables demand is expected to increase because of low operating costs and preferential access to many power systems. Recent growth in capacity, some new projects coming online in 2020, would also boost output’.  However, it all depends on avoiding a post-C19 rebound in emissions, which ‘may be larger than the decline, unless the wave of investment to restart the economy is dedicated to cleaner and more resilient energy infrastructure’. That’s obviously what IRENA wants, and it may yet come about.