The global energy transition is "rolling on", despite policy changes in the US, in part owed to the "unstoppable force" of cheaper renewable energy, Norwegian assurance and risk management provider DNV said today.
The organisation has "consistently forecast" a 50/50 primary energy mix in 2050 between fossil fuel and non-fossil fuel sources, and that forecast remains steady, it said in its Energy Transition Outlook 2025 report today. While some aspects of the global energy transition are "supercharged and progressing rapidly", others are delayed, leading to a prediction of "a marginally slower" transition than last year's forecast, DNV said.
DNV has extended this year's global forecast to 2060, by when it predicts that "fossil fuels will have almost exited the global power mix and internal combustion engine vehicle sales will be a rarity". It sees renewables making up 65pc of all electricity by 2040. And electricity is "growing and greening rapidly and at scale", it added. Power will reach a 43pc share of global energy demand by 2060, from 21pc today, while the "fossil share" of power supply over the same timeframe drops to 4pc, from 59pc, it forecast. Solar and wind will provide more than a third of primary energy supply by 2060, up from 3pc today, DNV said.
The "heightened focus on energy security by policymakers worldwide slightly favours non-fossil over fossil sources in the long run", including new investment in nuclear power, DNV noted. And a fast-rising share of renewables in the global energy mix, improved efficiency from electrification and growing GDP will mean that energy expenditure and cost becomes "an ever-smaller proportion" of both global GDP and household spending, it forecast.
The average annual energy expenditure in around 2050 will be $6.5 trillion, "no larger than today's levels, while GDP will have almost doubled", DNV said. This is "testament to the very low Opex [operating expenditure] of the dominant technologies in the mid-century energy mix and the vast efficiencies enabled by electrification", it added. Spending on fossil fuels will fall as spending on non-fossil power and grids rises, although this will vary by region, the report said.
DNV noted the reversal of support for renewables in US policy, as well as "fossil fuel promotion", which will "markedly slow that nation's transition", it said. It sees US emissions reductions delayed by around five years. But those policies will have "only a marginal impact" on the global transition, it added.
On a global scale, the world is off track to meet the temperature goals sought by the Paris climate agreement — limiting a rise to "well below" 2°C above pre-industrial levels and preferably to 1.5°C. DNV sees global CO2 emissions cut by 43pc in 2050, and by 63pc by 2060, both from current levels. The report forecast a temperature rise of 2.2°C above pre-industrial levels by 2100, but with "an additional risk of higher warming based on new research on climate sensitivity". But it found that reaching the upper limit of the Paris agreement goals "is still possible and urgent actions in all sectors and in all countries and regions are crucial to ensure this".
