New insight from business advisors McKinsey Energy Insights has suggested that “major shifts” in the energy landscape driven by renewables and electric vehicles (EVs) will see global emissions plateau in 2030, but progress is nowhere near close to the 2 degrees Paris Agreement target. Rising populations and increased wealth in non-OECD nations will drive energy demand, which will offset emission reductions. McKinsey Energy Insights released its Global Energy Perspective (GEP) on Wednesday (17 January) outlining energy-related projections for 28 sectors across 145 countries. The report found that while it will be more economic to build renewable capacity than operate existing oil or gas power plants in the next decade, global decarbonisation efforts will remain more than double the level required to reach the goals of the Paris Agreement. The report forecasts rapid growth in both the renewables and EV markets. By 2030, one fifth of global car sales will be electric, with sales rising from 3% in 2020 to 20% a decade later. Renewables are also expected to grow, accounting for almost all growth in global power generation through to 2050. In the next 10 years, the report notes, solar and wind are expected to grow 5-10 times faster than gas outputs. By 2050, it is expected that 80% of global net capacity of power generation will be renewables. China and India are expected to account for half of this growth, according to the report. Despite the growth in renewables and EVs – even light-duty electric trucks are expected to grow 12-fold in the timeframe – rising populations and increased wealth in non-OECD nations will drive energy demand, which will offset emission reductions to a point where global CO2 levels stall rather than shrink. McKinsey Energy Insight’s solution leader Ole Rolser said: “Despite the significant momentum around EVs and renewable energy sources taking an increasing share of the power market, energy-related emissions remain flat from 2030 to 2050. “As developing countries continue to rely heavily on cheap coal, non-OECD energy demand will replace the efficiency gains made by OECD countries. To realise the 2 degrees pathway scenario, we’d have to see much broader, much more disruptive change than what we’re seeing now.”
The report arrives after analysis from Bloomberg New Energy Finance (BNEF) found that clean energy investments across the globe reached more than $335bn in 2017, a 3% increase from 2016 and the second highest investment figure recorded for clean energy. Since 2010, $2.5trn has been spent on these types of projects. Despite collective global growth, green energy investment in the UK fell by 56% in the UK last year, the biggest decline recorded by any country. Critics have blamed the decrease on the Government’s ‘stop-start’ approach to supporting renewables. Of the $4.8bn spent in the UK on clean energy projects, half was generated through a final investment decision by Orsted – previously DONG Energy- on the Hornsea 2 project off the Yorkshire coast. While the Paris Agreement strives for nations to collectively limit global warming to no more than a 2C rise in temperatures, it also has an aspirational target to limit temperatures by 1.5C. According to a draft report from the International Panel on Climate Change (IPCC), it is ‘extremely unlikely’ that nations will reach this target. The IPCC sent the draft document to researchers for review last week. However, media outlets such as AFP and Reuters gained access to the findings, which are set to be released this year.