Close to 20 percent of global power needs will be met by solar or wind energy by 2035, marking a shift from the age of oil and gas to the age of renewables, according to a new report from researchers at the consultancy Wood Mackenzie.
The growing focus on sustainability in many parts of the world, the report says, “is almost akin to a gravitational force, pulling things in one direction and driving the ‘great fuel switch,’ leaving little possibility for a reversal.”
Energy transitions, similar to the ongoing shift to renewables, are nothing new, Wood Mackenzie researchers write in the report released Wednesday, entitled “Thinking Global Energy Transitions: The What, If, How and When.”
The current hydrocarbon-based economy has itself evolved out of many previous energy transitions, from the age of biomass to the age of coal, and, ultimately, to that of oil and gas. Each of these was different, but all took at least 30 to 50 years to unfold, the report says.
Technological advancements in the renewable energy industry, coupled with the growth of energy storage and the growth of electric vehicles, are driving the “large-scale commodity switch” away from fossil fuels, Prajit Ghosh, Wood Mackenzie’s head of global strategy, power and renewables, said Wednesday in a statement.
“The result is that the energy transition seems less the plot of a sci-fi movie and more of a feasible, albeit ambitious, plan,” Ghosh said.
The transition to solar and wind energy will replace the equivalent of about 100 billion cubic feet per day of natural gas demand in the global power sector, the report says. For comparison, demand for natural gas in the United States — the world’s largest consumer of natural gas — averaged about 74 billion cubic per day for all purposes, or about 20 percent of global natural gas consumption, in 2017.
In the transportation sector, as much as 20 percent of all miles traveled globally by cars, trucks, and buses will use electric motors rather than gasoline or diesel. By 2040, oil demand displaced by a switch to electric vehicles will double to almost 6 million barrels per day. For comparison, total global oil consumption in 2017 — for all purposes — averaged about 98 million barrels per day.
Improving battery storage technology is helping make electric vehicles a viable solution for local air pollution concerns as well. Deeper decarbonization efforts by governments could require 40 to 60 percent of new car sales to be electric by 2035, according to the report.
“If autonomous electric vehicles and ride-sharing really take off, achieving these higher levels becomes possible in a relatively short time,” the report says.
Earlier this year, Bloomberg New Energy Finance reported that prices for solar, wind, and battery storage are dropping so rapidly that renewables are increasingly squeezing out all forms of fossil fuel power, including natural gas.
The sluggishness of countries to craft legislation or regulations, however, could slow the arrival of the transition. President Donald Trump’s plan to withdraw from the Paris climate agreement, the Trump administration’s rollback of vehicle emissions standards, and resistance in Canada to carbon pricing schemes, for example, could all stand in the way of the transition to renewables.
Many of these potential constraints, though, “are likely to be resolved,” especially by public-private partnerships that lead to even greater advances in clean energy technologies, Wood Mackenzie predicts.