Electrification is Central to Global Energy Transition, says IRENA

John Williams

02 Apr 2021

electric lightbulb lit magically without electricity

photo by Terry Vlisidis on Unsplash

A new World Energy Transitions Outlook from IRENA was released at the Berlin Energy Transitions Dialogue on March 16. It outlines a pathway for the world to achieve the Paris Agreement goals by transforming the global energy landscape. The preview presents options to limit global temperature rise to 1.5°C and bring CO2 emissions closer to net zero by 2050.

With the following central points:

  1. The most important synergy in the global energy transition is the combination of the increasing use of low-cost renewable power technologies and the wider adoption of electricity to power end-use applications in transport and heat.
  2. By 2050, electricity will become by far the most important energy carrier. The direct electrification share in final energy consumption (which includes direct use of electricity but excludes indirect uses such as e-fuels) would reach 30% by 2030 and exceed 50% by 2050, up from just above 21% today.
  3. By 2050, 90% of total electricity needs would be supplied by renewables followed by 6% from natural gas and the remaining from nuclear.
  4. Electrification of end-use sectors, with the increased use of electricity in buildings, industry and transport.

Electrification allows for the use of carbon-free electricity in place of fossil fuels in end-use applications and significantly improves the overall efficiency of the energy service supply. For example, electric vehicles are more efficient than internal combustion engines. Likewise, hydropower generation is more efficient than natural gas generation.

bar chart forecast TFEC split - direct electricity & green hydrogen use in 2050

Electricity is the Central Carrier in Future Energy Systems

Image credit: IRENA

The analysis also suggests the use of green hydrogen and green-hydrogen-based carriers, such as ammonia and methanol, as fuels, would reach almost 2% in 2030 and 7% in 2050 from negligible levels today. In total, direct and indirect electrification would reach 58% of final demand.

Under such a scenario there will be a four fold demand for electricity from current levels. Playing a much bigger role than in previous decades, the electricity sector becomes the central pillar of energy supply and demand worldwide.

Renewable Power

Thanks to improvements in technology and economies of scale renewable power has become the cheapest form of electricity generation and the costs continue to fall. The study indicates a continued swift transition to renewable power generation worldwide in the coming three decades, with shares of variable (or intermittent) renewables – solar PV and wind – growing especially rapidly.

As witnessed in the UK, Ireland, and Germany etc it is feasible to operate power systems with high shares of variable renewables. During 2020 the share of renewables (mainly variable) in total electricity generation was 40% in Europe, a more than 4% increase in the share in comparison to 2019. Meantime over the same period in Europe fossil fuel generation share fell between 6% and 16%.

Demand Side Possibilities

Grid balancing demand side provides particularly exciting smart opportunities as the electrification trend results in new loads such as; electric vehicles, behind-the-meter batteries, and heat pumps- connecting to the system. These opportunities compound as the worldwide digital transformation and expansion of smart grids continues.

And in that case, a huge transfer takes place to the electrification of road transportation. Likewise, synfuels produced from clean hydrogen have an increasing role in shipping, refining of metal, and aviation. Also a shift to electric heat pumps results in better efficiency in the heating and cooling of buildings.

Infrastructure & Investment

Given the growth in electricity demand and the shift to renewable power a massive expansion of clean power generation will be needed and infrastructure planning must be ramped up accordingly. Thus Energy transitions at all levels depend on setting ambitious targets as part of a broad and comprehensive policy framework.

The energy transition can no longer be limited to mitigation efforts or incremental steps. It has to become a transformational effort, a system overhaul, based on the rapid upscaling of available technologies while innovating for the future. Francesco La Camera Director-General, IRENA

To reach such ambitious targets the capital investment required is massive. The $4 trillion per year figure calculated is approximately twice the rate of investment globally that is needed from 2021 through 2030 for the world to reach interim carbon reduction goals.

It is also critical to ensure that infrastructure deployment is in line with the needs of the energy transition. This will require better understanding and share knowledge along with streamlining of planning and approval procedures.