Electricity-sector emissions and coal and gas use at power plants have already peaked because of the pandemic and will not return to their pre-COVID-19 levels, according to a report released yesterday.
Yet the world is still spiraling toward 3.3 degrees Celsius of temperature rise, the BloombergNEF analysis said.
Coal’s decline is the most significant factor that will cause power-sector emissions to drop 8.6% this year, rise slightly until 2027, and then fall at an annual rate of about 0.7% through 2050, according to the outlook. While coal-fired power has already hit its peak in the United States and on average globally, it won’t max out until 2027 in China and 2030 in India.
Last year, BNEF said that global coal use at power plants would peak in 2026. That threshold actually occurred in 2018, the report said, with COVID-19 blocking a rebound. The fallout from the pandemic has reduced analysts’ base assumptions for both coal demand and emissions, said Seb Henbest, lead author of the report and chief economist at BNEF.
“Renewables are still going flat-out as they would’ve been, because they run with close to zero marginal costs, but the coal generators have been reduced or run out,” Henbest said. “So you get this big hit on coal activity, and therefore emissions, in the power sector.”
Because of this, the world will stave off about 2.5 years’ worth of greenhouse gas emissions, BNEF said. More pronounced warming of about 5 or 6 degrees Celsius will also be avoided, Henbest said.
But to keep average temperature increases below the internationally agreed-upon 2-degree threshold, emissions would need to fall by 6% annually from now until 2050, according to BNEF. That could only be achieved with significant policy intervention, it said.
“Without aggressive subsidies and public money, you can get to 3.3 degrees – still what would be considered dangerous climate change – but it’s within shooting distance of something looking a lot better,” Henbest said.
One energy source from which emissions will increase over the next 30 years is natural gas, BNEF said. Natural gas use in the power sector peaked in 2019, but gas consumption in buildings and in heavy industry is projected to go up, resulting in an overall increase in use of gas of about 0.5% annually until 2050, according to the outlook.
Oil demand will also increase initially, peaking in 2035 and then dropping steadily to return to 2018 levels by 2050. Increased use of electric vehicles will bring down oil use, as new EVs will be cheaper to buy on average than new internal-combustion vehicles by the mid-2020s, BNEF said.
“You get this reduction in oil consumption in road transport, but at the same time, growth in oil consumption in aviation and throughout other parts of the economy,” Henbest said.
Already the cheapest new electricity sources in countries that make up 73% of the world’s gross domestic product, wind and solar will provide 56% of electricity worldwide in 2050, compared to 9% today. New, unsubsidized renewable energy projects will be more economical than coal in China by 2023-24, and more economical than gas in the United States by 2024-25, according to the outlook.
The outlook’s baseline economic scenario only accounted for technologies that are commercially viable today, assuming no significant increases in carbon capture and storage, green hydrogen, small modular nuclear reactors, and other technologies still in their infancy.
But large-scale investments and deployments of those and other next-generation energy tools could further reduce emissions and improve warming scenarios, according to Henbest. In particular, they would cut emissions in “hard-to-abate” sectors like aviation, shipping and buildings.
“We will probably need a second-phase option, some sort of zero-carbon fuel or molecule,” Henbest said. “We’ve got a decade to scale it up, because right now, it doesn’t exist.”
Electrification will also bring down emissions, whether that takes the form of widespread EV adoption or replacing gas heating in buildings with electric heat pumps, according to Henbest.
“Any electrification is a source of decarbonization,” he said. “There are challenges that come with that, but that is a good first step.”
Reprinted from Energywire with the permission of E&E News. Copyright 2020. E&E News provides essential news for energy and environment professionals at www.eenews.net.