Energy Transition Outlook 2021

ENERGY TRANSITION OUTLOOK 2021

Appendix: Summary of assumptions applied within IEA, DNV and Shell analysis

IEA – Net Zero Scenario

DNV – Current Policy Forecast

Shell 1.5 Sky Scenario

CCUS and carbon removal

Around half of fossil fuel use in 2050 is in plants equipped with CCUS (around 3.5 Gt are captured from fossil fuels in 2050.) Brings opportunity to oil and gas sector with present technologies and expertise.

Uptake of CCS is too slow due to cost, today primarily only found in oil recovery. Existing and announced policies aren’t enough. In 2040s the carbon price will approach the cost of CCS, only then will projects begin accumulating. Renewable energy represents 15% of global energy supply. 45% in 2050 (+5% nuclear) representing a 50:50 split between fossil and non-fossil fuels. Electricity global demand is to double towards 2050. Cost reduction, government support and carbon pricing will improve renewable allocation of power generation.

As well as substantial CCUS, the scenario also requires the plantation of 700 million hectares of trees. By 2040, carbon prices become more viable to which extensive policy development is vital. Renewables required to scale up by as much as 10x in the next 30 years. Renewable fuels largely uncertain. The adoption of EVs as well as the successfulness of hydrogen presents uncertainty.

Renewable Growth Alternative fuel supply to come online. Low- emission liquid fuels account 20% of final energy 2050 (1% 2020.)

Electricity consumption to double 2020 figures in 2050. Largest global investment is electricity generation. Almost half of emission reductions in 2050 depend on technologies that are currently under development Annual investment in clean energy infrastructure $880 billion 2030 ($290 billion over past 5 years.)

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