The previous chapter showed that global energy-related emissions are in line with a two-degrees pathway in a Low Emissions Scenario. However, to limit emissions in line with a 1.5-degrees pathway, the transition must occur at a much faster pace. According to the IPCC, this would mean halving the remaining carbon budget compared to a two-degree pathway.
The conclusion is that following a 1.5-degree pathway for the energy sector is challenging, but possible.
The solutions exist and implementing comprehensive and rapid measures is likely to be significantly cheaper for the world than the alternative – doing less. The solutions outlined for Europe will also be relevant for countries in other regions, but the speed and share of emission reductions from the different solutions will vary. All energy sectors must cut emissions quickly.
At a global level, the emissions gap between the Low Emissions Scenario and the average of IPCC 1.5-degree pathways is approximately 16 GtCO2 in 2050. In addition, all the 1.5-degree scenarios assume lower global energy-related CO2 emissions towards 2050 than the Low Emissions Scenario. This shows the need for further emissions cuts in order to reach the 1.5 degrees target. There are large variations in emissions in the various 1.5-degree scenarios, depending on the combinations, scope and implementation timeframe of the solutions chosen. For example, different levels of CO2 removal and carbon capture and storage are used. In all the global scenarios, the use of fossil fuels declines significantly and the carbon intensity in the power sector approaches zero. All scenarios assume aggressive emissions cuts after 2050, and from other greenhouse gases such as methane.
All sectors must bear their share of the extra emission cuts. Statkraft’s energy system model assumes that the least cost solutions are chosen. Cost optimisation is applied across regions and sectors. According to the model analysis, a cost-effective transition of the energy systems in Europe results in the power sector contributing 46%, industry 23%, buildings 18%, and transport 13% of the 600Mt extra emission cuts in 2050. However, alternative burden-sharing across sectors are also possible.
The EU Commission’s 2050 climate strategy includes two different 1.5-degree trajectories where the first primarily explores a variety of technological solutions and the second relies on significant lifestyle changes. Electrification is essential to achieve a 1.5-degree pathway. As mentioned in the previous chapter, there are roughly five main solutions to reduce energy-related greenhouse gas emissions: energy efficiency and circular economy, electrification and a decarbonised power sector, emission-free hydrogen, carbon capture and storage or utilisation, as well as bioenergy. Statkraft’s analyses show that electrification along with improvements in energy efficiency are the most important means of moving from the Low Emissions Scenario to a 1.5-degree pathway. Electrification accounts for over 80% of the additional emission cuts required in the transport sector, while in the buildings and industry sectors, electrification accounts for around half.
In October 2018, the European Commission presented its strategy for a carbon-neutral Europe. With this non-binding strategy, the EU may be among the first to reach the goal of net-zero emissions in 2050. The strategy is now under negotiation with the member states and the European Parliament. The strategy contains a number of different scenarios for emission cuts towards 2050.
Several recent studies estimate that to be consistent with a two-degree pathway, EU countries must cut their greenhouse gas emissions by 80% in 2050 relative to 1990 levels. To achieve a global 1.5-degree pathway, external studies show that the EU must reduce its emissions by 91-96% compared with 1990 levels by 2050. To follow a 1.5-degree pathway, experts estimate that the world must reach net zero CO2 emissions well in advance of 2100. The different analyses contain significant uncertainties, including the effect of critical tipping points and the effect on global warming from other greenhouse gases. Several analyses therefore recommend that the EU should reach net zero greenhouse gas emissions by 2050 and that rapid emission cuts will increase the probability of limiting global warming and will be less costly than delaying.
The massive drop in solar PV and wind power costs makes emission-free energy widely available throughout the world. Utilising this energy to cut emissions in transport, industry and buildings is generally a highly cost-effective climate measure. In Statkraft’s analyses, electricity demand in the EU increases by 11% in a 1.5-degree pathway compared to the Low Emissions Scenario over the period. New solar PV and wind power generation fully covers the increase in electricity consumption in 2050. New solar PV and wind power will also replace more than 80% of coal and gas power phased out of the power mix. This means that 85% of power demand will be covered by variable renewable power generation in Europe in 2050 and the total renewable share will be 96%.
Hydrogen plays a key role in solving the climate challenge In some areas, it is difficult to electrify energy demand directly. If a 1.5-degree pathway is to be reached, emissions-free hydrogen becomes a cost-effective solution in several applications. Its properties – zero emissions, flexible storage potential and applicability across sectors – make the different forms of hydrogen a cost-effective low-emissions solution. The proportion of hydrogen in Europe in our analysis therefore rises by almost 150% in a 1.5-degree scenario compared to the Low Emissions Scenario.
Cost reductions for renewable hydrogen may come quickly, driven by lower technology costs for renewable electricity and expected cost reductions for electrolysers as production is scaled up. In our analyses, hydrogen from renewable electricity using abundant solar and wind resources soon becomes competitive with fossil solutions such as diesel in heavy transport; this is also the case compared to blue hydrogen based on natural gas and carbon capture and storage. Hydrogen takes up a lot of space per energy unit and must, therefore, be converted to liquid form or ammonia if larger volumes are to be stored or transported over longer distances. For each conversion step, some energy is lost, driving costs up. In general, therefore, our analyses indicate that local hydrogen production from renewable electricity close to the point-of-use is usually the cheapest solution, although this will not always be possible or available.