Electrified heat and hydrogen: Renewable energy deployment ‘must grow fivefold by 2030’
To ensure that the global energy mix transitions in line with net-zero, wind and solar will need to be deployed at least five times faster than current rates by 2030 and hydrogen investment must scale dramatically.
That is according to new analysis out today (28 April) from the Energy Transitions Commission. In two parallel reports, the Commission outlines how electrification in sectors such as heat and transport will push up electricity demand – and how renewables and hydrogen must be supported to ensure that this transition is aligned with climate science and delivers the maximum economic benefit.
On the former, the reports reveal that electricity is likely to represent up to 70% of final energy demand, up from 20% in 2019. While electrification is touted as a potential way to decarbonise hard-to-abate sectors in the coming decades, as technologies like electric trucks and aircraft mature, the Catapult states that the share of renewables in the global electricity mix will need to drastically increase to ensure true climate action.
Renewables accounted for about 10% of global electricity generation last year, the reports state. The proportion will need to reach at least 40% by 2030 and 75% by 2050 if net-zero is to be achieved. As such, new capacity additions will need to be five to seven times higher in 2030 than they were last year, and ten times higher by 2050 against the same baseline.
The Catapult acknowledges that renewable electricity must be scaled up in tandem with growth in other sectors, including nuclear, energy storage and power network infrastructure.
To deliver this growth, the reports set out a string of recommendations for policy. All nations should develop medium-term, numerical targets for electricity decarbonisation and electrification, the Catapult argues. Delivery should be supported by incentives for developers and new finance vehicles to attract investment. At the same time, network infrastructure providers will need greater support to deal with increased demand.
“We now have the technologies to completely decarbonise electricity generation at low cost: and electrification is the key to zero-carbon production in most of the economy,” Energy Transitions Commission chair Lord Adair Turner said.
“By mid-century even rich developed countries will need two to three times as much electricity as today, and developing economies five to ten times as much. Governments, businesses and investors need to recognise the scale of the new industrial revolution required and the huge opportunities it creates.”
Spotlight on hydrogen
The hydrogen portion of the Catapult’s analysis is intrinsically linked to the renewables paper – it states that some 85% of investment in the green hydrogen sector through to 2050 will relate to renewable electricity provision.
At present, more than 90% of the hydrogen produced globally each year is produced using fossil-fuel-fired methods. This means it is currently more cost-competitive than green hydrogen, produced by electrolysis of water using renewable electricity, and blue hydrogen, produced from natural gas in plants with carbon capture capabilities.
However, the Catapult believes that green hydrogen will soon become the most cost-competitive if proper support is offered by governments and the private sector. Policy recommendations include introducing clear and strong carbon pricing, to make high-carbon hydrogen production less cost-competitive; legally binding targets for developing green hydrogen capacity; support for industrial clusters with hydrogen and updating rules on hydrogen blends in terms of safety and emissions.
All in all, the report states that clean hydrogen production will need to be five to seven times higher in 2030 than it is at present if the world is to get on track for a net-zero energy sector. With these levels of deployment, clean hydrogen costs would likely fall below $2 per kilogram.
The Commission’s recommendations are being supported by a coalition of more than 45 businesses, including finance providers, energy producers and energy consumers such as steel firms and carmakers. From the finance space, supporters include Bank of America, and HSBC. Other supporters include Iberdrola, Orsted, Shell, BP, Tata Group and Volvo Group. Shell and BP are notably spearheading the UK-based Hydrogen Taskforce.