IEA’s Net Zero Roadmap - Heat Pumps Highlighted as One of the Most Important Clean Energy Technologies

In 2021, the IEA published its landmark report, “Net Zero by 2050: A Roadmap for the Global Energy Sector”. Since then, the energy sector has seen major shifts. On 26 September 2023, IEA published an updated version of the Net Zero Emissions by 2050 (NZE) Scenario; a pathway for the energy sector to achieve net zero CO2 emissions by 2050. In this latest report, they conclude that the path to 1.5 °C has narrowed, but clean energy growth is keeping it open.

At the publication of this updated report, IEA states that the case for transforming the global energy system in line with the 1.5 °C goal has never been stronger. Global carbon dioxide (CO2) emissions from the energy sector reached a new record high of 37 billion tonnes (Gt) in 2022, 1% above their pre-pandemic level, but are set to peak this decade according to the analysis. The speed of the roll-out of key clean energy technologies means that the IEA now projects that demand for coal, oil and natural gas will all peak this decade even without any new climate policies. This is encouraging, but not nearly enough for the 1.5 °C goal.

“Booming technologies like electric vehicles and heat pumps drive electrification across the energy system, providing nearly one-fifth of the emissions reductions to 2030 in the NZE Scenario.”

IEA reports that positive developments over the past two years include solar PV installations and electric car sales tracking in line with the milestones set out for them in their 2021 Net Zero by 2050 report. Moreover, the report shows that heat pump sales increased by 11% globally in 2022, and many markets, notably in the European Union, are already tracking ahead of the roughly 20% annual growth rate needed to 2030 in the NZE Scenario. China remains the world’s largest market for heat pumps.

According to the IEA many of the tools needed to reach zero emissions already exists, but their deployment needs to go faster. Ramping up renewables, improving energy efficiency, cutting methane emissions and increasing electrification with technologies available today deliver more than 80% of the emissions reductions needed by 2030.


The updated NZE Scenario

In the updated NZE scenario, buildings undergo deep transformations. Even though heated floor area increases by around 30%, space heating energy consumption in buildings decreases by almost 70% by 2050. Some key milestones of the sector are:

  • Heat pumps installed in buildings triple by 2030 compared to 2022 and increases by a factor 6.5 to reach around 6 500 GW of installed capacity by 2050. This implies average annual sales growth of almost 20% between 2023 and 2030. In the European Union, the annual increase of heat pump sales has been over 35% since 2021, implying that the growth rates required in the NZE Scenario are feasible.
  • Beyond 2030 all new buildings are zero-carbon-ready, and the retrofit rate in advanced economies reaches 2.5%.
  • As a result, by 2030, around 20% of the existing building stock is zero-carbon-ready. By 2050 this share surpasses 80%.


What changed compared to 2021 NZE Scenario?

In the buildings sector, the main change is a faster switch from natural gas to electricity which primarily reflects advances in heat pump technology and concerns about natural gas supply in the wake of Russia’s invasion of Ukraine, according to the report.

In the industry sector, the 2023 NZE Scenario envisages a smaller role for CCUS than the 2021 version. Project announcements for CCUS for specific industrial applications like cement collectively only account for a small share of total production. Moreover, there has been little progress in CCUS in the iron and steel industries. In contrast, the number of project announcements for hydrogen-based direct reduced iron (DRI) steel production increased significantly since 2021,

Much of the remaining industry sector energy-related emissions are addressed by using alternatives to fossil fuels to provide heat. Chief among these alternatives is electricity, which is used primarily to provide low-temperature heat (in many cases by electrically driven heat pumps), which increases its share of industrial energy consumption from 23% in 2022 to 49% in 2050 (Figure 2.21). Hydrogen and bioenergy are used in the NZE Scenario to provide high-temperature heat.

In the transport sector, the key change compared to the 2021 NZE Scenario version is faster growth in EV sales. It reflects the very strong advances in terms of annual sales, announced manufacturing capacity for batteries, strategy announcements from car and truck makers, and technology improvements.

When it comes to the power sector, the 2023 NZE Scenario includes a faster and larger increase in solar PV than the 2021 version. Nuclear power expansion also proceeds more vigorously, with almost 15%more capacity in 2050 in the updated NZE Scenario than in the 2021 version, according to the report. On the other hand, wind power increases less strongly in the 2023 NZE Scenario, and 2030 capacity additions in 2030 are 20% lower than in the 2021 version due to limited plans globally to expand manufacturing and challenging financial conditions across the value chain.

Another very important change since the 2021 report and a reason to be optimistic is that in 2021 50% of the technologies needed to reach NZE was still under development. Now this share has decreased to 35%. From that it can be concluded that research and innovation activities make a difference, and that there is still a need to continue to prioritize and perform such work.

 Moreover, greater ambition and implementation for clean energy technologies, supported by stronger international cooperation, will be critical to reach climate goals, according to IEA.