According to the outlook, electricity becomes the principal source of energy for decarbonized heating with high-efficiency heat pumps becoming the primary technology choice, with already today strong support from many governments in policies already stated.
Different scenarios
Three different scenarios are compared in the report, each scenario is based on a different vision of how policymakers might respond to today’s crisis. The Stated Policies Scenario (STEPS) explores how the energy system evolves if we retain current policy settings. In the Announced Pledges Scenario (APS), governments’ climatic targets are achieved on time and in full. Only in the Net Zero Emissions by 2050 (NZE) Scenario, IEA works back from specific goals – the main one, in this case, being to cap global warming to 1.5 °C – and show how they can be achieved.
The STEPS in this Outlook is the first World Energy Outlook (WEO) scenario based on prevailing policy settings that sees a definitive peak in global demand for fossil fuels. Coal demand peaks in the next few years, natural gas demand reaches a plateau by the end of the decade, and oil demand reaches a high point in the mid-2030s before falling slightly.
Outlook for emissions
Energy-related CO2 emissions rebounded to 36.6 Gt in 2021, the largest-ever annual rise in emissions. In the STEPS, they reach a plateau of around 37 Gt before falling slowly to 32 Gt in 2050, a trajectory that would lead to a 2.5 °C rise in global average temperatures by 2100. This is around 1 °C lower than implied by the baseline trajectory prior to the Paris Agreement, indicating the progress that has been made since then. But much more needs to be done. In the APS, emissions peak in the mid‑2020s and fall to 12 Gt in 2050, resulting in a projected global median temperature rise in 2100 of 1.7 °C. In the Net Zero Emissions by 2050 (NZE) Scenario, CO2 emissions fall to 23 Gt in 2030 and zero in 2050, a trajectory consistent with limiting the temperature increase to less than 1.5 °C in 2100.
Outlook and role of heat pumps
The global energy crisis is having far-reaching implications for households, businesses, and entire economies, prompting short-term responses from governments as well as a deeper debate about the ways to reduce the risk of future disruptions and promote energy security. According to the report, there remain huge uncertainties over how this energy crisis will evolve and for how long fossil fuel prices will remain elevated, and the risks of further energy disruption and geopolitical fragmentation are high.
One of the effects of Russia’s actions is that the era of rapid growth in natural gas demand draws to a close. In the STEPS, the scenario that sees the highest gas consumption, global demand rises by less than 5% between 2021 and 2030 and then remains flat through 2050. The outlook for gas is dampened by higher near‐term prices; more rapid deployment of heat pumps and other efficiency measures; higher renewables deployment and faster uptake of other flexibility options in the power sector; and, in some cases, reliance on coal for slightly longer.
One point common to each scenario is the rising share of electricity in global final energy consumption. From 20% today, this increases in each scenario, reaching more than 50% by mid-century in the NZE Scenario. This is associated with a huge overall increase in global electricity demand.
Even though electricity accounts for about 20% of the world’s total final consumption of energy, its share of energy services is higher due to its efficiency. It is central to many aspects of daily life and becomes more so as electricity spreads to new end‐uses, such as electric vehicles (EVs) and heat pumps.
Energy efficiency is the first pillar of the transition in the buildings sector in this Outlook by IEA; in the NZE Scenario, it brings substantial benefits for affordability and consumer welfare. There is enormous scope for efficiency gains from improved envelopes for new and existing buildings, heat pumps, energy‐efficient appliances, and energy and materials‐efficient building design. Most of these technologies are available on the market, and some are already economically competitive, or on course to become competitive as technology costs decline. Electricity becomes the principal source of energy for decarbonized heating: homes using electricity for heating rise from 20% today to 30% in 2030 and to more than 50% in 2050, with high efficiency heat pumps becoming the primary technology choice.
Worldwide, the installation of heat pumps increases from 1 million per month today to around 8 million per month by 2030, and 14 million per month by 2050 in the NZE. Overall, the share of electricity in the buildings sector energy mix reaches almost 50% by 2030 and 67% by 2050, making it the most electrified of all endues sectors.
Despite the turbulence in today’s electricity markets, the momentum for further electrification is strong across the world, according to the report, with the deployment of electric cars and the installation of heat pumps set to increase, and with electricity being used to meet new end uses. Electricity prices have risen dramatically, but so have prices for oil, natural gas, and coal.
Demand‐side response helps to align consumption with available supply, thus reducing the need for other sources of flexibility. With the projected increase in the use of electricity by air conditioners, heat pumps, EVs, electrolyzes and other potentially flexible sources of demand, there is potential for significant load shifting in all three scenarios.
The IEA will release a report on heat pumps and their role in energy security and transitions in November 2022.
The outlook for employments
Energy transitions are already starting to transform the landscape for energy employment, with more than 50% of the energy workforce now employed in clean energy (IEA, 2022). The development of new energy‐related projects, including the manufacture of their components, is the largest driver of energy employment. The energy sector, includes constructing new power generation facilities and transmission lines, carrying out efficiency retrofits, installing heat pumps, completing new oil and gas wells, and designing and constructing infrastructure. In the NZE Scenario, total energy investment more than doubles to 2030, driving up the demand for skilled workers across the energy sector. In all scenarios, the number of new jobs created outweighs the number of those lost in fossil fuel industries, although the jobs that are created may not be in the same places as those that are lost, and the required skills in many cases will be different.
The role if investments
The world has not been investing enough in energy in recent years, a fact that left the energy system much more vulnerable to the sort of shocks seen in 2022. A smooth and secure energy transition will require a major uptick in clean energy investment flows. Getting on track for the NZE Scenario will require a tripling in spending on clean energy and infrastructure to 2030, alongside a shift towards much higher investment in emerging market and developing economies.
Planned increases in global clean energy manufacturing capacity provide a leading indicator of the potential for rapid increases in deployment. In the case of heat pumps, current and planned manufacturing capacity is below the deployment levels projected in the APS. But announced global manufacturing capacity for electrolyzes and solar PV modules in 2030 is sufficient not only to reach APS deployment levels but to go beyond them.
An updated roadmap to Net Zero Emissions by 2050
In 2021, the IEA published its report Net Zero by 2050: A Roadmap for the Global Energy Sector. However, in the short time since then much has changed. The global economy has rebounded from the COVID‐19 pandemic, and the first global energy crisis has seen world energy prices touching record levels in many markets, bringing energy security concerns to the fore. Therefore, this report includes an update of this roadmap.
Download the report from the iea web site here >
Source: iea.org