Our parent company, Statkraft, have released their annual energy report for the ninth year in a row, this time renaming their ‘Low Emissions Scenario’ report the ‘Green Transition Scenarios’ report. 

As an industry leader in renewable energy with over 125 years of history, Statkraft’s report has researched and outlined three possible scenarios for the global journey to net zero. These three scenarios include: 

• The Green Transition Scenario, in which global collaboration helps accelerate and reduce the cost of the net zero energy transition. 
• The Clean Tech Rivalry Scenario, which sees global superpowers in competition to reach net zero, therefore raising costs. 
• The Delayed Transition Scenario, where geopolitical tensions and concerns on energy security disrupt the progression of the energy transition. 

The report demonstrates the fact that collective action and communication across nations is necessary in order to navigate and achieve a future powered by renewables. Despite the varying pace of the energy transition across the three scenarios, Statkraft has found that renewables replace fossil fuels in all scenarios, with wind and solar power especially thriving: both wind and solar power output increases by 13 times by 2050 in the Green scenario and grows by 6 times in the Delayed scenario. 

Here are some of the report’s key findings: 

• There have been substantial reductions in emissions from the energy supply and industry sectors from 2005-2023. 
• Global investments in renewable electricity are now ten times higher than fossil fuels. 
• Electrification is the most significant decarbonisation solution for the industry sector, while green hydrogen also plays an important role in supporting hard-to-decarbonise sectors. 
• Solar power is emerging as a cost-effective and quick-to-build renewable energy option, making it a great pacesetter for renewable energy. 
• The cost of onshore wind power is decreasing, despite a period where costs temporarily increased, while the cost of offshore wind power is more expensive than was anticipated in early 2023. This is due to the impact of inflation, supply shortages, high commodity prices and interest rates. 
• Geopolitical tensions will have a big impact on the energy transition. Factors like the US-China relationship and the recent US election are likely to affect the rate of progress towards net zero, as they may impact the level of competitiveness, hostility and unpredictability between the countries. This will impact how challenging and costly the energy transition becomes. 
• Nevertheless, Statkraft notes that climate policies in major economies have generally remained strong, despite political tensions, and have even strengthened in some cases. 
• Electricity demand is projected to double by 2050 in the Green scenario, largely influenced by the dramatic increase of electricity use in transport and heating, as they decarbonise, and the production green hydrogen. Consumption of electricity also increases by 50% even in the Delayed scenario.  
• By 2050, renewable energy sources supply the majority of global energy demand in all scenarios: 84% in the Green scenario, 79% in the Clean Tech Rivalry scenario, and 65% in the Delayed scenario. 
• Oil consumption is projected to continue in some capacity in aviation and long-haul transport, but by 2050 in the Green scenario, consumption is projected to decrease by 50%. 
• The share of electricity in transport rises from 2% today to 70% in the Green scenario, as the transport sector continues to electrify and decarbonise. 
• Electrification falls behind in the Clean Tech Rivalry scenario, compared to the Green scenario, due to geopolitical tensions that cause issues in relocating supply chains, leading to more expensive low-carbon technologies. 

The report lists seven decarbonisation solutions that can separate a Green scenario future from a Delayed scenario future. 

These include: 

1. Accelerating the construction and deployment of renewable energy. 
2. Increasing the electrification of end-user sectors, such as in buildings, industry and transport. 
3. Encouraging energy efficiency through changes in behaviour. 
4. Evolving the green and blue hydrogen market in Europe. 
5. Developing the carbon capture and storage industry in Europe. 
6. Phasing out the use of fossil fuels and simultaneously maintaining energy security. 
7. Balancing the future energy system through sustainable flexibility methods. 

“The message is clear: the path to a sustainable energy future is neither straightforward nor easy, but it is achievable with decisive action and collective effort,” says Birgitte Ringstad Vartdal, CEO of Statkraft. 

To find out more about Statkraft’s Green Transition Scenarios 2024 report, you can visit their website and register to view the full report, here.