1. Emissions

The energy transition in the power sector is well under way and global power sector emissions have most likely peaked in 2022. In order to stay on track for net zero, emissions in all sectors need to peak now and start declining fast.

In the Net Zero Scenario, transport sector emissions peak in 2024 and fall quickly due in particular to the electrification of road transport. Industrial sector emissions are already leveling off and then begin their steep decline in 2030. Building-sector emissions, already far lower than industrial or transport emissions, decline relatively slowly from a peak this year. By comparison, industry and buildings emissions both increase through 2050 in the Economic Transition Scenario (ETS), albeit slowly.

4. Primary Energy

In our Net Zero Scenario, oil, gas and coal consumption all peak nearly immediately, if they have not done so already. Under this scenario global coal demand peaks in 2022, gas demand peaked in 2021, and oil demand peaked in 2019, before the Covid-19 pandemic. For oil and gas, this is a marked departure from the trajectories in our Economic Transition Scenario.

5. End Use Sectors

Final energy use in the Net Zero Scenario has very different profiles for each sector. This is due to several factors, but first among them is electrification of transport, industrial processes and heat.

6. Electrification

Reaching net-zero emissions by mid-century requires a significant increase in global electricity generation. The Energy Transition Scenario requires 46,000 terawatt-hours of power generation in 2050, nearly double today’s amount. The Net Zero Scenario, however, requires more than 80,000 terawatt-hours of generation, more than triple today’s amount.

Power demand from hydrogen, which is insignificant in the Economic Transition Scenario, is close to 23,000TWh per year in the Net Zero Scenario by mid-century as we assume that 88% of hydrogen production is achieved via grid-connected electrolyzers. That makes hydrogen the single biggest source of power demand globally by 2050, equal to total global demand in 2020.

Sources of global power demand

Economic Transition Scenario

Source: BloombergNEF

Net Zero Scenario

Source: BloombergNEF

7. A Low-Carbon Power System

In addition to increasing total power generation significantly, the Net Zero Scenario requires a significant change in the production mix. This is not an evolution of the Economic Transition Scenario – it is effectively a completely different power system.

Reaching net zero will result in almost zero fossil fuel-fired power generation operating without carbon capture and storage; it will also require more nuclear power generation, and even more wind and solar power to be deployed. In the Net Zero Scenario, wind and solar power are more than three-quarters of total power generation.

Electricity generation by technology, by scenario

8. CCS and Hydrogen

Carbon capture and storage and hydrogen emerge as major technologies for deep decarbonization, with applications across industry, power, buildings and transport. We estimate that about 7 gigatons of carbon dioxide will need to be captured annually in 2050 – the equivalent of today’s power sector emissions from Europe, China and India combined. Hydrogen production will rise to 500 million metric tons annually in 2050, a fivefold increase from today’s levels.

9. The Need for Deep Decarbonization

The net zero transition is still in its infancy. Each of these key technologies is still at a fraction of the scale that is needed. Today, more than 40% of the nuclear power capacity needed in 2050 already exists, but less than 10% of the necessary total wind and solar has been installed, and effectively none of the heat pumps, hydrogen electrolyzers, or CCS capacity that are needed.

That said, the ramp rates needed for the four technologies that do exist today – electric vehicles, wind, solar and nuclear power – are very different. Each of these technologies reach peak annual deployments considerably higher than today’s levels. Electric vehicle sales will need to increase fivefold, from under 11 million to 55 million per year, in order to satisfy net-zero targets and meet sector carbon budgets. Solar installations will need to more than triple and wind installations will need to increase sixfold.

10. Investments

Getting to net zero is a multi-trillion investment opportunity, but to stay on track will require a shift away from fossil-fuel investment. To stay on track in the Net Zero Scenario, this means that for every dollar invested in fossil energy supply, nearly five are invested into low-carbon supply through 2050.