How to transform
the energy system
and reduce
carbon emissions

Electricity from renewables must underpin our future energy system.

Renewable power can immediately – and significantly – reduce global CO2 emissions.

Progress has been made but more needs to be done

The world’s energy system is transforming rapidly, yet current progress lags global climate ambition.

Renewable energy is the dominant source of new power generation capacity today. At the end of 2018, global renewable generation capacity amounted to 2 352 GW, with Asia accounting for 61% of new capacity.

The world’s largest economies are increasingly powered by renewables. Germany, Spain and the United Kingdom enjoy 40%, 38% and 33% of electricity generation with renewables respectively. China reached 38% share of renewable power capacity by the end of 2018.

Progress is also being made in electric mobility. Advances in enabling technologies such as batteries have fueled rapid growth in electric vehicles.

Despite these positive developments, the use of renewables in buildings and industry remains low. As is progress in energy efficiency. As a consequence, CO2 emissions continue to rise and current plans and policies risk putting the world on a pathway to 2.6 C or higher after 2050.

Annual energy-related CO2 emissions need to decline 70% below today’s levels by 2050 to set the world on a pathway toward meeting the climate goals.

Renewable energy and electrification alone can deliver 75% of energy-related CO2 emissions reductions needed.

Renewables and energy efficiency, boosted by substantial electrification, can provide over 90% of the necessary reductions in energy-related carbon emissions.

An electrified future

Increasing the use of electricity sourced from renewables presents the best opportunity to accelerate world’s energy transformation.

By 2050, the share of electricity in final energy consumption would increase from around 20% today to almost 50%.

In addition, bioenergy will play a decisive role in decarbonising sectors that are hard to electrify, such as shipping or aviation. Test flights on airplanes fueled by ‘biojet’ prove the technology is feasible, but costs must fall.

Mobility and heating lead electricity demand growth

The energy system is becoming increasingly electric and digitalised. With electricity becoming the central energy carrier, gross electricity consumption would more than double by 2050.

Drivers of electricity demand growth include increased economic activity and the widespread use of electricity for heat, the emergence of renewable hydrogen, and a global fleet of more than one billion EVs.

The electric mobility revolution

Electric vehicles (EV) are on the rise. Global EV sales grew by 58%, surpassing 2 million units, in 2018.

A Chinese metropolis of 20 million people, Shenzen, converted its entire 16,000-strong public bus fleet to electricity.

By 2050, there would be over one billion electric cars on the road, and many more electric buses, two- and three-wheelers, and trucks powered by electricity if policy makers take the necessary steps today.

Renewable sourced electricity is key for decarbonisation

More than 60% of electricity generation would come from solar and wind. EV charging, electrified heat and hydrogen production can be adjusted to match the variable renewable energy in the power sector and to provide flexiblity for the operation of the system.

The share of electricity produced by renewable technologies would increase from almost 25% today to 86% in 2050.

Societies and economies will change

The global energy transformation is more than a simple transformation of the energy sector – it’s a transformation of societies and economies.

A shift in investment from fossil fuels to renewables, electrification technologies and efficiency will pay off in socio-economic opportunities.

Significantly improved air quality will reduce human health costs and minimize the environmental damage caused by climate change.

Effect of climate damages on GDP improvement in 2050

The global energy transformation could boost global economy by 2.5% in 2050. When avoided climate damages are factored in, this figure would more than double.

Both scenarios incur significant GDP climate change-related losses.

Accelerating climate-safe solutions costs less than inaction

Renewables are increasingly the least-cost power option available.

Decarbonising the global energy system requires a shift in investments away from fossil fuels and towards renewable energy, electrification technologies and efficiency.

An additional USD 15 trillion of investment in renewable energy, electrification technologies and efficiency is required. Overall, total investment in the energy system would need to reach USD 110 trillion by 2050.

However, the investment is 40% lower than previously envisaged, thanks to falling costs and emerging electrification solutions.

Action needed now

Swift and decisive national policy action
National policy should focus on zero-carbon long-term strategies. Energy and climate policies need to be better aligned.
Action on international level
Sustainable Development Agenda and the review of national climate pledges under the Paris Agreement are milestones for raising the level of ambition.
Systemic innovation
This includes fostering decentralized, flexible energy systems through digitalisation as well as the coupling of end-use sectors.
Increased investments
Investments needed not only in energy efficiency and renewable energy supply, but also in key enabling infrastructure.
Electrification with renewables
Accelerating the electrification of the transport and heating sectors is crucial for the next stage of energy transformation.
Reuse, recycle, reduce
Circular economy practices can drive reductions in energy demand and emissions.