Global Energy Scenarios 2024

Global Energy Scenario 2024 - The transition is accelerating 

The global energy system is set for transformational change in the coming decades. Solar, wind, and batteries are installed at an unprecedented pace, and electric vehicles have reached double digit shares of total car sales. Meanwhile, fossil fuels are still growing and global CO2 emissions reached 39 gigatonnes last year.  

In the Global Energy Scenarios 2024 report, we investigate what the future could look like in three scenarios for different degrees of global warming, with a special focus on what it takes to reach a scenario consistent with 1.6 degrees Celsius global warming. We see this as a monumental task; however, our constructive conclusion is that such a scenario is possible.  

Scenarios for net-zero emissions 

The scenarios in this report are based on the carbon budgets estimated by the IPCC. Each scenario represents the allowable fossil CO2 emissions limiting global warming to a specific temperature threshold compared to pre-industrial times. In our Energy Scenario Model, we model 11 unique scenarios based on these carbon budgets, however, in this report we choose to focus on three of them: 1.6, 1.9-, and 2.2-degrees scenario. Our model includes data for 217 countries and special territories, 60 sub-sectors of the economy and more than 70 different energy carriers. 

Three tasks for reaching net-zero 

Reaching the goals of the Paris Agreement requires deep decarbonization across all sectors of the economy and a broad range of technologies. While the road ahead could seem complex, there are essentially three tasks for reaching net-zero: clean up and grow the power sector, electrify almost everything and tackle the residual emissions. The importance of each task varies across regions, depending on the domestic circumstances. 

Task one: cleaning up and grow the power sector  

The first task towards deep decarbonization is to address power-sector emissions – a foundational effort where many countries have already made significant progress. According to our analysis, tackling the first task may contribute 40% of the total emissions reductions needed from today to 2050 to achieve the 1.6 degrees scenario.  

Task one is already well underway. Today, low-carbon sources supply 40% of global electricity, and emissions from power generation have dropped significantly – from 1.7 kg of CO2 per kilowatt-hour (kWh) in the 1960s to 0.57 kg CO2/kWh today.  

Achieving the 1.6-degree scenario will necessitate global emissions from the power sector to peak by next year and shrink by nearly 90% by the middle of the century. Solar, wind, and batteries will be the primary enablers of this transition, forming the backbone of future power systems. 

Task two: electrify everything possible 

Electrification of end-use sectors can contribute 43% of the CO2 emission reduction needed to reach the 1.6-degree scenario. Electrification will in many instances also improve energy efficiency, as many electric solutions are more energy-efficient than conventional technologies. 

Currently, electricity accounts for about 21% of global final energy demand, compared to 18% two decades ago. About 70% of all countries have electrification rates lower than the global weighted average. The diverse use of electricity across regions is reflecting the varying stages of electrification, energy infrastructure development and economic maturity globally. 

In order to achieve the 1.6 degrees scenario, electric vehicles may contribute to 35% of the emissions reductions needed by 2050. The largest emission reductions are coming from a wide set of technologies used for industrial electrification. This is an area with significant innovation, which will have an important impact on the pace of electrification.  

Task three: addressing residual emissions  

The final task is to address emissions that cannot be technically or economically addressed by electrification. For this task, carbon capture, utilization and storage (CCUS), direct air carbon capture (DACC), hydrogen derivatives, and bioenergy will play a critical role in reducing global emissions. We estimate that 17% of all CO2 emissions reductions needed to reach the 1.6 degrees scenario must come from this task.  

The clean hydrogen project pipeline indicates strong growth potential beyond 2025, with the High scenario projecting nearly 70 million tonnes of capacity by 2030. Yet, in the short term, there are significant uncertainties as the sector is shifting gears toward project execution. A considerable portion of the pipeline is classified as medium-high or high risk, which raises concerns about whether these projects will be realized on time to meet demand in ambitious climate scenarios.  

The current CCUS project pipeline shows a significant amount of capacity growth potential, yet a large portion of this pipeline is classified as high-risk or medium-high risk. This risk profile introduces uncertainty in the ability to meet future emission-capture targets. However, the low-risk projects alone are sufficient to meet the 2030 capture targets for the 1.9-degree and 2.2-degree global warming scenarios.  

Upsides 

While the three core tasks holds the potential to unlock the 1.6-degree scenario, getting even lower with these tools is extremely challenging. However, leveraging upsides presents opportunities to achieve even further emission reductions.  

One key upside is accelerated methane reductions, given methane’s high short-term potency as a greenhouse gas. Technologies like precision fermentation in agriculture are becoming highly competitive and can achieve methane emissions up to 97% lower than traditional animal agriculture while using only 10% of the land and 4% of the water, offer a dramatic pathway to cut emissions.  

Fast-tracking renewable energy systems instead of building out new fossil fuel capacity, particularly in developing economies, presents another promising upside. Countries with abundant renewable resources could leapfrog into clean energy systems, reducing dependency on fossil fuel imports, and avoiding growth in emissions despite a rising energy demand. 
 
More effective use of land is another upside which enables faster rollout of renewable. For instance, the co-location of solar on farmland through agrivoltaics. This alone could meet the highest energy demand under a 1.6-degree scenario by using just 3.8% of agricultural land. Combined, these strategies offer a promising route to meet more ambitious climate targets, especially with supportive policies to unlock their potential.