Gas power plants are also a mainstay of today’s electricity security because of their ability to flexibly ramp up and down in response to changes in variable renewable output or peaks in demand. This buffer for households relying on gas for heating is not easily replicated by the electricity system. Current underground gas storage facilities have a capacity of 420 bcm per year – equivalent to more than half of the world’s residential space heating demand. Market design and infrastructure in increasingly integrated systemsĪ more complex energy system, with electrification at its core, raises important questions about the future of natural gas infrastructure, which in many parts of the world plays an important role in meeting seasonal demand for heating as well as short-term peaks in power generation. The need for such flexibility in the NZE is considerable: utility-scale battery storage increases from less than 20 GW in 2020 to over 3 000 GW by 2050, and there are millions of behind-the-meter enablers of flexibility, in the form of smart meters, EVs and charging infrastructure. Such conversion processes are essential to provide the system flexibility needed to match the supply of variable renewables and demand for electricity at least cost. Energy travels through batteries and electrolysers, undergoes conversions from electricity to heat or fuels, and back again. In the NZE by 2050, around 40% of primary energy is converted at least twice before reaching end-users. The energy system of the future consists of a much more complex web of interactions between solid, liquid and gaseous fuels, and electricity.
#Single point energy quantumwise series#
Today’s energy sector is in essence a series of interlinked but largely independent delivery channels for fuels, heat and electricity to consumers. Managing imbalances between supply and demand, especially over longer timeframes, without resorting to emissions-intensive fuels requires a fundamental transformation of how energy systems operate. Electricity storage, demand-side response and dispatchable low emissions sources of power are essential to meet flexibility requirements in clean energy transitions. A large share of seasonal energy demand is also transferred onto the power system through the increasing use of electric heating and cooling equipment. Wind and solar PV generation varies with the weather as well as with the time of day and year, and this can cause sudden changes to generation patterns on a daily or weekly basis. Across all scenarios the share of variable renewables in electricity generation rises to reach 40-70% by 2050 (and even more in some regions), far above the global average of just under 10% today. Many of the new energy security challenges in a decarbonising world arise in the power sector as societies come to depend more on electricity for their energy needs. If companies and investors misread demand trends amid uncertainty about the future, there is a risk of either market tightening or of over investment leading to underutilised and stranded assets. In the STEPS, on the other hand, the annual amount required for investment is around USD 680 billion, well above current levels. The declines in oil and gas demand in the NZE are sufficiently steep that no new field developments are required: continued spending to maintain production from existing assets, and reduce the associated emissions, amounts to an annual average of USD 210 billion between 20 in the NZE. These variations come with dramatically different implications for investment. The comparable range for natural gas is between 5 100 bcm in the STEPS and 1 750 bcm in the NZE. By contrast, if the world single-mindedly pursues a 1.5 ☌ stabilisation objective, then oil demand falls to 24 mb/d in the same year. If there are no further changes in today’s policy settings, as in the STEPS, oil demand in 2050 remains above 100 mb/d. Our projections highlight the huge uncertainty over the trajectory for future demand. Lower demand for fossil fuels, and in particular for oil and natural gas, ultimately reduces some traditional energy security hazards, but it cannot be taken for granted that the journey will be a smooth one. Although the share of fossil fuels in the mix has remained at around 80% over several decades, it declines to around 50% by 2050 in the APS and collapses to just over 20% in the NZE. Energy transitions bring about a major shift in the primary energy mix away from carbon-intensive fuels towards low-carbon energy sources.