The share of electricity in the final demand mix will more than double from today’s level
In 2017, only 19% of final energy demand was delivered in the form of electricity. By 2050 that will more than double to 40% and 49 PWh. While a doubling looks impressive, there is also a profound shift in how that power will be generated. We forecast that by mid-century, 63% of the world’s electricity will be supplied by solar PV and wind; and with those sources comes very large efficiency gains.
To put this in perspective, consider that we have already seen a near-doubling in the share of electricity in final energy demand over the last 30 years. Yet, over that period, the average efficiency of mainly fossil-fuelled power plants increased only marginally from 28% to 34%. Consequently, the energy loss in conversion in power plants as waste heat, and in transmission and distribution lines, increased significantly. The rise of renewables over the next three decades will, in contrast, see a substantial drop in heat losses.
A high share of renewables requires a considerably more flexible system. Storage capacity, currently at 650 GWh globally will expand to 31 TWh, with the lion’s share of that provided by batteries. On top of this, another 16 TWh will be available from the world’s EV fleet by 2050, and demand-response, behind-the-meter storage, power grid expansions and power-to-gas will create additional flexibility. However, flexibility provided by the conventional generation technologies will continue to be significant. A high penetration of variable renewables also brings another factor into play: weaker prices for wind and, especially, solar PV, when these sources compete between and amongst themselves. In this year’s Outlook we demonstrate this through our modelling of power market dynamics at hourly intervals.
The main sources of demand for all this electricity will be in buildings, manufacturing, and transport, with the latter experiencing the most transformative lift in electricity demand from 0.3 PWh in 2017 to 9.1 PWh in 2050. Grid investments and transmission infrastructure to connect variable renewable sources will be substantial, but affordable as we explain further on in this summary.