Towards a greener global energy mix

This fall, DNV, the independent expert in assurance and risk management, presented the sixth version of its annual Energy Transition Outlook, which is a forecast on the energy mix and supply and demand of energy in 2050 at a global level. This year’s version shows that we are well underway to a greener energy mix, but also that we need to pick up the pace if we are to keep to the goals of the Paris Agreement alive. Hydrogen could play a key role in decarbonizing the hard- to-abate sectors.

At a launch in the city of Copenhagen, DNV revealed the contents of the report. The Energy Transition Outlook is DNV’s independent modelling of the world’s energy system. It forecasts the energy mix, supply and demand globally and in 10 world regions until 2050, and therefore draws a realistic picture of which way we are heading with the energy transition.

One of the main short-term conclusions of this year’s report is that the long-term transition to a greener energy mix is not threatened by the current high energy prices and the greater focus on energy security due to the war in Ukraine. Another key point is that emissions remain at a constant high level, and that they must fall with eight per cent every year to be able to reach net zero on a global level in 2050.

On the long term, the conclusions from the Energy Transition Outlook are amongst others that renewables will be slightly dominant over fossil sources in the energy mix in 2050, and that hydrogen is expected to make up five per cent of the energy mix in 2050, only a third of the level needed for net zero.

Remi Eriksen – Group President og CEO, DNV

Renewables push for majority in 2050

The good news is, based on the main conclusions of the report, that the future energy mix has never looked greener. With 51 per cent modelled green energy in 2050 at a global level, we are on the right track to decarbonize our energy mix.

“We find for the first time in our forecasting, that non-fossil fuels edge slightly ahead of fossil fuels in the 2050 energy mix. On the face of it, this is good news, and it implies a very large shift from the 80-20 percent split fossil versus renewables we have today, and that is happening over just the course of one generation,” said Remi Eriksen, Group President and CEO for DNV, during the launch of the report in Copenhagen.

However, as Eriksen pointed out: “It is far from zero. Our analysis shows that while Europe is taking a step back the coming years by opening up for more coal use, the European Union will take two steps forward under REPowerEU to accelerate the build out of renewables, boost energy efficiency and secure more energy independence. Elsewhere in the world, and particularly for low-income countries, high energy and food prices are reversing the coal to gas switch, putting a dampening on decarbonization investments.”

Hydrogen enters the mix

As a way forward, the report points out three vital tendencies that can boost the overall share of green energy: lower costs of renewables, electrification, and rising carbon prices. Electricity is the mainstay of the transition, and it is growing and getting greener around the world, as the Energy Transition Outlook points out.

Then where electrification is not a suitable option, in the so-called hard-to-abate sectors such as heavy-duty transport (aviation, shipping, road) and industry, hydrogen enters the mix. In the Energy Transition Outlook it is forecast, that hydrogen will be up to five percent of the energy mix if the current trend is maintained. However, if we are to keep on track towards net zero, we need to increase that number to at least 15 percent, according to DNV’s modelling.

The Energy Transition Outlook further states that the demand for hydrogen as an energy carrier will climb steeply, and that the bulk of hydrogen and hydrogen products end use will be in transport (51%) and industry (33%), and the rest will go to buildings, electricity generation and other uses.

The future must contain hydrogen at scale

To reach that 15 percent share of the energy mix that is needed to be able to keep net zero on a global level alive, we need to find efficient ways to scale up hydrogen production and end use.

Remi Eriksen said: “Bold and brave policy choices are critical in the face of climate change.” This is a statement that Tejs Laustsen Jensen, CEO at Hydrogen Denmark, only can applaud. Tejs Laustsen Jensen:

“It is good to see that DNV’s Energy Transition Outlook has recognized the vast potential in hydrogen and hydrogen-based solutions and the need to scale up hydrogen production. We are looking into a future, where hydrogen and hydrogen-based products such as ammonia and methanol need to expand tremendously. Fortunately, many countries are prioritizing the ramp up of renewable energy and thereby pave the way for large-scale green hydrogen production. The European Union and the United States are making significant policy decisions that are making it interesting for investors to invest in renewable hydrogen. We therefore hope that the share of green hydrogen in the energy mix will increase in the coming years.”

Both Hydrogen Denmark’s CEO and DNV’s Group President and CEO agree that the way forward is through cooperation across sectors:

“The energy transition is likely to see unprecedented regional and cross-industry cooperation – for example within hydrogen ecosystems or the creation of green shipping corridors. DNV will strive to catalyze such cooperation wherever we can,” said Remi Eriksen.

“For Europe it is important that policies are quickly converted into regulations. In DNV’s hydrogen forecast we mention barriers and when those barriers are overcome, the likelihood of developing a hydrogen industry and value chains to succeed for hydrogens part in the future energy mix increase. Hereto the scale up and move into urban areas needs to be safe and this requires industry insights and development of standards and practices,” said Mick Cramer Jakobsen, DNV Head of Customer Relations & Sales in Region Northern Europe.

You can find DNV’s Energy Transition Outlook and its underlying reports here.