A new report warns fossil fuels may lose 10 per cent of market share to solar panels and electric vehicles within just a decade; enough to cripple energy incumbents.
The report, published by Imperial College Of London’s Grantham Institute was authored by Luke Sussams and James Leaton of Carbon Tracker.
It argues that business-as-usual (BAU) scenarios do not take into account additional climate policy mitigation action beyond the present level, which won’t be enough to hit climate targets. They also ignore the impact of acceleration of low carbon technologies on energy markets.
“.. it is our contention that it is time to retire the conventional approach to use BAU as a starting point in scenario analyses,” state the authors.
The new report latest uses the latest available data and market trends for low-carbon technology costs and climate policy in energy modelling.
Highlights from the report:
- Solar panels could be providing 23% of global power generation in 2040 and 29% by 2050, seeing coal completely phased out coal and leaving natural gas with just a 1% market share.
- Electric vehicles could represent 33% of the road transport market by 2035, more than 50% by 2040 and capture more than two thirds of market share by 2050.
- Coal demand could peak in 2020 and then plummet to half 2012 levels by 2050.
- Oil demand may be stagnant from 2020 to 2030, then steadily decrease to 2050.
- Gas demand is kept in check.
Keeping with the “expecting the unexpected” theme, the authors state even their predictions may be conservative in terms of the impact solar panels and EV’s may have.
“Electric vehicles and solar power are game-changers that the fossil fuel industry consistently underestimates. Further innovation could make our scenarios look conservative in five years’ time, in which case the demand misread by companies will have been amplified even more,” said Carbon Tracker’s Luke Sussams.
With regard to “clean coal” technologies such as Carbon Capture and Storage (CCS) saving coal’s bacon, the report says it’s a risky bet.
“A modelling exercise like this brings home the fact that if there are cheaper alternatives available, then CCS will not feature,” say the authors.
The full report can be viewed here:
Expect the unexpected: The disruptive power of low-carbon technology [PDF]
