The BNEF 2022 New Energy Outlook explores how the world’s energy system, and the energy systems of nine critical countries that make up 63% of global emissions, may evolve between now and 2050 under two scenarios: the so-called ‘Economic Transition Scenario’, and the Paris-aligned ‘Net Zero Scenario’.
 

In the Economic Transition Scenario (ETS), which assumes no new policy action to accelerate the clean energy transition, the rapid growth of renewable energy and electrification of transport eliminate about half of the world’s energy-related emissions in 2050, against a baseline where no such transition takes place.
 

These technologies win on their own merit, without need for additional subsidy, thanks to the dramatic cost reductions in wind, solar and battery technology over the last decade – which are expected to resume following a hiatus during the current inflationary crunch, the report says.
 

Wind and solar provide about two-thirds of the world’s power generation by 2050 in the ETS, and these two technologies, combined with battery storage, account for an overwhelming 85% of the 23 TW of new power capacity additions installed over the next three decades. Power sector emissions fall by 57%, and emissions in the overall transportation sector fall by 22% to 2050, driven by the road segment’s transition to electric vehicles. Global coal, oil and gas use all peak over the next decade, with coal reaching a high point and starting to decline immediately, while oil does the same in 2028 and gas in the early 2030s.
 

Despite these rapid gains for clean energy, the ETS falls far short of achieving net zero by mid-century, according to BNEF. By 2050, emissions have fallen 29%, but unabated coal, oil and gas still emit 24.6 Gt of CO₂ per year. The result is a trajectory consistent with 2.6°C of global warming, breaching the goals of the Paris Agreement.
 

Net Zero Scenario
Under the Net Zero Scenario (NZS), BNEF modelling indicates that the world can stay on track for 1.77°C, and global net zero by 2050, with rapid deployments of clean power generation, electrification and, to a lesser extent, carbon capture and storage (CCS) and hydrogen.
 

Switching power generation from fossil fuels to clean power is the single biggest contributor to global emissions reduction, accounting for half of all emissions abated over 2022–2050 in this scenario setting. This includes displacing unabated fossil fuel with wind, solar, other renewables and nuclear – largely mature technologies that exist at scale today. By 2050, the global power system is dominated by wind (48% of generation) and solar (26%), with the rest provided by other renewables (7%), nuclear (9%), hydrogen and coal or gas with carbon capture.
 

Electrification of transport and industrial processes, buildings and heat – using steadily lower-carbon electricity – is the next biggest contributor to emissions reductions, abating about a quarter of total emissions over the period. Here again, the technologies already exist, although in the case of heating for buildings and industry, electrification is not yet proceeding at pace, the report notes.
 

The remainder of emissions reductions under the NZS come from demand-side efficiency gains and recycling, hydrogen, bioenergy and CCS, together accounting for roughly the last quarter of emissions reductions. Although these appear to play a smaller role, the growth required for these technologies is still remarkable. CCS capacity grows from about 40mn tonnes in 2021 to 1.7 Gt by 2030, and over 7 Gt by 2050. Hydrogen use more than quintuples, from over 90mn tonnes of largely fossil-based hydrogen today, to about 500mn tonnes of emissions-free hydrogen by 2050.
 

David Hostert, Global Head of Economics and Modelling at BNEF and lead author of the report, concludes: ‘Our Net Zero Scenario shows that a credible pathway to meet the goals of the Paris Agreement still exists, but getting there requires immediate action. Clean power deployment needs to quadruple by 2030, in addition to a major investment in carbon capture and storage, advanced nuclear technologies, and hydrogen. To get on track this decade, there needs to be $3 invested in low-carbon supply for every $1 in fossil-fuel supply. There are also critical enabling factors to consider: electrification and economic growth will quadruple the planet’s power demand by 2050. We need to see a massive acceleration in the build-out of power grids, manufacturing capacity for low-carbon technologies, and supply of critical metals and materials. These could become painful bottlenecks tomorrow, if left unaddressed today.’