Changes to the energy system have reached critical momentum, but several handbrakes pose a serious risk and could stall progress, according to the new EY report.
The report, “If every energy transition is different, which course will accelerate yours?”, models four key levers, which are technology advancement, commodity supply, consumer engagement and government policy.
It analyses the levers’ impact on 52 technologies and highlights the complexity and diversity of the changes ahead.
There is not one energy transition, but multiple, unfolding at different paces and in different ways across the world.
The transition to renewables is also happening at a much faster pace than anticipated.
The EY report predicts that, globally, green energy will dominate electricity generation by 2038, and make up 62% of the power mix by 2050.
The EY report forecasts that an estimated $4.1tn of annual investment in low carbon transition technologies and enabling energy infrastructure will be needed by 2050 – four times current levels.
The report also highlighted the speed of change is still not enough to keep global warming to the 1.5 degree celsius target and further acceleration is required.
Fossil fuel use will peak around the end of the decade; however, hydrocarbons will remain part of the energy mix for longer than anticipated as a result of hard-to-abate sectors.
Policies that improve the investor appeal of low-carbon alternatives are therefore required and with oil and gas around for longer, it will be essential to decarbonise it.
Serge Colle, EY Global Energy & Resources Leader, said: “While change is accelerating, it could easily stall due to the sheer complexity of the challenge ahead.
What we’ve achieved so far in building out renewables and electrifying transport has been relatively simple compared with what comes next.
“Decarbonising a largely hydrocarbon-powered industrial sector is far more difficult, and our ability to tackle it will determine the ultimate success of the world’s transition to clean energy.
“Every market will need to activate a range of accelerators to overcome the inertia of the status quo, keep up the momentum of change, and meet climate targets.”