The speed and scale of the energy transition must increase in order to reach the 1.5°C ambition, according to latest analysis from Equinor.
In 2024, almost half of the world’s population go to the polls and many elections will demonstrate some of the key trends shaping world politics: geopolitical competition, economic nationalism and political polarisation.
This in turn will impact global energy markets and the progress of the energy transition.
Energy Perspectives 2024, an independent energy scenario analysis prepared by Equinor analysts, contains two scenarios for the future of global energy markets: Walls and Bridges.
Their difference highlights the contrast between the current pace of the energy transition (Walls) and the swift, radical changes needed to meet the 1.5°C ambition in the Paris Agreement (Bridges).
“Despite some region’s adamant push on energy transition efforts, both through stimulus and regulation, the global development over the past few years has made the challenges of delivering on the 1.5°C ambition larger,” said Eirik Waerness (pictured), Chief economist at Equinor.
Increased levels of geopolitical conflict and outright wars have made the energy transition more fragmented, and positive developments are in many cases offset by negative ones.
“Despite short-term setbacks, the longer-term signals clearly point in the direction of significant energy transition and decarbonisation, but the walls have become thicker and the bridges narrower, and that adds to the uncertainty of the speed and scale of decarbonisation towards 2050 and beyond,” Waerness added.
After a few years of a tight energy supply situation, in Europe in particular, things are looking better.
Energy supply security and affordability have taken the front seat, and even contributed to acceleration of transition in some sectors.
Nevertheless, both industrialised and emerging economies have seen the need to prioritise differently coming out of an energy crisis while managing a higher level of geopolitical conflict.
“Energy Perspectives provides important insight into the outcome space we have to consider when balancing our strategic priorities in the energy transition,” said Anders Opedal, President and CEO of Equinor.
This year’s report contains an updated version of the Walls scenario, while maintaining the benchmark Bridges scenario as outlined in the 2023 outlook.
Energy Perspectives does not try to predict the future but shows possible future paths for the global energy system based on the choices the world makes, providing a platform for debate and informed decision-making.