According to consultancy firm McKinsey and Company, global energy demand (electricity, gas and oil) will return to pre-COVID 19 levels within the next one to four years.
The long-term energy outlook predicts that coal demand has peaked, whilst global electricity demand will double by 2050. The increase in electricity will be driven by electrification of vehicles, and technical advancements in green hydrogen resulting in increased power demand for electrolysis.
According to the report’s reference scenario, peak fossil fuel consumption will be reached in 2027, after which low-cost renewables begin to dominate as they become cost effective in most regions.
Perhaps most startling is that even in the most optimistic scenario (“Accelerated Transition”), global CO2 emission reductions fall 85% short of reaching the 1.5° Celsius Pathway, meaning that the world is heading for 3.5° Celsius global warming versus pre-industrial levels, without significant changes in global policy.
The Paris Agreement set out the goal of limiting global warming to 1.5° Celsius above pre-industrial levels. To achieve this goal, countries would be required to create a carbon neutral world by 2050.
Christer Tryggestad, Senior Partner at McKinsey stated: “The importance of policies has increased in the past year. Despite the increased momentum towards decarbonisation, many governments still need to translate ambitious targets into specific actions. Additionally, given the unparalleled size of many economic recovery packages post COVID-19, the focus of the stimulus measures will play a key role in shaping energy systems in the decades to come.”
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