Navigating the Physical Realities of the Energy Transition

Overview

• The energy transition is at an early stage, with only 10% of low-emissions technologies deployed by 2050 achieved.
• Transition involves overcoming 25 interlinked physical challenges, requiring new technologies and infrastructure.
• Addressing half of energy-related CO2 emissions depends on tackling the most demanding challenges.
• Key features of the hardest challenges include lack of established technologies, dependence on addressing other challenges, and large-scale deployment needs.
• CEOs and policymakers can navigate the transition by understanding these challenges.

Current Energy System

• Today's energy system, optimized over centuries, is efficient but flawed, with 85% of global CO2 emissions and 66% energy waste.
• Transitioning to low-emissions energy is challenging due to entrenched systems and needs for expanded access.
• Historical energy transitions took decades or centuries, unlike rapid digital transformations.

Seven Domains of Transformation

1. Power

   • Increase low-emissions power generation 10-fold by 2050.
   • Manage variability with backup generation, storage, and grid interconnections.
   • Challenges: securing land, grid expansion, nuclear energy deployment, and flexible power demand.

2. Mobility

   • Expand EVs from 30 million to 1 billion by 2050.
   • Level 1 challenges: EV emissions savings and range.
   • Level 3 challenges: trucking, aviation, and shipping decarbonization.

3. Industry

   • Decarbonize steel, cement, plastics, and ammonia; all Level 3 challenges.
   • Requires alternative materials, fuels, and carbon capture.

4. Buildings

   • Largest emissions from heating.
   • Level 1: Efficiency of heat pumps.
   • Level 2: Manage increased peak power demand.

5. Raw Materials

   • Demand for critical minerals like lithium and cobalt.
   • Current supply is 10-35% of 2050 needs; Level 2 challenge.

6. Hydrogen and Other Energy Carriers

   • Hydrogen as alternative fuel faces Level 3 challenges like energy losses and infrastructure expansion.

7. Carbon and Energy Reduction

   • Expanding energy efficiency is Level 2.
   • Carbon capture from new sources and direct air capture are Level 3 challenges.

Tackling the Transition

• Innovation and system-level changes are needed, such as better energy density in batteries.
• CEOs and policymakers should focus on smooth transitions.
• Investment in energy efficiency and hybrid technologies is crucial.

Conclusion

• The transition is complex, requiring bold aspirations and commitment.
• Understanding physical realities aids in navigating the path to a successful energy transition.