The decade ahead will see the energy transition enter a new phase. A permanent decline in fossil fuel use in the power sector at a global level is now inevitable, leading to falling sector emissions. Clean electricity additions – led by solar and wind – are already forecast to outpace demand growth in the coming decade, securing moderate reductions in fossil fuel use and hence emissions, even as demand accelerates to meet the growing needs of electrification and other booming technologies.
For the goal of achieving international climate change targets, this is critical, with multiple analyses finding that the power sector should be the first to decarbonise – by 2035 in OECD countries, by 2045 in the rest of the world. The sector is currently the highest emitting of all, producing more than a third of energy-related carbon dioxide emissions. Clean electricity is also key to decarbonising transport, heating and much of industry, by replacing the fossil fuel burning that currently takes place in car and bus engines, boilers, furnaces and other applications. An accelerating transition to a clean electrified economy powered by wind, solar and other forms of clean energy will also unlock benefits in areas such as economic growth, jobs, air quality and energy sovereignty.
The pace of emissions declines will be shaped by how quickly the build-out of clean power continues. There is a global consensus on the scale of ambition needed. At the UN’s COP28 climate change conference in December, world leaders reached a historic agreement to triple global renewables capacity by 2030. The target would see the world reach 60% renewable electricity by 2030, almost halving power sector emissions and putting the world on a pathway aligned with the 1.5C climate goal. Leaders also agreed at COP28 to double annual energy efficiency improvements by 2030, which will be crucial to delivering the full potential of electrification and avoiding runaway growth in electricity demand.
Countries are already demonstrating the key enablers that galvanise rapid growth in solar and wind, including high-level policy ambition, incentive mechanisms and flexibility solutions. The report highlights three countries – China, Brazil and the Netherlands – which show that despite very different starting points, the combination of these approaches is delivering rapid transformations of their electricity systems and preparing the way for a clean, electrified economy.
