The global power consumption is expected to triple by 2050 as most business sectors are taking to electrification as the cheapest and easiest pathway to achieve emission reductions, McKinsey & Company said in a recent report.
The Global energy mix is projected to shift towards low-carbon solutions, with a particularly strong role for power, hydrogen and synthetic fuels, according to the global consultant report titled ‘Global Energy Perspective 2022’.
Transportation is projected to see the fastest transition to electricity due to Electric Vehicles (EV) reaching cost parity with Internal Combustion Engine (ICE) cars already in the mid-2020s.
In the long term, green hydrogen production is projected to be the biggest driver of additional power demand (42 percent of the growth between 2035–2050), with hydrogen playing a key role for hard-to-abate sectors such as iron and steel.
The report said renewables are expected to grow three-fold by 2050, accounting for 50 percent of power generation globally by 2030 and 80-90 percent by 2050 driven by declining costs of solar and onshore wind power generation.
“Rapid technological developments and supply chain optimisation have collectively halved the cost of solar, while wind costs have also fallen by almost one-third. As a result, 61 percent of new renewable capacity installation is already priced lower than fossil fuel alternatives. Battery costs have also fallen by nearly half in the past four years,” the report said.
While thermal generation’s share in base-load generation worldwide is expected to decline by nearly 30 percent from 2019 to 2050, it will continue to play an important role as back-up flexibility provider to support grid stability. The report noted that gas is expected to provide substantial share of base-load generation up to 2040 in regions with favourable fuel costs.
Meanwhile, hydrogen demand is projected to grow fivefold by 2050, driven primarily by road transport, maritime, and aviation. Hydrogen and hydrogen-derived synfuels are expected to account for 10 percent of global final energy consumption by 2050.
(Reporting by Anoop Menon; editing by Seban Scaria)