EY: Multiple energy transitions accelerating around the world

Changes to the energy system have reached critical momentum and will continue to accelerate over the next decade, but several handbrakes pose a serious risk and could stall progress, according to the new EY report, If every energy transition is different, which course will accelerate yours?

EY modeling of four key levers – technology advancement, commodity supply, consumer engagement, and government policy – and their impact on 52 technologies, highlights the complexity and diversity of the changes ahead. There is not one energy transition, but multiple, unfolding at different paces and in different ways across the world. The transition to renewables is also happening at a much faster pace than anticipated; the EY report predicts that, globally, green energy will dominate electricity generation by 2038, and make up 62% of the power mix by 2050. However, the current speed of change is still not enough to keep global warming to the 1.5-degree Celsius target and further acceleration is required.

Fossil fuel use will peak around the end of the decade; however, hydrocarbons will remain part of the energy mix for longer than anticipated as a result of hard-to-abate sectors. Policies that improve the investor appeal of low-carbon alternatives are therefore required. And with oil and gas around for longer, it will be essential to decarbonize it.

Mihai Drăghici, Partner, Consulting, EY Romania: “EY’s latest Energy report highlights the accelerating global shift to green energy, projecting it to dominate electricity generation by 2038 and make up 62% of the power mix by 2050. While noting potential risks, the report emphasizes the urgent need for global annual investments of $4.1 trillion by 2050 – four times current levels. The call to action extends to regions like Romania, underlining the importance of overcoming challenges in decarbonizing the industrial sector for a successful and inclusive clean energy transition”.

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The EY report forecasts that an estimated US$4.1 trillion of annual investment in low-carbon transition technologies and enabling energy infrastructure will be needed by 2050 – four times current levels.

Multiple energy transitions are reshaping global energy systems, but at varying speeds and in different ways. EY modeling predicts change will accelerate over the next decade and beyond, but only if organizations seize momentum now. Energy and resources companies can take the lead in progressing transformation through action across three areas: incentivizing the switch from legacy assets to renewables; building a minerals and metals supply chain to keep up with demand; and empowering consumers to play a bigger part. Organizations that commit to the right actions now can quicken the journey to a decarbonized future and realize significant commercial opportunities.