What Will Energy Look Like In 2050?
The world’s energy systems today face major challenges. About 13% of the global population still lacks access to modern electricity, and over 2.6 billion people lack access to clean cooking solutions. 1 At the same time, the energy sector accounts for nearly 75% of global greenhouse gas emissions. 2 Pollution from fossil fuels also contributes to over 8 million premature deaths annually. 3
As the global population increases and economies grow, energy demand is projected to rise over 50% by 2050 compared to 2020 levels. 4 Meeting this demand in a sustainable way while expanding energy access and addressing climate change requires transforming existing energy systems. That’s why it’s important to look towards the future of energy and how it can evolve to be cleaner, more efficient, equitable and resilient.
Renewable Energy Growth
Renewable energy sources like solar, wind, and geothermal are expected to see tremendous growth by 2050. According to the U.S. Energy Information Administration, renewable energy generation is projected to supply 44% of U.S. electricity by 2050, up from 21% in 2021 (https://www.eia.gov/todayinenergy/detail.php?id=51698). The International Renewable Energy Agency also predicts the global share of renewable energy in the power sector increasing from 25% in 2017 to 85% by 2050, driven by growth in solar and wind (https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Apr/IRENA_Report_GET_2018.pdf).
Prices for renewable energy have dropped dramatically in the last decade, leading to higher adoption rates. The levelized cost of electricity from utility-scale solar photovoltaics declined 88% between 2009 and 2020, while onshore wind dropped 70% over the same period. This has made renewables more cost-competitive with conventional energy sources.
Looking ahead, growth is expected to be strong for all major renewable energy sources. The U.S. is projected to have 404 gigawatts of wind capacity and 530 gigawatts of utility-scale solar capacity by 2050. Geothermal capacity could grow more than 26-fold. Continued technological improvements and declining costs will drive increased deployment of renewables through 2050 and beyond.
Electrification
Electrification of transportation and heating will be critical to enabling a low carbon energy system by 2050. According to the International Energy Agency, electrification is one of the most important strategies for reducing CO2 emissions in their Net Zero Emissions by 2050 Scenario. There will need to be major growth in electric vehicles (EVs), with EVs comprising 60% of all vehicle sales globally by 2030. Electrification of heating will also be key through the adoption of electric heat pumps, which can provide heating and cooling more efficiently than traditional HVAC systems powered by fossil fuels.
For electrification efforts to enable decarbonization, there must be substantial increases in clean electricity generation. According to The New York Times, total electricity demand in the United States could double by 2050 even as overall energy use declines, if efforts to electrify vehicles and heating advance. Renewable energy generation would need to expand greatly to meet this demand while reducing emissions. With sufficient clean electricity capacity, electricity could power 23% of global transportation by 2050, up from just 1% today, enabling significant reductions in carbon emissions from the sector.
Energy Efficiency
Energy efficiency will play a critical role in meeting net zero emissions targets by 2050. According to the International Energy Agency (IEA), improvements in energy efficiency across sectors like transportation, buildings, and industry could achieve over 40% of the required emissions reductions by 2050 (IEA). Policy efforts like stricter efficiency standards for vehicles and appliances, building codes, and industrial regulations will drive some of these gains. For example, the average fuel economy of light-duty vehicles is projected to improve by over 30% by 2050 due to policies like the Corporate Average Fuel Economy (CAFE) standards in the United States.
Advances in technologies and digitalization will also boost efficiency. The IEA projects the average conversion efficiency of hydrogen electrolyzers will increase from 65% today to 75% by 2050. Smart building technologies like connected thermostats, sensors, and energy management software will optimize energy use. The digitization and automation of industrial processes using artificial intelligence and big data analytics will minimize waste and energy consumption. Overall, continuing policy support and exploiting technology opportunities will be critical to maximize energy efficiency improvements across all sectors of the economy.
Energy Storage
Energy storage will see massive growth by 2050 to enable the integration of more renewable energy and increase grid resilience. According to the National Renewable Energy Laboratory (NREL), utility-scale energy storage deployment could grow over 125 gigawatts by 2050. Most of this growth will come from lithium-ion batteries, but other longer duration storage like flow batteries and compressed air storage will also expand. Behind-the-meter distributed storage could also reach over 80 gigawatt-hours by 2050, especially if PV and battery costs continue to fall.
This growth in energy storage will help accommodate much higher levels of renewable energy. By storing excess renewable generation when supply exceeds demand, storage helps mitigate renewable intermittency issues. Storage also provides essential grid services that help stabilize the grid when more renewables come online. Additionally, storage enhances resilience by creating microgrids that can island from the main grid during outages. With ample storage deployed, the grid in 2050 will be more flexible, reliable, and resilient.
Smart Grids
Information technology is transforming power grids into “smart grids” that can intelligently manage the supply and demand of electricity. Smart grids utilize a two-way digital communication system between utilities and customers, advanced sensors across the grid, smart meters in homes and businesses, distribution automation systems, and analytics software.
This digital infrastructure allows the grid to detect problems with the network in real-time and self-heal. Smart grids can also dynamically balance electricity supply and demand. For example, smart grids can incentivize customers to use electricity during off-peak hours when there is excess renewable energy, through time-based rates communicated via smart meters. This helps integrate more renewable energy and improves overall efficiency.
According to one source, the global smart grid technology market is projected to grow from $27.68 billion in 2020 to $72.01 billion by 2026, at a CAGR of 17.2% during the forecast period. The key drivers are increasing investments in smart grid technologies, government initiatives to adopt smart grids, and integration of renewable energy sources with smart grid technologies (source). Intelligent management of supply and demand will be critical as grids adapt to handle more fluctuating renewable energy and distributed energy resources in the future.
Carbon Capture
Carbon capture, utilization and storage (CCUS) refers to technologies that can capture CO2 emissions from industry and power generation, preventing them from being released into the atmosphere. The captured CO2 can then be utilized for other purposes or permanently stored deep underground. According to the IEA, reaching net-zero emissions by 2050 would require around 6 gigatonnes of CO2 to be captured each year by 2040, increasing to over 8 gigatonnes by 2050 (IRENA).
CCUS enables low-carbon use of fossil fuels in hard-to-abate sectors like cement and steel production. By capturing the CO2 emissions, fossil fuel use can continue while reducing the climate impact. Many companies are developing large-scale CCUS facilities, with over 50 new projects announced since 2022 aiming to capture around 125 megatonnes of CO2 annually by 2030 (IEA). Widespread deployment of CCUS will be essential to meet net zero goals while allowing certain industries to continue using fossil fuels as needed.
Hydrogen
Hydrogen is poised for significant growth as a clean energy source by 2050. According to DNV’s Hydrogen Forecast to 2050, hydrogen is predicted to make up 5% of the global energy mix by 2050, up from just 0.5% in 2030. The demand for hydrogen is estimated to reach as high as 500 million metric tons per year by 2050, driven by its use in industry, transportation, and electricity generation (PwC).
Clean or green hydrogen produced from renewable electricity via electrolysis could grow dramatically to meet decarbonization goals. Hydrogen may be especially important for decarbonizing hard-to-abate sectors like long-distance transport, shipping, aviation, steel and cement production. Fuel cell electric vehicles running on hydrogen could displace diesel-powered heavy transport. Ammonia and synthetic hydrocarbon fuels produced from hydrogen may enable shipping and aviation to move away from oil. The versatility of hydrogen across the energy system means its growth prospects are substantial.
Nuclear
Nuclear power generation has the potential to play a major role in meeting the world’s growing energy needs while reducing greenhouse gas emissions. According to the International Atomic Energy Agency (IAEA), global nuclear capacity could grow 10-25% by 2050 under a high projection scenario, up from current levels of around 11% of global electricity generation [1]. This growth will likely come from both existing fission technology as well as emerging fusion technology.
Fission reactors, which split uranium atoms to generate energy, provide constant baseline power with very low carbon emissions. However, high upfront capital costs, public concerns about safety, and the issue of radioactive waste have hampered growth in some countries. Newer generation III/III+ reactor designs aim to be safer and more cost-effective, while generation IV designs promise improved sustainability and waste management. Despite cancellations of some nuclear projects, major growth is still expected in countries like China and India.
Fusion power, which joins atoms together, remains experimental but could be a gamechanger. Major fusion projects like ITER aim to demonstrate the feasibility of commercial fusion energy by 2035. If successful, fusion would provide limitless baseload power with much less radioactive waste than fission. However, enormous technical hurdles remain. The debate continues around whether fusion will arrive fast enough to significantly impact decarbonization goals for 2050.
Overall, nuclear power is likely to remain controversial but still grow modestly as an emissions-free energy source. Supporters argue it can provide reliable baseload power to complement renewables and help rapidly phase out fossil fuels. Critics counter that alternatives like renewable energy storage are safer and cheaper. The future role of nuclear will depend on factors like technology cost/development, government policy, and public acceptance.
Conclusion
This report has highlighted the major trends and technologies that will shape our energy systems by 2050. Renewable energy, especially solar and wind, will see massive growth and become the dominant sources of electricity. Electrification of transport, buildings and industrial processes will also accelerate. Energy efficiency improvements will play a crucial role in reducing demand growth. Emerging solutions like hydrogen, carbon capture and energy storage will complement the increasing role of renewables.
There is still uncertainty around the exact mix of technologies and speed of change. However, it is clear that planning for a secure, sustainable energy future requires ambition and foresight from policy makers, investors and companies. Though the shift will not be easy, the societal and environmental benefits make this energy transition necessary and inevitable if we are to meet our climate goals and build prosperous low-carbon economies.
