A new report forecasts that the world will shift from the age of oil and gas to the age of renewables by 2035, at which point nearly 20% of global power needs will be met by solar or wind.
According to Wood Mackenzie’s “Thinking global energy transitions: The what, if, how and when” report, not only will solar and wind play a major role in power generation by 2035, but electric vehicles (EVs) will do so too. The research has shown that over 20% of all miles travelled around the world by cars, trucks, buses and bikes will be with electric motors instead of gasoline or diesel. Oil demand displaced from EVs is expected to double to almost 6 million barrels per day by 2040, Wood Mackenzie says.
The adoption of renewables and electrified transport will not stop then but will rather increase rapidly after 2035. Moreover, the researchers believe that half of all new power generating facilities built globally will be using either solar or wind, or a hybrid combination with storage.
Wood Mackenzie notes that solar photovoltaic (PV) and onshore wind costs have plunged by 80% and 30%, respectively, since 2010. At the same time, costs associated with batteries are now 80% lower than in 2010 and advancements in energy storage technologies should make EVs a viable solution for local air pollution concerns. The firm adds, though, that between 40% and 60% of new car sales should be electric by 2035 if deeper decarbonisation is to be achieved. Consumer acceptance of EVs and battery price reductions are the two vital factors in the pursuit of this objective.
“The next 15 years of the transition will be critical to study, prepare and plan,” concludes Prajit Ghosh, Wood Mackenzie’s head of global strategy, power and renewables.