1、CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDENERGY TRANSITION OUTLOOK 2023A global and regional forecast to 2050Remi EriksenGroup President and CEO DNVFOREWORDSo,when will the real global transition begin?Our prediction is that emissions from oil use will peak

2、 in 2025 and those from natural gas in 2027.EV uptake and solar PV installations,both of which are now at record levels,are set to continue strongly.Moreover,the Fit for 55 and RePowerEU policies in the EU and the Inflation Reduction Act in the US are already demonstrating powerfully that decarboniz

3、ation policies can work on a grand scale.In our forecast,non-fossil sources constitute 52%of the energy mix in 2050,a sharp increase from the 20%they represent today.We have frequently used numbers to place a dimension on two corners of the energy trilemma:affordability(such as levelized cost and pr

4、ices)and sustainability(such as carbon emissions intensity).So far,the third corner of the trilemma energy security has been largely viewed in a qualitative way.In the past 18 months the world has experienced the conse-quences of the grab for gas in the wake of Russias invasion of Ukraine and the re

5、version to coal in some regions as a cheaper alternative to gas.We have also seen increased attention to renewable projects in most places,as domestically-sourced energy is harder to disrupt and many governments are looking at nuclear with renewed interest.Local sourcing of both energy and energy in

6、fra-structure is emerging as a prominent national objective.This year,our research team has revised our power sector forecast to better reflect the existing and future willingness of countries to pay a premium for locally-sourced energy and that has notably impacted our results.For example,for the I

7、ndian Subcontinent we now forecast a slower transition with more coal in the energy mix,and in Europe the transition is accelerating with the alignment of climate,industrial,and energy security objectives.Short-term energy forecasting has been a thankless task in the recent context of the pandemic,w

8、ar,and price shocks.However,within our system-dynamics approach,the long lines of development are clear:the energy landscape will look very different in the space of a single generation.We forecast a 13-fold increase in solar and wind electricity production by mid-century.Electrification will more t

9、han double between now and 2050,bringing efficiencies to the energy system,which,as we detail in this report,brings down the cost per unit of energy for consumers in the longer run.However,in the coming ten years,a critical issue is how quickly that can happen with a lack of electric grids and renew

10、able supply-chain capacity emerging as critical bottlenecks to a faster transition.And a faster transition is most definitely needed because our most likely forecast for our energy future through to 2050 translates into global warming of 2.2C by the end of this century.Achieving a net-zero energy sy

11、stem by 2050 to secure a 1.5C warming future is more difficult than ever.That does not mean we should not be aiming for that target.With more expansive policies promoting renewable electricity and other zero-carbon solutions,not just in the high-income world,but globally,we have the means to keep th

12、e world on track to be at,or very near,net zero by mid-century.If energy transition means clean energy replaces fossil energy in absolute terms,then the transition has not truly started.The transition has happened in some regions and for many communities and individuals,but globally,record emissions

13、 from fossil energy are on course to move even higher next year.Up to the present,renewables have met some,but not all,of the worlds additional energy demand.Optically,the transition seems to be in stall mode,with high oil and gas prices fuelling an exploration surge while many renewable projects ar

14、e experiencing an increase in cost due to inflationary and supply-chain pressures.2DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDHIGHLIGHTS3DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPEN

15、DIXELECTRICITYRENEWABLESDEMANDThe transition is still at the starting blocks Global energy-related emissions are still climbing and are only likely to peak in 2024.That is effec-tively the point at which the transition begins,even though across many nations and communities,energy-related emissions h

16、ave already started to fall Over the last five years(20172022)renewables have met 51%of new energy demand and fossil sources 49%.In absolute terms,fossil-fuel use is still growing The grab for gas in the wake of Russias invasion of Ukraine,and the disruption of the oil market,has led to high prices

17、and a surge in new oil and gas projects High gas prices have also seen several countries intensify coal-fired power generation over the last 18 months,driving emissions yet higher.Natural gas is losing its status as a bridging fuel for the transition Renewables outsprint fossils from the mid-2020s T

18、he transition involves both the addition of renewables and the removal of fossil sources(Figure 1)It will take the next 27 years to move the energy mix from the present 80%fossil 20%non-fossil split to a 48%:52%ratio by mid-century From 2025 onwards,almost all net new capacity added is non-fossil.Wi

19、nd and solar grow ten-fold and 17-fold,respectively,between 2022 and 2050 Over the next decade,new fossil production in low-and medium-income countries will largely be nullified by reductions in high-income countries Coal use peaked in 2014 but has come close to that level in recent years.However,it

20、s share of primary energy falls from 26%today to 10%in 2050 Fossil primary energy demand declines from 490 EJ to 314 EJ by 2050.Cumulatively,the fossil energy not used compared with todays use amounts to 1,673 EJ or 275,000 million barrels of oil equivalent by 2050HIGHLIGHTSSUSTAINABILITYAFFORDABILI

21、TYSECURITYEnergy trilemmaFIGURE 34DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDEnergy security is moving to the top of the agenda Geopolitical developments over the last 18 months have brought energy security into sharp focus w

22、ith the disruption of energy supplies and price shocks for energy importers Worldwide,energy produced locally is being prioritized over energy imports This trend is favouring renewables and nuclear energy in all regions and coal in some regions We have now factored into our power sector forecast the

23、 willingness of governments to pay a premium of between 6%and 15%for locally-sourced energy Reshoring and friend-shoring policies are adding to supply chain complexities and costs already strained by inflation 2022 saw an increase in the levelized cost of renewables in several regions,particularly w

24、ith wind projects,but we expect cost reductions to return to historic learning curve rates by 2028 In the long term,energy security and sustainability will pull in the same direction,with decarbonizing energy mixes with wind,solar,and batteries as the main sources increasingly shielding national ene

25、rgy systems from the volatility of the inter-national energy tradeProgressive policy is making an impact Big decarbonization policy packages rolled out in the last year are supercharging the transition regionally and nudging it forward globally The Inflation Reduction Act is accelerating the transit

26、ion in the US,with USD 240bn already committed in clean investments in response to the broad array of incentives under the Act In the EU,the EU Green Deal,REPowerEU,and Fit for 55 policy packages make Europes net-zero goal more realistic Shipping is set for a faster transition due to the inclusion i

27、n EUs emission trading system and the IMOs ambitious new decarbonization strategy aiming for net zero by 2050 The race to the top in clean technology amongst the advanced economies will drive global learning benefits in e.g.hydrogen and carbon capture and storage technologies The scaling of clean te

28、ch in advanced economies will only partly benefit medium-and low-income regions where economic development and other SDGs are prioritized.De-risked financing is needed to accelerate the pace of the transition beyond leading regionsHIGHLIGHTS5DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FU

29、ELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDGridlock impeding the near-term expansion of decarbonization technologies Despite inflationary and supply-chain headwinds,solar installations reached a record 250 GW in 2022.Wind power contributed 7%of global grid-connected electricity and

30、installed capacity will double by 2030 The global grid transmission and distribution combined will double in length from 100 million circuit-km(c-km)in 2022 to 205 million c-km in 2050 to facilitate the fast and efficient transfer of electricity.However,in the near term,transmission and distribution

31、 grid constraints are emerging as the key bottleneck for renewable electricity expansion and related distributed energy assets such as grid-connected storage and EV charging points in many regions,including the US,Canada,and Europe Our forecast factors in the impact of lagging grid capacity in the n

32、ear-and medium-term on build-out rates of renewables Both the EU and the US are advancing policies to address permitting delays,but a deeper policy response is needed,which may encompass expro-priation and financing to ease cable manufacturing production constraints Grid expansion is also important

33、for the production of hydrogen,which in turn is dependent on more robust demand-side measure to incentivize offtakeGlobal emissions will fall,but not fast or far enough We forecast global energy-related CO2 emissions in 2050 to be 46%lower than today,and by 2030,emissions are only 4%lower than they

34、are today The emissions we forecast are associated with 2.2C of global warming above pre-industrial levels by the end of this century From 2024,the share of renewables in the primary energy mix will grow by more than one percentage-point per year,resulting in a 52%non-fossil share by 2050,up from 20

35、%today The pace of the transition is far from fast enough for a net-zero energy system by 2050.That would require roughly halving global emissions by 2030,but our forecast suggests that ambition will not even be achieved by 2050 Limiting global warming to 1.5C is therefore less likely than ever Whil

36、e emissions rise,the consequences of climate change are becoming more visible and impactful,with extreme weather events becoming more frequent and damagingENERGY SECURITY AND A SHIFTING GEOPOLITICAL LANDSCAPEGlobalization the free flow of ideas,people,goods,services,and capital arguably started in e

37、arnest in the 19th Century once steamships ruled the waves(ORourke and Williamson,2000).Since the end of World War II,spurred on by technological progress and the so-called long peace in the post-war decades,the trend of moving things between nations has grown almost four-fold,as a measure of trade

38、relative to global GDP(Aiyar et al.,2023).The end of the Cold War,the change in Chinese economic policy,and the creation of the World Trade Organization(WTO)in 1995,all boosted global trade,with medium-income countries and regions like China,South East Asia,and Latin America benefitting economically

39、,with widespread gains in poverty reduction and improved livelihoods.Against this backdrop,the world has now entered a period of slower expansion of cross-border coop-eration and trade that started 15 years ago with the financial crisis.This is sometimes referred to as slow-balization.During this pe

40、riod,trade measured as a fraction of GDP plateaued.We have also witnessed a more charged geopolitical landscape triggered by several significant events,such as the annexation of Crimea by the Russian Federation in 2014,the foreign policies pursued by President Trump,the COVID-19 pandemic,and the war

41、 in Ukraine.Even though the annexation of Crimea in 2014 reinforced the US-Europe alliance,it also highlighted some areas of divergence within the alliance.Early warnings about the dependence of some European countries on Russian energy supplies went largely unheeded but were indeed prophetic.The CO

42、VID-19 pandemic revealed supply-chain vulnerabilities that decades of globalization had created.These included the pursuit of a better,cheaper,faster mindset,an over-reliance on a rela-tively few manufacturing hubs,a lack of visibility into supply-chain dynamics,and inexperience in resilient sourcin

43、g from a diversity of suppliers.Initially,coun-tries competed for access to medical supplies during the pandemic,but other shortages emerged rapidly due to shifts in demand,labour shortages,and other structural factors during the long months of lockdown.In the post-pandemic period there has been a r

44、ush to diversify supply chains,boost visibility through digitalization,and address vulnerabilities,not least cyber security.At the same time,govern-ments have turned to policy incentives to launch or return production to their homelands(West,2022).Slowbalization:less international trade and more foc

45、us on national energy security,supply chains,and local manufacturingThe world economy has entered a slowbalization phase dating back to the 2007-2008 financial crisis,characterized by a slowdown in the pace of inter-national trade and weakening political support for open trade in a shifting geopolit

46、ical landscape.There is heightened focus on reshoring of production and,of relevance to our forecast,this often adds to the cost of energy CAPEX everywhere.6DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDIn particularly sensitive

47、 areas,for example microchip manufacturing,governments started drafting legislation to secure supply by boosting domestic R&D and production.Anxiety over brittle supply chains was further increased after Russias invasion of Ukraine in February 2022.The war instantly imperilled food security,both dir

48、ectly and through the curtailment of fertilizer supplies,and raised vulnerabilities in several supply chains.However,the principal impact of the war has been its disruption of global energy supply chains.Given that Russia is Europes main supplier of natural gas(around 45%of imports in 2021),the war

49、raised serious concerns about energy security in Europe.Fears of supply cuts as Europe looked for alternative gas supplies led to record increases in energy prices and global market imbalances and disruption.The situation prompted Europe to expedite its efforts towards energy diversi-fication and gr

50、een energy transition,focusing on renewable energy and energy efficiency measures.This long chain of events,culminating in the energy supply shock of 2022,has embedded a shift in international relations and ushered in an era where energy security becomes the primary focus in the energy trilemma(see

51、sidebar).Energy security concerns differ and diverge across regions.Energy importing regions will favour resources that are locally available or accessible from reliable partners;exporting countries will have to convince their partners that they are a trustworthy,long-term source of supply.The effec

52、t on the energy transitionEnhancing security of supply is achievable through increasing domestic energy production,diversi-fication of energy sources in the supply mix,or diversification geographically by using a variety of suppliers and transportation routes.Energy security generally pulls in favou

53、r of renewable energy as the obvious,low cost,nationally-available resource.Nuclear energy is similarly favoured,but energy security can also slow the transition if countries turn to available fossil resources to address energy shortfalls.Some of the emerging trends include:A surge in energy prices

54、resulting from Russias invasion of Ukraine has certainly made renewable energy more competitive.However,it has also put economic pressure on many households and businesses,leading to energy poverty in some cases which has prevented or delayed investment in clean technology like electric vehicles(EVs

55、)and heat pumps.At a national level,many low-and medium-income countries that were previously dependent on importing natural gas have had to switch to local energy resources,such as cheaper coal,in order to secure energy supply.Investment in energy infrastructure,including energy storage and smart g

56、rid technology,is advancing the deployment of renewable energy.However,the tight market for fossil fuels and high prices for oil and gas has also led to a surge in oil projects that carry the risk of locking countries into a carbon-intensive energy system for years to come.Increased supply-chain cos

57、ts caused by disruptions in the production and delivery of intermediate goods,like steel and computer chips,have chal-lenged global manufacturing supply chains and,combined with import tariffs,have created a new situation for global trade.Renewables projects,with tighter margins than many oil and ga

58、s projects,have been disproportionately affected by this chain of events,leading to a rise in cost of some renewable projects and attendant delays and,in some notable cases,failed auctions.Nuclear is in vogue thanks to the changes in the geopolitical landscape and focus on energy security that have

59、made nuclear energy a more attractive option for some countries,sending uranium prices to their highest level since the Fukushima accident.While we see concrete life-extension programmes,it is also likely that there will be a slightly broader uptake of nuclear energy.How big this will be depends on

60、how nuclear manages to solve some of the same challenges it has faced before,such as cost overruns,safety concerns,waste handling,public opinion,and the proliferation risks associated with a potential higher uptake.General energy security concerns are,however,likely to accept the higher costs of nuc

61、lear,which leads to a slightly higher uptake.Energy trilemmaThe energy trilemma describes the attempt to balance energy security,equity(accessible and affordable),and environmental sustainability.Since the signing of the Paris Agreement and the rapid advance of renewable energy,the quest to reduce e

62、missions has been in the spotlight.However,energy security is now moving to centre stage due to the shifting geopolitical landscape and escalating tensions in some regions where control over energy is being used as a means to achieve political ends.SECURITYENERGYTRILEMMAAFFORDABILITYSUSTAINABILITY7D

63、NV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDA protectionist policy shift towards national energy policies that prioritize energy security,resilience,and independence could potentially speed up the energy transition,as countries

64、 invest more in locally available renewable energy sources.However,it also risks promoting protectionist policies that could hinder global cooperation on technology transfer,R&D,and action on climate change.Societal responses to inflation and the cost-of-living crisis have stoked social unrest which

65、 could delay the energy transition as the focus shifts to short-term priorities.Conversely,it is possible that public sentiment could favour energy independence through renewables and nuclear and the acceptance of higher energy prices as strategic means to secure energy independence.How we incorpora

66、te energy security and geopolitical trends into our forecastIn our view,the geopolitical changes and energy security described above have a direct impact on the energy transition and we have therefore taken initial steps to factor this into our forecast of the most likely energy future.Three key shi

67、fts have been considered,and we articulate each one sepa-rately with respect to their qualitative or quantitative impact on our forecasting model.Energy security considerations in the power sector We see nations/regions increasingly willing to support domestic energy resources to curb their dependen

68、ce on uncertain energy imports and to hedge against the potential weaponization of energy.In some cases,energy resources which are predomi-nantly imported are being penalized or deprioritized,even if short-term economics favour those sources.The prioritization of energy resources depends on the avai

69、lability of different energy resources within a countrys borders and on technological know-how and availability of a qualified workforce.This behaviour is most pronounced in the power sector,and we have therefore made direct changes in our power sector modelling to reflect energy security considerat

70、ions.These changes include the prioritization of both low-carbon and fossil-based energy resources.For example,regions such as Europe will prioritize nuclear and renewables,while the Indian Subcontinent will prioritize domestically available coal.Inputs to the ETO modelling:We have revised the regio

71、nal policy support of different electricity generators in our ETO model to reflect support levels directly observed for the year 2022.These support levels are then projected forward to reflect an ongoing attention to energy security considerations ranging between 6%to 15%globally between 2023 and 20

72、50 for all power generation sources.The support levels vary tempo-rally and regionally,as stated above,with some regions favouring non-fossil sources and others fossil sources.We acknowledge the difficulties of disag-gregating energy security-based support from,for example,decarbonization support.Ad

73、justments to our model in this regard will therefore be subject to ongoing research.8DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDImpacts on the forecast results:To assess the impact of these new energy security factors,compare

74、d last years forecast(which did not factor in energy security directly)with what we consider the most likely future this year.On a global aggregated scale,the difference in primary energy demand is about 5%.However,that is attributable mostly to the revised and higher popu-lation forecast from WIC(2

75、023).Overall,the change in the global shares of natural gas,coal,renewables,and nuclear are minimal in 2050.The effects of energy security considerations are more pronounced at a regional and power generator level.While the share of nuclear in global primary energy consumption increases from 5%to 6%

76、in 2050,between the two forecasts,Europes nuclear electricity generation in 2050 increases from 647 TWh/yr to 724 TWh/yr,a 12%increase.In Greater China,both coal and nuclear increase by 19%and 41%,respectively,from last years forecast to this years while there is less biomass and wind deployed.In 20

77、50,the Indian Subcontinent has almost 500 TWh/yr more coal electricity in our most likely future than last years forecast.Reshoring energy technology manufacturing infrastructure The second energy security shift we have considered is securing access to critical energy infrastructure within the regio

78、nal energy system and the resulting short-term increase in cost of the energy infra-structure/technology.An example is building alternative local/national supply-chains(e.g.for solar panels)to diversify and control a regions own supply chains and domestic manufacturing to reduce dependence on suppli

79、es from one region.Input to the ETO modelling:We have considered the impact of reshoring energy technology manufacturing infrastructure as a short-term cost increase of 10%on the capacity costs of wind(both onshore and offshore),solar,and Li-ion batteries in Europe only.The cost increase gradually r

80、ises from 2023 and reaches a maximum of 10%in the year 2028 before returning to zero cost-increase by 2033.We only consider this impact as a cost for reshoring for Europe because,given the existing region-differentiated technology costs that we input to the model for the above-mentioned energy techn

81、ologies,it is uncertain whether these cost increases will manifest for other regions,such as North America,whose higher-than-global-average costs(based on pre-existing market factors)already reflect some of the reshoring costs.Impacts on the forecast results:The cost increase on wind,solar,and Li-io

82、n batteries in Europe does not have a significant impact on Europes or the worlds energy transition.In the coming years we may,on the basis of new obser-vations,consider such cost increases on rest of the world as well.Regional restructuring of the global economyThere is an accelerating shift in sou

83、rcing and global manufacturing patterns to reduce dependence on a single manufacturing hub and boost supply chain resilience(The Economist,2023).For example,we are likely to see some production moving out of China to other neighbouring countries in South East Asia and the Indian Subcontinent;in othe

84、r instances,domestic manufacturing strat-egies are pursued,combined with strategic trade partners;other upstream initiatives are aimed at securing access to raw material sources.All of this is reflected in moderately changing manufacturing volume effects in our model,where the manufac-turing sector

85、output is reduced in some regions and diverted to others.The impact on global manufacturing energy demand of volume shifts is minimal,as the carbon intensity of the regional manufacturing subsectors does not differ markedly and the diverted volumes relative to total manufac-turing is small.The impac

86、t in individual regions is low to moderate depending on the size of existing manufacturing sector volumes.ConclusionSecuring access to energy has been a perennial and dramatic feature of the energy landscape since the 19th Century.Oil has been instrumental in shaping the geopolitics of the 20th Cent

87、ury,not least by fuelling conflicts and profoundly shaping the course of major wars.Going forward,we expect a future with a far wider mix of energy sources and for energy efficiency to play an outsized role owing to widespread electrification.Daniel Yergin recently characterized this shift,it is one

88、 involving a move from a world of big oil to a world of big shovels”(Yergin,2020).This characterization aligns with several studies documenting that the energy transition is mineral-and metal-intensive (World Bank,2020;IRENA,2023a).The major shift we forecast is a transition from a world where energ

89、y is extracted in a handful of nations and traded over long distances to the rest of the world,to a situation where energy is produced locally,largely by renewables,and consumed locally in the form of electricity.Our forecast is that electrification will more than double over the next 30 years.This

90、trend has intensified in recent years owing to energy security concerns which militate against dependence on energy through transcontinental pipelines and trans-ocean shipment.That,in turn,has prompted us to directly factor in energy security as a driver of change in the coming energy future.We expe

91、ct a future with a far wider mix of energy sources and for energy efficiency to play an central role owing to widespread electrification.9DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDMain policy trends included;caution on untes

92、ted commitments,e.g.NDCs,etc.Behavioural changes:some assumptions made,e.g.linked to a changing environmentOur best estimate,not the future we wantA single forecast,not scenariosLong-term dynamics,not short-term imbalancesContinued development of proven technology,not uncertain breakthroughs10DNV En

93、ergy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDINTRODUCTIONAbout this OutlookThis annual Energy Transition Outlook(ETO),now in its 7th edition,presents the results from our independent model of the worlds energy system.It covers the pe

94、riod through to 2050 and forecasts the energy transition globally and in 10 world regions.Our forecast data may be accessed at details on our methodology and model can be found on page 200.The changes we forecast hold significant risks and opportunities across many industries.Some of these are detai

95、led in our supplements:Maritime forecast to 2050 Transport in transition to 2050 All ETO reports are freely available on .In addition,we draw our readers attention to ongoing insights into the energy industry published by DNV,which include our most recent Insight report,Closing the energy storage ga

96、p.Our approachDNV presents a single best estimate forecast of the energy future,with sensitivities considered in relation to our main conclusions.However,we also publish our Pathway to Net Zero Emissions scenario(to be launched ahead of COP 28),which is effectively a backcast of what we consider to

97、be a feasible,albeit challenging,pathway for the world to achieve net-zero emissions by 2050 to secure a 1.5C warming future.We believe readers will find it useful to explore the dimensions of the gap between our best estimate future and our net-zero pathway scenario.Foundational aspects of our appr

98、oach are illustrated below.These include the fact that we focus on long-term dynamics,not short-term imbalances.However,given the rising impact of energy security concerns,we describe how this impacts our forecast in the opening pages on this report.The most significant updates to our model since th

99、e release of our 2022 ETO are listed on page 202.They include,for example,updated GDP and population numbers,revised wind cost and technology parameters,revised carbon prices,a detailed new bioenergy sector model,and the incorporation of new policy developments,most notably the effects of the US Inf

100、lation Reduction Act.Independent viewDNV was founded 159 years ago to safeguard life,property,and the environment.We are owned by a foundation and are trusted by a wide range of customers to advance the safety and sustainability of their businesses.70%of our business is related to the production,gen

101、eration,trans-mission,and transport of energy.Developing an independent under-standing of,and forecasting,the energy transition is of strategic importance to both us and our customers.This Outlook draws on the expertise of over 100 professionals in DNV.In addition,we are very grateful for the assist

102、ance provided by a number of external experts and dialogue with other companies researching the energy transition.All contributors are listed on the last page of this report.Foreword 2 Highlights 3 Introduction 10 1 Energy Demand 12 1 Energy demand 13 1.1 Transport 15 1.2 Buildings 24 1.3 Manufactur

103、ing 30 1.4 Non-energy use(feedstock)33 1.5 The effect of energy efficiency 34 1.6 Final energy demand from all sectors 37 2 Electricity and hydrogen 38 2.1 Electricity 39 2.2 Power grids 52 2.3 Storage and flexibility 54 2.4 Hydrogen 57 2.5 Direct heat 623 Renewable and nuclear energy 63 3 Renewable

104、 and nuclear energy 64 3.1 Solar 64 3.2 Wind 69 3.3 Hydropower 75 3.4 Nuclear power 76 3.5 Bioenergy 78 3.6 Other Energy 81 4 Fossil fuel 83 4 Fossil fuel 84 4.1 Coal 85 4.2 Oil 87 4.3 Natural gas 91 4.4 Summarizing energy supply 94 5 Financing the energy transition 96 5.1 Energy expenditures 97 5.2

105、 Challenges and opportunities facing investors 101 5.3 How will cost of capital evolve?102 6 Policy and the energy transition 107 6.1 Policy and the energy transition 108 6.2 The transition contex shaped by 10 opposing forces 110 6.3 The policy toolbox 111 6.4 Synopsis on the state of policy in ETO

106、regions 116 6.5 Policy factors in the ETO 118 7 Emissions and climate implications 122 7 Emissions and climate implications 123 7.1 Emissions 123 7.2 Carbon capture and removal 126 7.3 Climate implications 131 8 Regional transitions 133 8 Analysis of the regions 134 8.1 North America 135 8.2 Latin A

107、merica 138 8.3 Europe 143 8.4 Sub-Saharan Africa 151 8.5 Middle East and North Africa 157 8.6 North East Eurasia 163 8.7 Greater China 168 8.8 Indian Subcontinent 175 8.9 South East Asia 181 8.10 OECD Pacific 186 8.11 Regional emissions 191 8.12 Comparison of regional transitions 192 Appendix 194 Re

108、ferences 204 The project team 210CONTENTS11DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMAND1Highlights1 Energy demand 131.1 Transport 151.2 Buildings 241.3 Manufacturing 301.4 Non-energy use(feedstock)33 1.5 The effect of energy e

109、fficiency 34 1.6 Final energy demand from all sectors 37We quantify and forecast the energy demand for the major demand sectors:transport,manufacturing,and buildings.We explore deep shifts in the energy carriers serving these sectors.This includes both direct electrification(e.g.in the case of EVs),

110、and indirect electrification via hydrogen and its derivatives(e.g.in aviation.shipping,and manufacturing heat).The chapter concludes with a consideration of the global shifts in final energy demand,which peaks towards the end of our forecast period and actually reduces slightly by 2050.In our discus

111、sion on energy efficiency,we analyse how this occurs despite the continued growth in demand for useful energy(i.e.energy services)ENERGY DEMAND12DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDdecade before 2050,final energy deman

112、d is virtually flat,effectively levelling off at 2040 levels.That is because massive efficiency gains,particularly those enabled by electrification,will almost offset the population and economic growth propelling demand for energy services,see Section 1.5 of this chapter.It is not a given that energ

113、y demand will remain flat after 2050.Once most energy services are converted to electricity,which automatically improves energy efficiency in most sectors,energy demand may start to increase again.This could be countered by an eventual decline in the global population.By 2050,we expect the global po

114、pulation to increase by about 20%to some 9.6 billion people and the global economy to almost double to USD 320trn,with an average growth rate of 2.4%from 2022 to 2050.Further details on population and economic growth are included in the Appendix A.1 of this Outlook.The total amount of energy service

115、s required globally measured in goods produced,km of transport,or square metre heated will roughly double across the globe,but energy demand will not.Instead of doubling,energy demand will grow only 10%from 441 EJ to 489 EJ between now and 2050,as illustrated in Figure 1.1.Moreover,in the This chapt

116、er details our forecast for the four sectors responsible for almost all energy demand:transport,buildings,manufacturing,and feedstock.In each sector,there has traditionally been a strong correlation between economic activity and final energy demand.In the coming three decades,this relationship will

117、change:demand for useful energy will continue to rise but electrification and energy efficiencies will see a levelling off in final energy demand.1 ENERGY DEMAND 13DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDAn all-electric re

118、fuse truck.Image:courtesy Volvo TrucksFinal energy in this Outlook and as shown in Figure 1.1 means the energy delivered to end-use sectors,excluding losses(for example,heat losses in thermal power plants)and excluding the energy sectors own use of energy in power stations,oil and gas fields,refiner

119、ies,pipelines,and similar infrastructure.In terms of the main demand sectors the key develop-ments include the following:Buildings energy use for space cooling will more than triple,while space heating demand will decline somewhat due to new technologies like heat pumps reducing energy needs.Overall

120、 energy demand will increase 29%to 2050,at that time repre-senting 33%of global energy demand,overtaking manufacturing as the biggest demand sector.Manufacturing energy use will maintain its share of global energy use just above 30%in the entire forecast period,with absolute energy use increasing 13

121、%to 156 EJ in 2050.Substantial efficiency gains and increased recycling moderate the increase.The feedstock sector will see energy demand grow by 11%and peak in the mid-2030s,before returning to present levels.Road transport sector will see the strongest shift to electricity and therefore also the s

122、trongest efficiency gains,and while aviation and maritime cannot electrify similarly,global transportation energy demand peaks around 2030 and thereafter reduces to a level 9%lower than today in 2050,at that time representing 23%of global energy use.Although global final energy demand will level off

123、,this is not the case for all regions.In Europe and OECD Pacific,energy demand has already peaked,while in many of the middle-and low-income regions,energy demand will continue to increase through to 2050,as illustrated in Figure 1.2.Greater Chinas share of global energy demand is at 25%,but will de

124、cline to about 22%in 2050,while the Indian Subcontinent will overtake North America as the second largest energy consuming region in the 2040s.Energy demand by carrier is summarized in Section 1.6.It is in carrier form that the story of the energy transition is most apparent,with a shift away from f

125、ossil fuels toward renewables and electricity.As the world population grows and economy expands there is no escaping the fact that humanity will use progressively more energy services.Why do we therefore forecast an energy future where energy demand grows at a rate well below economic growth,and in

126、fact levels off in the 2040s?The answer lies in the difference between useful energy and final energy.Useful energy:is the energy output that serves a specific purpose,such as heating a stove,propelling a vehicle,lighting a room,or running a machine.In our forecast useful energy grows by 90%between

127、now and 2050.Final energy:is the total amount of energy required to meet various needs and,crucially,it includes both useful and wasted energy.Final energy demand refers to the energy delivered to end-use sectors(e.g.transportation,buildings,or manufacturing).In our forecast,global final energy dema

128、nd grows by just 10%before flattening after 2040.The difference between useful energy and final energy is clearly illustrated in the case of an internal combustion engine vehicle(ICEV),which is typically only 25%to 35%efficient meaning that much of the chemical energy in the form of diesel or gasoli

129、ne(the final energy demand)is wasted as heat,incomplete combustion,and friction before it provides the useful work of propelling the vehicle(useful energy).As ICEVs are replaced by EVs,enormous energy losses will be eliminated.For a fuller discussion of the role of energy efficiency in the energy tr

130、ansition,see Section 1.5 of this chapter.A world using more energy,but demanding less of it!14DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDbiofuel blends or provide preferential treatment to biofuels.Anticipating the continuati

131、on of emission-targeted policies and prohibitions,we expect these efforts to persist for another decade,with robust backing from both industry and consumers.Over time,technological advancements and cost learning will render policies boosting biofuels and electrification unnecessary,particularly in r

132、oad transport(responsible for 75%of energy usage in transportation)where EVs uptake is now growing exponentially.We caution,however,that prematurely withdrawing support for EVs,particularly for median and below-median income consumers,could reverse their adoption trend(Sheldon et al.,2023).biofuels

133、contribute 6%and 4%respectively,with electricity accounting for 1%.Currently,the energy mixes for aviation,maritime,and road transportation closely resemble that of the global transport sector,while rail predominantly relies on electricity for its energy source.To combat local air pollution and glob

134、al emissions,the integration of natural gas and biofuels,both in their pure forms and as blends with gasoline and diesel,was initiated several decades ago.While China abandoned its biofuel blending policy(2019)and the Middle East and North Africa,North East Eurasia,and Sub-Saharan Africa have no pro

135、minent biofuel requirements,other regions have either mandates for Current developments in global transportUltimately,reducing carbon emissions in transportation boils down to the fuel challenge.Emissions from trans-portation are spread across a vast network of more than a billion road vehicles,airp

136、lanes,and ships,and these emissions cannot be effectively captured.In addition to from carbon dioxide(CO2),these emissions often consist of potent greenhouse gases(GHGs)and harmful particulate matter that can negatively impact both the environment and human health.The pandemic led to decreased energ

137、y demand in all transport subsectors air,road,rail,and sea.In 2020,total demand across these sectors dropped by 11%.Aviation saw the most significant decline,nearly halving from 2019 to 2020,and is projected to remain below pre-pandemic levels due to reduced business travel.Meanwhile,maritime energy

138、 demand fell by 4%,rail by 5%,and road by 7%.Post-pandemic,all these sectors have now come roaring back to life.In 2022,global transport-related CO2 emissions rose by over 600 million metric tonnes to reach about 8 billion metric tonnes,marking a 7.5%increase from 2021,but still marginally below 201

139、9 levels.The growth was largely driven by aviation,which rebounded to about 70%of 2019 levels after pandemic-related lows.However,the increase in emissions was partially offset by the continued rise of EVs,with over 10 million EVs sold globally in 2022.In 2022,the transportation sector accounted for

140、 26%of the overall global energy consumption,predomi-nantly sourced from fossil fuels.As shown in Figure 1.3,oil constitutes a significant 88%of the energy used in transportation,while natural gas and Transportation across the world is poised for both growth and deep transition.Between now and 2050,

141、there will be a near-doubling in the size of the vehicle fleet;passenger flights will grow 140%above pre-pandemic levels;cargo tonne-miles at sea will expand by 40%;and rail energy demand will almost double while passenger numbers more than double.In 2022,all these transport activities consumed 121

142、EJ.Yet,in the much busier world of 2050 with more goods and people transported than ever,transport activities will in fact consume 9%less energy than at present,or 111 EJ.That will mainly be a consequence of the enormous efficiencies introduced through the electrification of road transport.A steady

143、switch to zero-emission propulsion with biofuels and hydrogen and its derivatives in large parts of aviation and maritime will also contribute to total transport-related emissions falling 44%.1.1 TRANSPORT 15DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXE

144、LECTRICITYRENEWABLESDEMANDThe rise of EVsEV adoption is taking off.Typically,individuals opting for an EV will make their choice by weighing up costs and benefits.Our approach entails simulated buyers choosing between increasingly affordable battery EVs(BEVs)with longer ranges over time,fuel-cell el

145、ectric vehicles(FCEVs),and internal combustion engine vehicles(ICEVs)across three categories:passenger vehicles,commercial vehicles,and two-and three-wheelers.For passenger vehicle buyers,purchase price takes precedence,while operating costs hold more sway for commercial vehicle owners.A notable hin

146、drance to EV adoption in most regions is the scarcity of charging stations within reasonable reach,be it during travel or at destinations like home or work.Achieving substantial EV adoption hinges on both boosting the average fleet range and enhancing charging station availability.We project that th

147、e current battery cost-learning rate of 19%per doubling of cumulative capacity will persist throughout the forecast period.As a result,vehicle prices will decrease in the long term,despite a near-term rise attributed to material shortages and supply-chain challenges.Heightened competition among EV m

148、anufacturers,as recently observed in the worlds biggest car market China,will help alleviate these price increases.In Europe,the average battery size is anticipated to increase from the current 60 kWh/vehicle to around 90 kWh/vehicle in a decade.This expansion will extend vehicle ranges,rendering EV

149、s even more appealing.Battery sizes will vary elsewhere,Commercial vehicles comprise other non-passenger vehicles with at least four wheels and are particularly prominent in less-developed nations.However,as these countries experience economic growth,the share of passenger vehicles in the fleet tend

150、s to rise.This trend is expected to stabilize in the near future.Taxis currently constitute a substantial proportion of the global passenger-vehicle fleet.However,forth-coming structural shifts will change the overall size of the car fleet and,crucially,the total vehicle distance travelled.Communal

151、use of passenger vehicles is more common in regions with lower incomes.Due to the efficiency and cost advantages offered by platform-based ridesharing services,this sector is poised for further expansion.This trend will likely lead to decreased private vehicle ownership,particularly in wealthier are

152、as.Additionally,our projections account for the rising but significantly delayed presence of automated vehicles and the increasing fraction of shared vehicles.Automated and shared vehicles will drive between 20%and 90%more kilometres than a privately owned car,depending on region.The increased utili

153、zation of digitally-enabled transport options(automation and ridesharing)might come at the expense of conventional public trans-portation,walking,and cycling.However,these shifts in modes of transport have not been thoroughly examined.Given the expected interplay of various factors,not least vehicle

154、 numbers and distances travelled,we anticipate that the overall distance travelled by vehicles will not be significantly impacted by automation or ridesharing.RoadFleet developmentA more populous and prosperous world will see the worlds vehicle fleet(passenger,commercial,and two-and three-wheelers)e

155、xpand from 2.4 billion to 3.5 billion vehicles from 2022 to 2050.From 2035,this fleet size will start plateauing owing to the effects of auto-mation and saturation.Vehicle-sharing will also increase and will generally mean that the distance driven per vehicles will be higher,implying that a levellin

156、g off of the fleet size does not necessarily impact mobility.GDP per capita is a driving force behind vehicle density(number of vehicles per person).This link is influenced by various factors like geography,culture,technology,infrastructure,environment,and the presence of alternative transportation

157、options.To forecast future vehicle density trends,we have utilized historical data fitted to a Gompertz curve(a type of S-shaped curve),shown in Figure 1.4.In some cases,expert opinions supplement this,allowing adjustments for the impact of policies promoting alternatives to road transport.We divide

158、 the road transport sector into three categories:passenger vehicles,commercial vehicles,and two-and three-wheelers.Passenger vehicles encompass those with three to eight passenger seats,including most taxis but excluding buses.16DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMIS

159、SIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDthey will represent up to 12%of the commercial EV fleet by 2050,with minor single-digit shares in Europe,OECD Pacific,and North America where hydrogen adoption is bolstered by respective policies.While FCEVs hold a cost and energy-efficiency disadvantag

160、e compared with BEVs,they are likely to find traction primarily in heavy,long-distance commercial vehicle transport.However,even within this domain,a notable portion will be claimed by battery-electric trucks,sharing the market for non-fossil fuel transportation alongside FCEV trucks.Commercial truc

161、king may also continue to incorporate combustion technologies,allowing for biofuel utilization.Policy backing is crucial for hydrogen integration in demand sectors.Although some countries like Japan and South Korea strongly advocate for FCEV adoption in their automotive emission reduction strategies

162、,substantial obstacles persist in the wide-spread adoption of hydrogen in road transport.The conversion of power to hydrogen incurs significant energy losses,and additional efficiency reductions occur when hydrogen is converted back to electricity within the vehicle.Consequently,FCEVs can achieve an

163、 overall well-to-wheel efficiency of only 25%to 35%,significantly lower than the 70%to 90%range achieved by BEVs.Moreover,FCEV propulsion is more intricate and therefore more costly than that of BEVs.As a result,almost all vehicle manufacturers are leaning towards introducing exclusively BEV models.

164、Two-and three-wheelers represent a category of transport with minimal energy consumption in most exhibit better overall carbon efficiency throughout their lifetimes compared with equivalent-sized ICEVs(ICCT,2018).EVs will be 50%of new vehicles sales globally by 2031.When contrasting the utility of E

165、Vs,FCEVs,and ICEVs across these four factors,the adoption of commercial EVs is markedly slower than that of passenger vehicles,despite the prolongation of subsidies.As outlined in Figure 1.5,our projection indicates that EVs will comprise 50%of the new passenger vehicle market share in Greater China

166、 and Europe by the late 2020s,in the early 2030s in OECD Pacific and North America,and globally by 2031.This mile-stone remains a cornerstone of our forecast,largely unchanged over the past five years.In lower income regions,adoption will take longer due to limited charging infrastructure and fewer

167、subsidies.Nevertheless,even in areas with slower initial uptake,the 50%threshold will be reached by mid-century.By 2050,ICEVs will scarcely be sold in Greater China and Europe,while other regions,notably North East Eurasia,will still see ICEVs accounting for around 30%of new passenger vehicle sales.

168、We forecast FCEVs to enter the road transport land-scape in visible amounts after 2030.In Greater China,influenced by regional commuting patterns and corresponding range requirements.Economics of EVsTotal cost of ownership(TCO)serves as a pivotal factor in purchase decisions,reflecting the influence

169、 of public policy support.Material scarcity and supply-chain limitations,including localization challenges,will initially exert upward pressure on vehicle expenses but are expected to ease over time due to competitive dynamics and innovative approaches.Beyond 2030,the decline in operational costs wi

170、ll lead to longer driving distances,consequently elevating the TCO per vehicle.Current TCO-influencing policies encompass buyer incentives for passenger EVs,varying from no incentives in low-income nations to several hundred USD in certain countries and exceeding several thousand USD in OECD regions

171、,notably including the US under the Inflation Reduction Act(IRA).Both passenger and commercial vehicles benefit from these subsidies,which encompass substantial support for vehicle and battery manufacturers.China and Norway,the leading nations in EV adoption rates(commercial vehicles in China and pa

172、ssenger vehicles in Norway),adopt a combination of EV pref-erential treatment and indirect subsidies for buyers.Meanwhile,in Europe,existing policies promote EVs by granting carmakers advantages for zero-emissions vehicles while imposing additional charges on fleets that surpass the set target(EC,20

173、19).Commercial vehicles need larger batteries,and we anticipate more substantial and extended subsidies per vehicle.We expect continued willingness to provide such support in OECD regions and Greater China,enhancing the appeal of commercial EVs through the TCO effect by making ICEs less attractive v

174、ia higher carbon pricing.Beyond direct purchase and manufacturing subsidies,most regions employ various favourable operational incentives for EVs.These include privi-leges like bus lane access,free parking,and reduced or eliminated registration fees and road taxes.Road taxes are widespread globally

175、and often feature an explicit carbon tax component in OECD nations(OECD,2019).We anticipate a rise in tax and carbon price levels to reflect local air quality improvement efforts and initiatives aimed at curbing congestion and greenhouse gas emissions.Assessing buyer preferencesWhen assessing the co

176、mparative benefits of BEVs,FCEVs,and ICEVs,we consider four significant factors,each with varying importance:Speed of recharging/refuelling Availability of charging/fuelling stations within reach Convenience of EV use EVs advantage in terms of ecological footprintThe ecological footprint advantage r

177、eflects the value attributed to using low-emission electricity or low-emission hydrogen as fuel and the associated environmental benefits.Notably,even EVs powered by electricity derived from a high-fossil energy mix 17DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGION

178、SAPPENDIXELECTRICITYRENEWABLESDEMANDregions,except for Greater China,the Indian Sub-continent,and South East Asia.Therefore,our vehicle demand and electrification modelling for two-and three-wheelers is confined to these three regions,exclusively encompassing registered vehicles(electric bicycles ar

179、e categorized as household appliances rather than road vehicles).We project swift electrifi-cation within this segment;already,more than a third of all two-and three-wheeler sales in China are BEVs.The electrification of commercial vehicles will take place at a slower pace than for passenger vehicle

180、s.The world is divided into front-runner regions and slower adopters concerning the uptake of commercial BEVs.Greater China is poised to achieve a 50%sales share for commercial BEVs within roughly five years,followed by Europe two years later.In contrast,North East Eurasia is not expected to reach a

181、 50%sales share for BEVs within our projected timeframe,as shown in Figure 1.6.Commercial FCEVs will play a role for heavy-duty long-haul trucking,although electric solutions are eating into this category at a faster rate than we had previously forecast.18DNV Energy Transition Outlook 2023CONTENTSFI

182、NANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDThe 2-and 3-wheelers are electrifying rapidly and more than a third of sales in this vehicle category are already electric in China.A transformation of the global vehicle fleetFigure 1.7 depicts our projection for the vehicle

183、fleet development,encompassing two-and three-wheelers,considering the impact of both increased ridesharing and automation.The current passenger vehicle fleet of 1.2 billion is estimated to grow to slightly below 2 billion by 2050,while the share of ICEVs dramatically declines from 97%to below 40%by

184、mid-century.The conversion to electric power will encompass nearly the entire fleet of two-and three-wheelers by 2040,although the adoption of EVs in commercial vehicles lags behind advancements in the other two categories.Even though EVs are predicted to constitute almost three-quarters(72%)of the

185、global vehicle fleet by 2050,they will only contribute around 30%of the energy demand within the road subsector,while hydrogen FCEVs will contribute an additional 5%.The smaller segment of the vehicle fleet still reliant on fossil-fuel combustion will be responsible for the major portion of energy c

186、onsumption.In 2050,oil will account for nearly 60%of the global road subsectors energy demand,with natural gas representing 4%.It is in carrier form that the story of the energy transition is most apparent,with a shift away from fossil fuels towards renewables and electricity.19DNV Energy Transition

187、 Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDPhoto by Dennis Schroeder,NREL 48742Image,courtesy:Deutsche Post DHLfuel,making hybrid-electric approaches pertinent for medium and long-haul flights.However,since only a minor share of aviation fuel is

188、consumed during short-haul flights,electricitys share in the aviation fuel mix is predicted to reach only 2%by 2050.Two alternative pathways under examination are poised to reshape the aviation fuel landscape:pure hydrogen and sustainable aviation fuels(SAF).This transition entails higher costs comp

189、ared to current oil-based fuels,both in the short term and leading up to 2050.Thus,the impetus for changes in fuel and technology are anticipated to stem primarily from kilometre.Although annual efficiency progress will decelerate from the present 1.9%per year to 1.2%per year by 2050,the cumulative

190、impact will restrict fuel consumption to a mere 40%increase(Figure 1.9),despite the anticipated 140%surge in flight numbers.Cargo flights will also rise,yet passenger flights will continue to dominate aviation.Currently,cargo trips account for 15%of global aviation energy consumption(WEF,2020),and t

191、his proportion is projected to remain constant across all regions throughout the forecast period.Fuel mixAviation faces limited options to replace oil-based fuel,and is thus often labelled a sector hard to decarbonize.On the one hand,the adoption of low-GHG-emission technologies and fuels is eased b

192、y aviation having a relatively manageable group of stakeholders and an international governance framework facilitating decision-making.On the other hand,the future cost and availability challenges for alternatives to conventional jet fuel remain significant hurdles,inhibiting widespread adoption due

193、 to high expenses and limited supply and infrastructure.Electrification is emerging as a viable propulsion solution primarily for short-haul flights only,due to battery weight.Commercial electric aircraft deployment is projected to commence before 2030,initially focused on very small aircraft carryi

194、ng fewer than 20 passengers.This trend will expand in the 2030s to encompass slightly larger short-haul planes,predominantly in leading regions.Batteries possess notably lower energy density than aviation AviationPre-pandemic,civilian aircraft consumed nearly 9%of the worlds oil,and this share was o

195、n an upward trajectory.Global aviation,driven by improving living standards,had tripled in the first two decades of the century.This growth pattern established a clear link between GDP expansion,the number of travellers,and flight frequency.We forecast that by 2050,global passenger flights will reac

196、h 10.4 billion annually(Figure 1.8),marking a 140%surge from pre-pandemic levels.The most robust growth is anticipated in Greater China,followed by South East Asia.Despite the setback caused by COVID-19,which significantly curtailed air travel,passenger trip growth persists.While the impact on leisu

197、re travel was clearly temporary,the transformation in business travel patterns is set to continue.The pandemic introduced enduring changes in work dynamics that will lead to a 20%reduction in business travel throughout our forecast period.Enhancements in aircraft and engine technology,refined routes

198、,improved operational strategies,and incremental gains in load factors and aircraft size will contribute to ongoing efficiency improvements,quantified as energy usage per passenger-TRANSPORT IN TRANSITIONSee article on DHL Express a front-runner with SAF,on page 53 in our Transport in Transition rep

199、ort.Download20DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDincluding fleet and ship optimization,wind-assisted propulsion,on-board CCS,energy efficiency enhancements,and a substantial transition to low-and zero-carbon fuels lik

200、e gas and ammonia will be used in the process of achieving the strategy.The potential for electrification in maritime remains limited to shore power during docking and short-sea shipping due to the constrained energy density of batteries for deep-sea voyages.In a world where GDP doubles by 2050,the

201、demand for cargo transportation will outweigh efficiency gains.Consequently,cargo tonne-miles are projected to rise across most ship categories(Figure 1.10),with a total growth of 40%from 2022 to 2050.MaritimeMaritime transport is currently the most energy-efficient transportation in terms of energy

202、 per tonne-kilometre,and more than 80%of globally traded goods are transported by sea(UNCTAD,2021).At present,ships account for nearly 3%of global final energy demand,and 7%of global oil consumption,primarily for international cargo shipping.In its most significant update since 2018,the Internationa

203、l Maritime Organization(IMO)revisited its GHG strategy adopting the 2023 IMO Strategy on Reduction of GHG Emissions from Ships and fortified its objectives aimed at decreasing emissions from maritime transportation.The updated GHG strategy encompasses levels of ambition that align with the overarchi

204、ng objective of diminishing emissions in the shipping sector,and which include amongst others:“Striving to achieve net-zero emissions from inter-national maritime operations by approximately 2050(considering diverse national circumstances)and pursuing endeavours towards their eventual elimination,in

205、 line with the long-term temper-ature objective delineated in Article 2 of the Paris Agreement.”Aside from reaffirming its latest levels of ambition,the IMOs new strategy outlines tentative milestones for 2030 and 2040.DNV analysis suggests(DNV,2023b)that a blend of decarbonization measures,regulato

206、ry and consumer-driven dynamics.Notable examples encompass initiatives like the ReFuelEU initiative,aviation within the Fit for 55 legislative package,augmented carbon pricing following the removal of aviations free allowances in the future EU emissions-trading system(EU ETS)(EC,2023a),and individua

207、l willingness to invest in sustainable aviation.When employed as an aviation fuel,pure hydrogen presents certain advantages over SAF.Derived from renewable sources,a hydrogen value chain in aviation holds the potential for nearly emission-free transport,with careful management of resulting by-produc

208、ts(water vapour and NOx emissions).Nonetheless,hydrogen faces technical limitations due to its low energy density.The substantial hydrogen storage needed would necessitate a fundamentally different aircraft design,likely resulting in higher passenger costs.Moreover,the implementation of new designs

209、requires a minimum of 20 years due to aircrafts extended operational life.Synchronizing aircraft design alterations and infrastructure adjustments,as well as revising handling and safety regulations,must coincide with technology advancements.Given the significant barriers impeding the widespread ado

210、ption of pure hydrogen in aviation before the mid-century mark,its share of the subsectors energy demand is projected to remain relatively modest,at approximately 4%by 2050.Bio-based SAF has already made strides at a small scale due to mandatory biofuel blend rates in some countries.It is expected t

211、o experience rapid scalability due to regulatory impetus and consumer demand.Consequently,SAF is poised to be primarily comprised of biofuels in the near to medium term,reaching a 22%share of the fuel mix by mid-century.While the abundant production of sustainable biofuel poses challenges,aviations

212、greater capacity to pay,and limited decarbonization alternatives,make it a viable choice.During the 2030s,the adoption of e-fuels based on hydrogen will gradually increase,with significant uptake anticipated in the 2040s.Nonetheless,liquid SAFs derived from renewable sources or biogenic origins offe

213、r a more fitting avenue for aviation decarbonization.These fuels are well-suited as drop-in options,seamlessly integrating with existing infrastructure and combustion technology.Weighing the different advantages of hydrogen and e-fuels against each other,we will see three times more e-fuels a 12%sha

214、re in the mix than pure hydrogen in the aviation subsector.This predomi-nance of e-fuels is attributed to their versatile appli-cation across various flight types,in contrast to pure hydrogen,which is limited mainly to medium-haul flights.Despite this shift,oil will continue to be the primary aviati

215、on fuel source,retaining a 60%share in 2050 with a 21%increase in usage compared to present levels.Notably,the efficiency gains and gradual fuel mix transformation we forecast positions aviation to outperform the(currently under revision)goals of the Carbon Offsetting and Reduction Scheme for Intern

216、ational Aviation(CORSIA)for the partial decarbonization of aviation through to 2050.21DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDand supply dictate that any imbalances are resolved by transporting excess resources from surplu

217、s regions to deficit regions.Moreover,significant maritime transportation of fossil fuels takes place within individual regions.Similarly,the movement of raw materials and finished goods occurs both within and,notably,between regions.Fuel mixThe view on the maritime sectors ability to decar-bonize h

218、as progressed rapidly over the last five years,pushed by the IMOs decarbonization strategy intro-duced 2018 and revised in 2023.A shift in mindset within the sector towards shouldering its part of the net-zero challenge is evident,and will help to drive While some categories,such as gas carriers,wil

219、l experience growth,efficiency improvements and global trade pattern changes will lead to reduc-tions in most segments.As a result,coal transport is expected to halve by 2050,and crude oil and oil products transport will decrease by 20%.It must be noted that in the coming years,transport on keel wil

220、l become more expensive due to an increasing share of low-emission fuels in the maritime fuel mix.This might impact established transport routes in cases where domestic production might have an advantage over higher-priced transportation.Global cargo shipping is a fundamental aspect of our analysis.

221、The regional dynamics of fossil-fuel demand a significant change in fuel composition over the coming decades.Shifting away from its predomi-nantly oil-based fuel mix today,the composition by 2050 will mainly encompass low-and/or zero-carbon fuels(84%).Among the low-and zero-carbon fuels,ammonia is p

222、rojected to command the largest share(36%),followed by biofuel at 25%and e-fuels at 19%.The role of electricity,as previously discussed,is anticipated to be minimal at 4%.This extensive shift in fuel types will be bolstered by region-specific decarbonization initiatives.However,the fuel switch in ma

223、ritime industry depends on many factors such as advanced biofuel availability and sufficient availability of renewable hydrogen for e-fuel production.Those uncertainty factors are captured in DNVs 2022 version of the Maritime Forecast to 2050(DNV,2022c)where 24 scenarios for the maritime sectors fut

224、ure fuel mix are outlined.Based on the updated IMO strategy and a push from both charterers and regulators such as the EU,our our main ETO 2023 has a more decarbonized fuel mix than last years forecast.Nevertheless,this forecast acknowl-edges that the IMO ambitions lack enforcement mech-anisms and m

225、ight not be fully met,as the ambitions have yet to be translated to ship-specific regulations.Our fuel mix forecast for maritime illustrated in Figure 1.11 is a result of our best estimate assessment and not the result of a cost competition-based model output.This implies that our view on the mariti

226、me fuel mix to 2050 holds significant uncertainties,partly described above and more fully detailed in DNVs Maritime Forecast to 2050.Maiden voyage and arrival at Copenhagen for namegiving of Laura Maersk,the worlds first methanol fuel-enabled container ship.Image,courtesy A.P.Mller Mrsk A/S.Our Mari

227、time Forecast to 2050 provides valuable insights to empower information-based decision making for all maritime stakeholders on their decarbonization journey.22DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDtransport,particularly

228、in urban areas,boasts superior space efficiency compared to other modes.Its suitability for electrification further positions it as an attractive choice for transport decarbonization.The increasing speed and competitiveness of high-speed trains vis-vis aviation,driven by decarbonization goals,also c

229、ontribute to rails expansion.Significant passenger growth is forecasted in the Indian Subcon-tinent and Greater China,propelled by rising living standards and robust public policy support for rail development.As depicted in Figure 1.12,nearly all passenger rail growth is expected to be concentrated

230、in these two regions,with the Indian Subcontinent projecting a 57%share of global rail passenger transport in 2050 and Greater China contributing 27%.RailThis subsector encompasses rail-based transportation,including urban rail systems.In 2022,rail accounted for just under 2%of global transport ener

231、gy demand,approximately 0.5%of total global energy demand.By 2050,global passenger numbers are expected to more than double(+140%),resulting in a surge of rail travel to 9.9 trillion passenger-kilometres.Rail freight transport is projected to grow by 90%by mid-century,with substantial regional dispa

232、rities.Notably,Greater China anticipates doubling rail freight demand over the next three decades,while Europes equivalent demand remains stable.Rail In regions other than Europe,where rail freight has historically thrived,increased rail freight volumes are spurred by GDP growth and transportation s

233、ector decarbonization strategies.Despite the remarkable surge in road-freight demand in Europe,the potential for further rail-freight expansion is limited due to congested tracks,enhanced road networks,and prioritization of passenger rail.Energy-efficiency advancements will primarily revolve around

234、electrification,complemented by efficiency gains in diesel-powered units.Figure 1.13 illustrates our projection that ongoing electrification trends will be maintained to meet rail transport demand,resulting in a 2050 fuel mix comprising 54%electricity(up from 41%today),41%diesel,and 5%biofuel.While

235、hydrogen holds potential to replace diesel on non-electrified rail,a large-scale adoption of gaseous energy carriers like hydrogen is not foreseen due to factors such as pulling power limitations for rail freight,the need for governmental support,and inadequate hydrogen refuelling infrastructure alo

236、ng main rail routes together with a strong competition for renewable hydrogen stemming from uptake in other(transport)sectors.23DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDIn 2022,28%of the worlds total final energy and nearly

237、 50%of global electricity was consumed in buildings.About three-quarters(92 EJ)of this final energy demand was in residential buildings,and the rest(33 EJ)in commercial buildings including private and public workspaces,hotels,hospitals,schools,and other non-residential buildings.Total CO2 emissions

238、from this sector amounts to 3 GtCO2,about 8%of total energy-related CO2 emissions.As the global population continues to increase and standards of living rise across the world,we will see a continuation of the historical growth in energy services provided in the buildings sector.However,the associate

239、d energy consumption will not increase at the same speed thanks to energy efficiency improvements,driven by higher efficiency standards,continued decline in the costs of energy-efficient technologies,and improvements in the building stock.For example,heat pump technology enables heat provision with

240、an efficiency above 300%(the ratio between useful heating energy provided over the electricity used).Figure 1.14 shows devel-opments in useful and final energy demand for four different end uses in buildings.As a general pattern,note the starkly different growth rate in the two bars representing use

241、ful and final energy.While useful energy demand(demand for energy services)keeps Despite increasing electrification and improvements in the efficiency of thermal insulation and heating/cooling equipment,global energy demand for buildings is set to grow nearly 30%over the next three decades,from 125

242、EJ per year in 2022 to 161 EJ per year in 2050.The sectors share in final energy demand is also expected to grow from 28%now to 33%by mid-century.This is mainly driven by an increase in population and therefore in floor area demand,as well as a rise in per capita incomes leading to growing demand fo

243、r space cooling and other electric appliances.Global warming further intensifies the demand for cooling.1.2 BUILDINGS 24DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDcommercial buildings in five selected regions.The share of com

244、mercial buildings is expected to grow in all these regions because of GDP growth outpacing population growth.This is most visible in fast-growing regions such as Greater China and the Indian Subcontinent,where GDP will be growing much faster than population.By 2050,Greater Chinas total floor area of

245、 buildings will be about 105,000 km2,which is equal to the current(2022)floor area across all four of the regions shown in the figure.It is perhaps not surprising then that buildings in Greater China will continue to consume nearly one-fifth of global buildings energy use.Space coolingWe estimate th

246、at space cooling accounted for only 6%of the energy demand of the buildings sector in 2022 but predict an increase to 17%by 2050,split roughly 70:30 between residential and commercial buildings,respectively,by 2050.Energy demand for cooling will grow from 7.7 EJ per year in 2022 to 27.5 EJ per year

247、in 2050.With anthropogenic emissions driving global warming,heat-related weather events are becoming more frequent and space cooling is becoming critical for adaptation.This also has energy and climate-justice dimensions to it since the countries and regions least responsible for this warming are go

248、ing to be most affected by it(Sharples,2023).Thus,in the future,living spaces and most indoor work in regions close to the equator will become unbearable without space cooling,which will be particularly needed by the infirm,elderly,and children.Building stockThe floor area of the building stock is o

249、ne of the most important drivers of energy demand in buildings,since energy consumption in key end uses,such as space heating and cooling,scale with floor area.In 2022,the total global floor area of residential and commercial buildings covered 257,000 km,just above the size of the UK.The floor area

250、of residential buildings is expected to grow globally by nearly 50%through to 2050,while commercial floor area will more than double in line with the growth in economic activity.This will result in a 58%expansion of combined residential/commercial floor area.Figure 1.16 shows forecast developments i

251、n the shares of residential and growing rapidly for all end uses,final energy demand does not grow as quickly(and drops in the case of space heating),as a result of improving efficiencies in equipment.This is most visible in space cooling which,despite the decoupling between useful and final energy

252、demand,is still expected to be the most important source of growth in energy demand from buildings over the next three decades.Figure 1.15 shows developments in buildings final energy demand by energy carrier.The most salient feature of the graph has to do with electricity taking an increasingly lar

253、ger share in the mix,up from 34%in 2022 to 52%in 2050.This reflects the growing dominance of more efficient electric appliances in buildings,most importantly heat pumps.The growing share for electricity mostly comes out of the shares of natural gas and biomass with the former reducing from 29%in 202

254、2 to 23%in 2050,and the latter from 23%to 15%over the same period.In the 2030s,we will start to see hydrogen use for heating purposes in buildings rising to a modest 1.1%share in the energy mix by 2050.This will be mostly in the form of hydrogen blended into natural gas pipelines at first,transition

255、ing to some use of pure hydrogen as fuel further ahead.As outlined in more detail in DNVs Hydrogen Forecast to 2050(DNV,2022a),hydrogen use will be rather limited in buildings because it will be relatively expensive from a levelized cost perspective,losing out competitively to increasingly cost-effi

256、cient heat pumps.Appliances and lightingIn 2022,appliances and lighting used 27 EJ of energy,just over 20%of global buildings energy demand.We expect this demand to reach 43 EJ by 2050,with its share of global buildings energy demand rising to 27%.This projection takes into account significant expec

257、ted improvements in the energy efficiency of appliances and lighting,as well as a more intensive use of both.First postulated by Jevons(1865)in the context of the impact of blast-furnace efficiency of coal consumption,the Jevons Paradox asserts that efficiency gains will lead to a demand increase as

258、 savings from efficiencies will be used to consume more.This rebound effect has many examples,from cars to refrigerators,across various times and cultures.25DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMAND is driven primarily by f

259、loor area.Globally,demand for hot water will rise more than 60%from 11 EJ of useful heat in 2022 to 17.5 EJ in 2050.Regions with colder climates(North East Eurasia,North America,Europe,and Greater China)create most of the demand for space heating.For water heating,the regional differences are mostly

260、 driven by standard of living.In higher-income regions,increasingly efficient hot water tanks are used contin-uously to serve multiple needs,from daily showers to washing dishes.In some lower-income countries,water is heated as required for basic needs using inefficient methods.Space and water heati

261、ngSpace and water heating accounted for 32%and 18%,respectively,of the buildings sectors total energy consumption in 2022.With increasing population and floor area,demand for space heating will continue to grow,rising 12%in terms of useful heat demand by 2050.Improvements in insulation,and fewer hea

262、ting degree-days(a measure of how cold the temperature is on a given day or during a period of days)due to climate change,will help reduce the rate of this growth.GDP per capita is the main driver of demand per person for water heating in residential buildings.The water heating demand of commercial

263、buildings about 27%of total final energy used for water heating Among our ETO regions,those with the highest future economic growth are also most vulnerable to heat-related climate events,such as the Indian Subcontinent,Latin America,and South East Asia.This is reflected as regional variations in th

264、e growth of cooling energy demand driven mostly by increases in cooling degree-days(CDD),and in air conditioner penetration due to rising income levels.CDD is the cumulative positive difference between daily average outdoor temperature and reference indoor temper-ature of 21.1C.North America present

265、ly accounts for half of global electricity demand for cooling.However,in 2050,about 31%of cooling demand will be from Greater China,and only 13%from North America.Europes electricity consumption for cooling will double between 2022 and 2050(Figure 1.17).Those regions with the fastest economic growth

266、 also happen to be those that demand the most cooling,measured in CDD.Currently,four regions have CDD above 1,000 Celsius degree-days per year:the Indian Subcontinent,the Middle East and North Africa,South East Asia,and Sub-Saharan Africa.Collectively,their economic output is expected to triple by 2

267、050.The result would be a seven-fold increase in electricity consumption associated with space cooling for these regions(Figure 1.17).By mid-century almost half of all energy consumed for cooling will be in these regions with high CDD.26DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPO

268、LICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDhigher return on investment,heat pumps constitute most of the market even though cold temperatures mean a lower seasonal coefficient of performance.The move away from traditional biomass stoves for water heating is another big driver of efficien

269、cy improvements.Although consuming 26%of the final energy used globally for water heating in 2022,tradi-tional biomass only provided 7%of the useful energy.Increased energy access will reduce the final energy represented by traditional biomass to 18%by 2050,resulting in savings of 1.8 EJ per year.Fi

270、gure 1.19 shows developments in the global energy mix for space and water heating in buildings,and pumps in all regions.This cost reduction is expected to vary between 17%and 26%by region.Globally,heat pumps will provide about a third of the useful heat for space heating in 2050 while consuming only

271、 13%of the total final energy demand for space heating.In Europe,based on statistics from the European Heat Pump Association,around 3 million units of heat pumps were sold in 2022,increasing the total number of heat pumps installed in the region to 20 million.We forecast that heat pumps will maintai

272、n between 40%to 60%market share in space heating capacity additions through to 2050.In some local markets,like Norway,where cheaper electricity prices reduce operating costs and long winters ensure a Average efficiency of heating equipment is defined as the ratio of useful energy provided to final e

273、nergy demand.This efficiency varies widely between tech-nologies,from less than 10%for traditional open wood-burning to more than 300%for heat pumps.Heat pumps extract more energy in the form of heat from the air or earth than the energy they consume in the form of electricity.Figure 1.18 shows deve

274、lop-ments in the share of heat pumps in providing useful heat and in final energy use.It also tracks the impact of these developments in technology uptake on the overall efficiency of space and water heating.By 2050,heat pumps will provide 32%of total useful energy for space heating and 22%for water

275、 heating,while using only 13%and 5%of final energy,respectively.Thanks mainly to the expected transition from less efficient technologies such as gas or biomass boilers to heat pumps for space and water heating and because of gradual efficiency improvements in technologies we see average efficiency

276、rising from 0.9 in 2020 to 1.2 in 2050 for space heating,and from 0.5 to 0.75 for water heating.The increased uptake of heat pumps is a result of the reduction in their cost,helped by cost-learning feedback loops where the cumulative installed capacity of the technology brings down production costs.

277、Costs vary between regions,but with a global learning rate of 15%,we expect to see a reduction by mid-century in the levelized cost of heating by heat 27DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDCooking energy demand is an i

278、mportant driver of gender inequality and productivity loss,especially in regions with no access to clean cooking fuels.accounting for a quarter of such demand,and 6.4%of total final energy demand.More importantly,the onus for cooking and sourcing the energy for it in regions such as Sub-Saharan Afri

279、ca and the Indian Subcontinent traditionally falls on women and girls.Thus,coupled with the high prevalence of traditional biomass stoves,IEA(2023a)estimates that house-holds without access to clean cooking fuels spend five hours per day collecting fuel and cooking.Most of this time is spent by wome

280、n and girls,which affects their opportunities for development,access to education,employment,and income(and frequently all four).Therefore,cooking energy is an important driver of gender inequality and productivity loss if there is no access to clean cooking fuels.total final energy demand for each

281、end use.As a result of the above developments,final energy demand for water heating will stay stable in the range of 2324 EJ/yr from 2022 to 2050,with a slight shift from residential to commercial buildings(due to higher growth in global GDP than in world population).Final annual energy demand for s

282、pace heating will fall from 40 EJ to 35 EJ per year in the same period with further implementation of insulation and retrofitting measures,and as the use of efficient electric heat pumps spreads.In terms of the energy mix in space heating,the share of natural gas shrinks,giving way to electricity.In

283、 water heating,besides some increase in electrification,use of traditional biomass gives way to natural gas to some extent.CookingCooking energy demand is expected to grow 15%from 27 EJ in 2022 to 31 EJ by 2050.We estimate that in 2022,42%of cooking energy demand is met by traditional biomass stoves

284、 burning fuels such as animal waste,charcoal,and wood.This represents a quarter of the global population,the majority of whom live in Sub-Saharan Africa and the Indian Subcontinent.By 2050,traditional biomass stoves will supply only 30%of cooking energy,following replacement primarily by electric an

285、d modern biomass stoves(Figure 1.20).Cooking is an often-overlooked component of energy demand in buildings despite today 28DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDEnergy efficiency in buildings is an often under-utilized

286、or hidden energy source.Energy efficiency generally consists of efficiency due to the building stock and to the equipment and/or technology,such as efficiency of lighting fixtures.Building stock efficiency is often a function of the building envelope and the insulation provided by the thermal proper

287、ties of the materials used in a building.Energy efficiency of the building stock may also be impacted by building design,such as placement of windows,shading materials,window awnings,and so on.Building efficiencies determine the overall space heating and cooling loads of buildings.In our forecast,bu

288、ilding thermal characteristics(BTC)are influenced by the building code standards and the improvement in BTC due to retrofitting of buildings.There are push and pull forces at play that determine the dynamics of change of BTC at a regional level.Pushing better BTC are the building codes and standards

289、 set by organizations with jurisdictions over localities,countries,or supra-national entities such as the EU,which are applicable to both existing and new residential and commercial buildings.Similarly,the EU also mandates retrofit targets for buildings stock,aiming to increase the efficiency and/or

290、 reduce the specific energy demands of buildings.Pulling towards better thermal insulation and building energy efficiency are financial incentives available such as tax credits through the US Inflation Reduction Act,mainly for households to improve their energy efficiency(IRS,2023).In our ETO,specif

291、ic heating and cooling energy demand,given as energy demand per year and per square metre are impacted not only by climate and prosperity,but also by the change in BTC through insulation improvement and retrofitting.We estimate how much of the old and new building stock will improve its BTC through

292、retrofitting on a regional basis,and how much better BTC of new buildings are for each region.Combined,these two improvements reduce the specific heating and cooling energy demand of the overall building stock.Figure 1.21 shows show the dynamics of change of residential specific heating demand of Gr

293、eater China and residential specific cooling demand of the Indian Subcontinent,with and without improve-ments to overall BTC.In the case of the Indian Subcontinent,improvements in BTC reduce the specific cooling demand by 20%in 2050,which is a considerable saving in terms of energy demand.Similarly,

294、in Greater China,the difference between specific heating demand with and without improve-ments in BTC is 18%in 2050.But more importantly,such improvements can dampen the peak in specific heating demand,thus bending the curve of overall energy demand for space heating.Energy efficiency through insula

295、tion,retrofitting,and building thermal characteristics Adding insulation to the walls of a home.Photo by Werner Slocum,NREL 7223629DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDFigure 1.22 shows the sectors energy mix today is d

296、ominated by fossil fuels,in particular coal and natural gas,which together supply more than half of its final energy.Their combined share will progressively decline in favour of direct electrification,hydrogen,and bioenergy,but the high heat often required poses a problem for using decarbonized alte

297、rnatives.This Manufacturing in a tense worldGlobal geopolitical tensions have recently cast the spotlight on the dominance of certain regions,espe-cially Greater China,in the global supply of essential technologies for the energy transition.Some of the deindustrialization trends that were observed i

298、n the last decades will be stopped and even reversed in some regions,though it will not lead to dramatic changes in energy demand.As highlighted in Figure 1.23,energy demand within the different groups of regions will progressively converge towards 2050.Different dynamics will be at play:Greater Chi

299、na is a global manufacturing hub supporting domestic needs and export industries.The explosion of energy demand in the last two decades has been supported by a boom in construction of buildings and infrastructure,with steel and cement production representing half Chinas manufacturing demand today,an

300、d around a quarter of the countrys total energy demand.Demand for these products will decline as construction slows down,but the inertia of newly installed and planned capacity additions will keep China at a very high level of demand.OECD regions(North America,Europe,and OECD Pacific)have historical

301、ly seen manufacturings share in their economies decline,with services dominant.Reshoring of energy-intensive industries in the base materials and manufactured goods subsectors will halt the slow decline of related energy demand.Decarbonization will also be a key feature,with manufacturing CO2 emissi

302、ons halving by 2050.is why the iron and steel,chemicals,and cement production industries are often described as hard-to-abate,as they cannot easily be decarbonized through electrification.Additionally,the overwhelming majority of new installations still rely on fossil fuel-based tech-nologies.As the

303、se plants are capital-intensive,long-term investments,there will be only moderate changes in the fuel mix during our forecast period.Coal will remain the largest energy carrier,driven by persistent use in Greater China and the Indian Subcontinent which,together,will still represent two-thirds of dem

304、and by mid-century.This should not,however,minimize some forecasted progress in decreasing the sectors dependence on fossil fuels.For instance,low-and medium-heat needs will increasingly be supplied by industrial heat pumps(see factbox page 32).Hydrogen will also be used for heating and as a reducin

305、g agent,meeting 6%of energy demand by the end of our forecast period.There will be huge regional differences in its share of the mix,from 1%in the Indian Subcontinent up to 20%in Europe.Medium-income regions(Latin America,the Middle East and North Africa,North East Eurasia,South East Asia)will see m

306、anufacturing continue to expand,mostly to support their growing economies.Conse-quently,energy demand will steadily increase by 0.6%/yr on average through 2050.Lower-income regions(Sub-Saharan Africa and the Indian Subcontinent)will see the most spec-tacular developments,as both GDP and population i

307、ncreases will lead to fast-developing manufacturing capacity in all subsectors.Although not as dramatic as the past transition in China,energy demand will still increase 2.5-fold by 2050.Manufacturing is currently the largest energy consumer at 138 EJ(31%)of final energy demand in 2022.Despite subst

308、antial energy-efficiency gains and increased recycling and reuse of materials and goods,the sectors energy demand will keep growing.It will increase an average of 0.5%every year,reaching 156 EJ by 2050.1.3 MANUFACTURING 30DNV Energy Transition Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSRE

309、GIONSAPPENDIXELECTRICITYRENEWABLESDEMANDManufactured goodsIncludes production of general consumer goods;food and tobacco;electronics,appliances,and machinery;textiles and leather;and vehicles and transport equipment.As economies grow,the demand for finished goods experiences a similar rise.Despite e

310、fficiency improvements,this expected growth in demand will lead to a 46%increase in related energy demand by 2050.The subsectors great diversity is reflected in its energy use and fuel mix.Fossil fuels meet half its energy demand now,but their share will progressively decline as electricity,bioenerg

311、y,and hydrogen to a lesser extent,become attractive options to fuel the usually low-or medium-temperature industrial processes.Around 50%of todays energy demand for the subsector is concentrated in three regions:Greater China and the Indian Subcontinent.These regions will continue to dominate,but th

312、e Indian Subcontinent will progressively take over Chinas leading position to represent more than a third of the subsectors energy demand by 2050.Chemicals and petrochemicalsIncludes the manufacture of plastics and other petrochemicals,including ammonia and methanol used as feedstock.The subsectors

313、energy demand is expected to grow by about 20%between 2022 and the mid-2030s,then slowly decrease until 2050.The variation of energy demand is mostly attributed to demand for virgin plastics.This demand is initially expected to continue increasing exponentially but will become progressively attenuat

314、ed by higher recycling rates in all regions(see Section 1.5 for more details).Energy and non-energy uses are for the most part intertwined in todays industrial processes.Future processes like green ammonia production or electrified steam cracking will progressively decouple these two distinct uses i

315、n the subsector.However,long-life,multi-billion-dollar petrochemical sites operate on a fragile equilibrium.Heat recovery is well-developed,and excess heat or by-products from some processes often fuel others.Retrofitting options are consequently limited,as are potential energy-efficiency gains.This

316、 leads us to expect a slow transition in the energy mix,slow uptake of hydrogen for energy,and slow electrification.Iron and steelSteel production has doubled in the past two decades,due mainly to infrastructure and industrial developments in China;we forecast it will increase 15%by the mid-2030s,an

317、d then plateau.The Electric Arc Furnace(EAF)methods share in global steel production will progres-sively increase from 26%in 2020 to 49%in 2050,driven by reduced demand for steel and an increasing quantity of scrap steel becoming available.Consequently,energy demand for steelmaking will plateau afte

318、r 2030.Coal use will progressively decrease but will still meet more than half the subsectors energy demand by then.Indeed,steel will play a key role in sustaining demand for coal through to mid-century.The subsector accounted for a sixth of global demand for coal in 2022.As coal demand declines slo

319、wer than in other sectors,steel will represent a third of that demand in 2050.The increased share of EAF will lead to a 58%increase in electricity demand for steelmaking.A drive towards green steel and direct reduced iron(DRI)will also increase the subsectors use of hydrogen for energy,from practica

320、lly zero today to 9%of its fuel mix by 2050.Base materialsIncludes the production of non-metallic minerals(excluding cement);non-ferrous materials,including aluminium;and wood and its products,including paper,pulp,and print.These energy-intensive industries produce materials(e.g.lithium,aluminium)fo

321、r which demand will continue to grow in the coming decades,supported by the energy transition.Energy demand will as such grow by a sixth(17%)by 2050.The fuel mix will be progressively decarbonized,both because of emission targets and a shift to materials for which production processes are well-suite

322、d for electrification.Electricity demand will thus increase by a third by 2050.The subsector also currently represents 5%of global bioenergy demand,mostly for the pulp and paper industry.Bioenergy demand is expected to slightly increase,as demand for these products remains strong.31DNV Energy Transi

323、tion Outlook 2023CONTENTSFINANCEFOSSIL FUELSPOLICYEMISSIONSREGIONSAPPENDIXELECTRICITYRENEWABLESDEMANDCementCement production has more than doubled from 1.7 billion tonnes in 2000 to 4.1 billion tonnes in 2022.Global production will increase only slightly in the future,to 5 billion tonnes in 2050,as

324、production in China slows and other regions such as the Indian Subcontinent step in.Hydrogen and electrification are expected to play limited roles,due to high-temperature requirements and the necessity of abating the process emissions of cement regardless of the energy mix.The fuel mix will remain

325、highly carbon-intensive,and decarboni-zation goals will be covered with carbon capture and storage.Construction and miningConstruction(of roads,buildings,and infrastructure)and mining is the smallest of the ETO manufacturing subsectors.However,it will see the largest relative increase in energy use,

326、growing 50%by 2050.The growth is especially pronounced in regions that will see rapid economic growth,including Sub-Saharan Africa(+260%),the Indian Subcontinent(+180%),and South East Asia(+70%).Demand for fossil fuels will remain constant over our forecast period,while electricity and hydrogen will

327、 cover the additional needs,and represent half of demand by 2050.Industrial heat pumpsManufacturing processes consume signif-icant amounts of process heat.Industrial heat currently represents about two-thirds of manufacturing energy demand,largely supplied by fossil fuels.As for space heating(see Se

328、ction 1.2),heat pumps,with efficiencies above 100%,are an attractive solution for providing decarbonized industrial heat.Heat pump efficiency is largely dependent on the temperature difference between the source and the sink.Consequently,a larger temperature difference leads to a lower efficiency.It

329、 is challenging to reach high temperatures if air is the heat source,like in space heating applications.But industrial processes often have significant amounts of low-grade waste heat,which can instead be utilized as a heat source to improve efficiencies.Process streams that need cooling are even be

330、tter heat sources,as they can further improve the overall system efficiency.As illustrated in Figure 1.24,process heating applications up to 100C can be covered by mature heat pump technol-ogies.Europe and Japan are leading the way in technology development,building on their well-established industr

331、ial heat pump industries to expand to high-temperature heat pumps.High-temperature heat pump applications are currently made available only as pilots and small-scale industrial demonstrations,with specific investment costs between USD 200/kW and USD 1600/kW,capacities ranging from 30 kW to 70 MW,and

332、 the ability to supply heat at maximum temper-atures up to 280C.High-temperature heat pumps are expected to progressively be made fully commercially available and used between 2024 and 2027(HPC,2023).While the investment cost is seen as a barrier for heat pump uptake,the costs will be reduced with m

333、ore deployment in the future.Additionally,strategies such as sector coupling,heat-as-a-service,and flexibility services will improve the business case for industrial heat pumps and accel-erate the deployment(WBCSD,2022).Heat pumps will be competitive in regions where the electricity to gas price ratios are lowest.In the European market,both electrification and energy efficiency are key drivers for