50 experts and analysts forecast further directions of the energy transformation

Statkraft, the largest renewable energy producer in Europe with a presence in 21 countries globally, has released its annual “Low Emissions Scenario” report. This report examines the factors and consequences of the worldwide shift toward cleaner energy sources. Over the past year, the Norwegian company has been expanding its renewable energy portfolio in Poland, where it has acquired a collection of early-stage projects with a total capacity of roughly 500 MW.

Despite increasing geopolitical tensions and competition, the growth of renewable energy remains robust and is expected to continue without interruption or reversal. The costs of wind and solar power, as well as batteries and electric cars, have seen significant reductions over the past decade, making them viable replacements for fossil fuels. Energy security has become a prominent concern on the international stage, leading to greater political pressure for the development of renewable energy sources, according to Christian Rynning-Tønnesen, CEO of Statkraft.

The report, crafted by more than 50 experts and analysts, operates on the assumption that global energy transformation will persist, driven by markets, policies, and technological advancements. The Low Emissions Scenario presented in the report aligns with pathways aimed at keeping global warming below 2°C by curbing energy-related emissions.

The Low Emissions Scenario indicates that the world can effectively reduce emissions through widespread adoption of existing, competitive clean technologies, including solar and wind energy, the establishment of a sustainable energy grid, and the proliferation of electric vehicles. Achieving deep decarbonization, including substantial reductions in harmful emissions, even in challenging sectors, is feasible by 2050. This, however, requires a combination of political determination, technological progress, and well-functioning markets. Statkraft is committed to playing a leading role in propelling the transition towards a low-carbon future, as emphasized by Rynning-Tønnesen.

Two scenarios

While the prospects for renewable energy are promising, experts acknowledge the existence of uncertainties and risks that could potentially slow down the transition or increase its costs. Consequently, Statkraft has introduced two additional scenarios to assess how geopolitical tensions and regional rivalries might impact the pace and extent of the global energy transformation.

The “Clean Tech Rivalry” scenario envisions a capital-driven competition in clean energy supply chains among major global players such as the United States, the European Union, and China. In contrast, the “Delayed Transition” scenario suggests that challenges like high inflation, the rising cost of living, national security concerns, and social unrest could hinder the pace of climate action due to short-sighted perspectives.

Christian Rynning-Tønnesen emphasizes the importance of considering the choices made today and their potential consequences for the energy transition. Delays and conflicts could lead to substantial costs, making global cooperation and trade vital for a successful and profitable energy transition.

Among the various energy sources examined by experts, photovoltaics emerge as the frontrunner in each of the presented scenarios. The Low Emissions Scenario foresees a 22-fold increase in solar energy, equivalent to 22,000 TWh of electricity generated annually. Even in the least optimistic scenario, which accounts for delays caused by geopolitical conflicts and social unrest, wind and solar energy are expected to grow 6.5 times over the next thirty years.

In Poland, solar energy already constitutes more than half of the installed renewable energy capacity. Favorable technology and legal conditions enable further development in this field. Statkraft Poland is actively embracing this trend, having secured a portfolio of early-stage projects with a capacity of approximately 500 MW in the current year, thus surpassing its 2023 goal. They have ambitious plans to significantly increase this capacity in the coming years, aiming to create a well-balanced portfolio of 1 GW of advanced projects by the end of 2030, as highlighted by Michał Smyk, Country Manager of Statkraft in Poland.

Main findings of the report

The report presented by Statkraft serves as a valuable resource for decision-makers, investors, businesses, and consumers seeking to gain insights into the opportunities, challenges, and key directions of a low-emission future.

Michał Smyk underscores the significance of Statkraft’s annual report in raising awareness and promoting discussions about the transition to green energy. As a company committed to investing substantial resources in expanding global renewable energy assets, Statkraft aims to contribute to the dialogue surrounding the shift toward a more sustainable future.

The main findings of the report:

• Europe is a climate leader in every scenario, but to achieve short-term CO2 emissions targets, access to key elements of the supply chain and closer cooperation between regions are needed.
• 
  In the Low Emissions Scenario, energy-related emissions will decline by 69% by 2050  . compared to their current level, in line with the direction of limiting global warming to below 2°C. This is a slightly faster pace 
  and a greater change than assumed in last year’s report.
• Competitive clean technologies and energy security drive decarbonization in the Low Emissions Scenario. Solar energy is at the forefront here. The costs of wind and solar power, batteries and electric vehicles have fallen significantly over the past decade, making green technologies more economically attractive compared to their fossil-based counterparts. Additionally, recent market turmoil and increased geopolitical tensions have made energy security a high priority internationally, increasing political pressure on renewable energy and energy efficiency. In the Low Emissions Scenario, by 2050 solar energy is expected to increase 22 times, and wind energy – 12 times compared to their current level.
• Cost-optimal wind and solar power will replace fossil fuels in all three scenarios. Even in the least optimistic scenario, further development is expected in both segments by 2050. 

Full report: Low Emissions Scenario 2023 (statkraft.pl)

Source: statkraft.pl