Energy Technology Perspectives 2020

ETP 2020

About this report

Energy Technology Perspectives 2020 is a major new IEA publication focused on the technology needs and opportunities for reaching international climate and sustainable energy goals. This flagship report offers vital analysis and advice on the clean energy technologies the world needs to meet net-zero emissions objectives.

The report’s comprehensive analysis maps out the technologies needed to tackle emissions in all parts of the energy sector, including areas where technology progress is still lacking such as long-distance transport and heavy industries. It shows the amount of emissions reductions that are required from electrification, hydrogen, bioenergy and carbon capture, utilisation and storage. It also provides an assessment of emissions from existing infrastructure and what can be done to address them.
Executive Summary

Achieving our energy and climate goals demands a dramatic scaling up of clean energy technologies

To avoid the worst consequences of climate change, the global energy system must rapidly reduce its emissions. Calls to reduce global greenhouse gas emissions are growing louder every year, but emissions remain at unsustainably high levels. International climate goals call for emissions to peak as soon as possible and then decline rapidly to reach net-zero in the second half of this century. The vast majority of global CO2 emissions come from the energy sector, making clear the need for a cleaner energy system. Global CO2 emissions are set to fall in 2020 because of the Covid-19 crisis, but without structural changes to the energy system, this decline will be only temporary.  

Achieving net-zero emissions requires a radical transformation in the way we supply, transform and use energy. The rapid growth of wind, solar and electric cars has shown the potential of new clean energy technologies to bring down emissions. Net-zero emissions will require these technologies to be deployed on a far greater scale, in tandem with the development and massive rollout of many other clean energy solutions that are currently at an earlier stage of development, such as numerous applications of hydrogen and carbon capture. The IEA’s Sustainable Development Scenario – a roadmap for meeting international climate and energy goals – brings the global energy system to net-zero emissions by 2070, incorporating aspects of behavioural change alongside a profound transformation in energy system technology and infrastructure.  

This report analyses over 800 technology options to examine what would need to happen for the world to reach net-zero emissions by 2050. The report focuses primarily on the Sustainable Development Scenario, but it also includes a complementary Faster Innovation Case that explores the technology implications of reaching net-zero emissions globally by 2050. The analysis seeks to assess the challenges and opportunities associated with a rapid, clean energy transition. The report covers all areas of the energy system, from fuel transformation and power generation to aviation and steel production.

Transforming the power sector alone would only get the world one-third of the way to net-zero emissions

Many governments have ambitious plans for reducing emissions from the energy sector. Some governments have even put net-zero ambitions into law or proposed legislation, while others are discussing their own net-zero strategies. Many companies have also announced carbon-neutral targets. The success of renewable power technologies gives governments and businesses some cause for optimism. But reaching these targets will require devoting far more attention to the transport, industry and buildings sectors, which today account for more than 55% of CO2 emissions from the energy system.

Spreading the use of electricity into more parts of the economy is the single largest contributor to reaching net-zero emissions. In the Sustainable Development Scenario, final electricity demand more than doubles. This growth is driven by using electricity to power cars, buses and trucks; to produce recycled metals and provide heat for industry; and to supply the energy needed for heating, cooking and other appliances in buildings.

Reaching net-zero emissions in 2050 would require a much more rapid deployment of low-carbon power generation. In the Faster Innovation Case, electricity generation would be about 2.5 times higher in 2050 than it is today, requiring a rate of growth equivalent to adding the entire US power sector every three years. Annual additions of renewable electricity capacity, meanwhile, would need to average around four times the current record, which was reached in 2019.

Electricity cannot decarbonise entire economies alone

Hydrogen extends electricity’s reach. On top of the surging demand for electricity from across different parts of the economy, a large amount of additional generation is needed for low-carbon hydrogen. The global capacity of electrolysers, which produce hydrogen from water and electricity, expands to 3 300 GW in the Sustainable Development Scenario, from 0.2 GW today. In order to produce the low-carbon hydrogen required to reach net-zero emissions, these electrolysers would consume twice the amount of electricity the People’s Republic of China generates today. This hydrogen forms a bridge between the power sector and industries where the direct use of electricity would be challenging, such as in the production of steel from iron ore or fuelling large ships. 

Carbon capture and bioenergy play multifaceted roles. Capturing CO2 emissions in order to use them sustainably or store them (known as CCUS)1 is a crucial technology for reaching net-zero emissions. In the Sustainable Development Scenario, CCUS is employed in the production of synthetic lowcarbon fuels and to remove CO2 from the atmosphere. It is also vital for producing some of the low-carbon hydrogen that is needed to reach net-zero emissions, mostly in regions with low-cost natural gas resources and available CO2 storage. At the same time, the use of modern bioenergy triples from today’s levels. It is used to directly replace fossil fuels (e.g. biofuels for transport) or to offset emissions indirectly through its combined use with CCUS. 

A secure and sustainable energy system with net-zero emissions results in a new generation of major fuels. The security of today’s global energy system is underpinned in large part by mature global markets in three key fuels – coal, oil and natural gas – which together account for about 70% of global final energy demand. Electricity, hydrogen, synthetic fuels and bioenergy end up accounting for a similar share of demand in the Sustainable Development Scenario as fossil fuels do today.

The clean energy technologies we will need tomorrow hinge on innovation today

Quicker progress towards net-zero emissions will depend on faster innovation in electrification, hydrogen, bioenergy and CCUS. Just over one‑third of the cumulative emissions reductions in the Sustainable Development Scenario stem from technologies that are not commercially available today. In the Faster Innovation Case, this share rises to half. Thirty-five percent of the additional decarbonisation efforts in the Faster Innovation Case come from increased electrification, with around 25% coming from CCUS, around 20% from bioenergy, and around 5% from hydrogen.

Long-distance transport and heavy industry are home to the hardest emissions to reduce. Energy efficiency, material efficiency and avoided transportation demand (e.g. substituting personal car travel with walking or cycling) all play an important role in reducing emissions in long-distance transport and heavy industries. But nearly 60% of cumulative emissions reductions for these sectors in the Sustainable Development Scenario come from technologies that are only at demonstration and prototype stages today. Hydrogen and CCUS account for around half of cumulative emissions reductions in the steel, cement and chemicals sectors. In the trucking, shipping and aviation sectors, the use of alternative fuels – hydrogen, synthetic fuels and biofuels – ranges between 55% and 80%. Highly competitive global markets, the long lifetime of existing assets, and rapidly increasing demand in certain areas further complicate efforts to reduce emissions in these challenging sectors. Fortunately, the engineering skills and knowledge these sectors possess today are an excellent starting point for commercialising the technologies required for tackling these challenges.

Emissions from existing assets are a pivotal challenge

Power and heavy industry together account for about 60% of emissions today from existing energy infrastructure, climbing to nearly 100% in 2050 if no action is taken. Reaching net-zero will depend on how we manage the emissions challenge presented by these sectors’ long-lasting assets, many of which were recently built in Asian economies and could operate for decades to come. The situation underscores the need for hydrogen and CCUS technologies. Ensuring that new clean energy technologies are available in time for key investment decisions will be critical. In heavy industries, for example, strategically timed investments could help avoid around 40% of cumulative emissions from existing infrastructure in these sectors. 

CO2 emissions reductions in the sector in the Sustainable Development Scenario relative to the Stated Policies Scenario

Governments will need to play the decisive role

While markets are vital for mobilising capital and catalysing innovation, they will not deliver net-zero emissions on their own. Governments have an outsized role to play in supporting transitions towards net-zero emissions. Long-term visions need to be backed up by detailed clean energy strategies involving measures that are tailored to local infrastructure and technology needs. Effective policy toolkits must address five core areas:

  • Tackle emissions from existing assets
  • Strengthen markets for technologies at an early stage of adoption
  • Develop and upgrade infrastructure that enables technology deployment
  • Boost support for research, development and demonstration
  • Expand international technology collaboration.

Economic stimulus measures in response to the Covid-19 crisis offer a key opportunity to take urgent action that could boost the economy while supporting clean energy and climate goals, including in the five areas above.

  1. Our forthcoming ETP Special Report on CCUS provides our most in-depth look yet at this critical technology family and its role in reaching net-zero emissions.