Originally published on Forbes.com on September 3, 2021

This week DNV made a live presentation of their Energy Transition Outlook 2021. This offered a forecast of things to come from an independent and reliable company. Oil and gas readers can get a better feel for the global role of government policy, the rate of changeover from fossil power plants to renewables, future oil and gas supplies, and liquid hydrogen.

DNV, based in Norway, is engaged in safeguarding life, property and the environment. DNV is committed to the safety and sustainability of business organizations. They provide classification and technical assurance along with software and independent expert advisory services to the maritime, oil and gas, and energy industries. 

Below are several highlights of the two-hour program. To hit the high points efficiently, I have not included full attributions, as they can be found in the reports.

Energy policy is key. To illustrate, China is a leading investor in the transition, even up to buying scarce metals needed for solar and battery construction.

Norway’s goal is to reduce emissions of greenhouse gases (GHG) 50-55% by 2030, and to decarbonize fossil fuels. They have a culture of innovation that leads in shipping, offshore wind power, and carbon capture and storage (CCS). The country has successfully incentivized electric vehicles (EVs) so that 60% of new vehicles sold are EVs.

Global warming needs collaboration between countries, since it’s a worldwide problem, but there is a short window for action. Norway will support vulnerable countries but notes that 12 out of 20 countries that are most vulnerable to global warming are engaged in violent military conflict.  So climate change security is important.

DNV president Remi Eriksen said Norway is a model for the European Green Deal and is seeking partnerships with other countries. One of the biggest challenges is that rules and regulations are overwhelming and need to be uniformized between countries.

Figure 1. Source CDNV 2021.

DNV’s prediction (Figure 1) is that for 5 years there will be no improvement in the ratio of fossil vs renewable energies. But after this, GHG will fall by 9% by 2030 and by 45% in 2050. But the GHG emissions by 2050 will be close to 20 Giga-tons per year (Gt/yr) and a long way from true-zero emissions – and too far for carbon capture storage (CCS) to bury the “leftovers” underground and get the world to net-zero.

On the positive side. 25% of global electricity is now renewable and is growing at a good clip: transport is a big factor in this. Wind and solar are forecast to be almost equal by 2050 (Figure 2). Coal just about exits by 2050, but gas-fired power plants are a stayer and still at 22% by 2050.

Figure 2. Source CDNV 2021.

Future oil and gas supplies. Globally, oil and coal supplies are forecast to fall steadily after 2025 (Figure 3). But natural gas is the one fossil fuel that remains fairly constant through 2050. This adds credence to the concept of natural gas as a halfway house between fossil and renewable energies.

But in 2050, 85% of the gas is not decarbonized. The remaining fraction of 15% consists of biomethane and natural gas supply with CCS to offset the carbon.

Figure 3. Source CDNV 2021.

Personal energy efficiency. This may be an “unsung hero” as DNV projects 133 GJ/person in Europe in 2019 will fall to 95 GJ/person by 2050. This is a 29% dropoff, and more government mandates would accelerate this.

Hard-to-abate sectors. These are shown in Figure 4 and by far the worst is industrial heat. Examples are steel and cement manufacturing. Although total GHG emissions will have fallen by 45% between 2019 and 2050, the hard-to-abate sectors will be almost half of all remaining emissions.

Figure 4. Source CDNV 2021.

Liquid hydrogen. This will only be 5% of all energies by 2050, mostly because it will come to the marketplace too late. Hydrogen is expensive now, and it will take until 2033 to equal the price of solar and wind in 2010-2015. Prices fall of course but if 2020 is a reference marker, it will take until 2045 for hydrogen to reach the price in 2020. It seems a case of too little too late.

The DNV president ended by emphasizing that, after all the progress achieved, to meet the Paris goal of 1.5C temperature rise would require speeding up of electrification by renewables­­, and accelerating hydrogen production.

More Forbes articles written by Ian.