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What does our world look like in 2050? How can we transition to a clean and green energy system? And what’s the role of electricity, hydrogen and our behaviour in this changeover? This article explains Deloitte’s vision for the future of energy. Our visions are invitations for our clients and partners to join us in envisioning – and accordingly shaping – a pleasant planet.
The energy outlook of 2050 in a three-point nutshell:
The Netherlands has transitioned to a clean and green energy system. Our world-leading cheap offshore wind electricity, hydrogen produced from the North Sea and circular use of carbon gives us a strong competitive position.
Behavioural change – such as changes in diet, and less consumerism and travel – goes hand in hand with technological development.
Being climate-neutral in 2050 is both technically and economically feasible, but we must act now with a long-term vision so as to avoid duplicate investments.
Imagine a world where we have tackled the challenge of climate change. A world without noisy trucks on our roads. Where we eat lab-grown hamburgers, and industries are powered by cheap offshore wind electricity and green hydrogen. A world where air quality is great (read more about decarbonisation) and jobs in sustainable industries are plentiful.
We should do everything to accelerate and scale up the technologies necessary to build a green energy system
When it comes to energy transition, some see technological innovation as the answer, others advocate a radical change in behaviour. In fact, both are needed.
“We should do everything to accelerate and scale-up the technologies necessary to build a green energy system,” explains Oscar Kraan, manager at Deloitte with a PhD in energy transition scenarios.`
“But in many cases, technology will not suffice; not in the short term, anyway. Therefore, we also need to adapt our behaviour – change our diet, decrease consumerism, increase local experiences and adopt shared (electric) mobility.”
Oscar KraanManager - Future of Energy strategy
The Netherlands in 2050 is a global leader in green industry. This is enabled by cheap offshore wind electricity produced from our shallow-water North Sea and offshore green hydrogen production. Hydrogen is distributed via an international hydrogen network; while within the Netherlands, hydrogen is transported in repurposed gas grids, making the country a European centre of hydrogen distribution.
A new CO2 infrastructure connects carbon producers and users, enabling the reuse of carbon. We’re producing various products and chemicals based on green electricity, hydrogen, biomass and the circular use of carbon.
Carbon taxes have resulted in more local production facilities. Getting cheap products from other continents has become more expensive as the burden on our climate grows. However, it’ll take time before local production facilities have a competitive advantage over foreign rivals, says Oscar. “Over time, the economic system will balance the economic efficiency of global trade with regional environmental standards.”
The dominant means of transport for local journeys are now electric bikes and autonomous electric vehicles. All our cars and buses are electric, trucks run on either electricity or hydrogen, while trains that previously ran on diesel now run on hydrogen. Green hydrogen is enabling the decarbonisation of aeroplanes, either directly via combustion or in fuel cells or indirectly via the production of synthetic hydrocarbon fuels. Nonetheless, we have to fly less to stay within the planet’s environmental boundaries.
Read more about the 2050 Future of Mobility
What does the energy transition mean for our personal lives? Our homes are climate-neutral in 2050. All our houses have solar panels, are all-electric or connected to heat distribution networks, and possibly have hybrid hydrogen, electricity and biomass solutions.
Furthermore, we focus less on consumerism and more on sustainable and meaningful experiences. We eat less (or lab-grown) meat, and enjoy more locally grown, seasonal fruits and vegetables instead of fruits and vegetables from abroad.
2021: We must act now
How realistic are these scenarios for 2050? Being climate-neutral in 2050 is both technically and economically feasible. It’s a matter of putting words into action. The energy transition will cost us a few percent of our GDP. “Which is relatively low compared to our expenditures on, for example, health care,” says Oscar. “However, it’s still a significant investment. If you accumulate these costs from now to 2050, you come to an amount of 500 billion euros.”
This means we should act now: the longer we wait, the greater the financial and environmental burden will be for future generations. Moreover, not investing in the climate transition will result in higher costs to adapt to the consequences of climate change, such as building higher dykes, preparing cities for more extreme weather conditions, and the increased need for air conditioning in offices and homes. Balancing the interests of current and future generations will result in an optimised mix of mitigation and adaptation measures.
International alignment and collaboration
There’s international consensus about the objective to become climate-neutral by 2050. Now, the challenge is to make it all a reality. Governments, consumers, businesses and industry all have to take their responsibility and re-enforce each other to build a better future.
With this in mind, the government has an important function in enabling ‘green’ technological innovation and decarbonisation through subsidies and in creating an infrastructure for green energy, such as the hydrogen network and heat distribution networks, as well as infrastructures for CO2 and green mobility. And finally, it should facilitate the decarbonisation of developing nations by providing knowledge and assisting in technology deployment. Read more in our Climate Accord series.
Creating demand and staying competitive
Businesses face the challenge of decarbonising their industry, while staying competitive in a global market. This means that they have to run pilots and (co)invest in R&D. Collaborations with other companies, the Dutch government and the EU can help to accelerate this transition. Moreover, businesses should encourage demand in green products from their customers.
Over the past decade, wind and solar energy have become commercially viable, thanks to an inspiring combination of companies, governmental subsidies and societal support. Now, we see other climate technologies, such as hydrogen, on the verge of a breakthrough. “We are at an extremely exciting moment in the energy transition,” says Oscar. “There’s still a long way to go, but the solutions are in sight.”
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Eric VennixGlobal Future of Energy lead+31 (0)88 288 23 firstname.lastname@example.org
Some other articles and reports to trigger your thinking.
The role of hydrogen in the energy transition.
The importance of decarbonisation explained.
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