Last month, the International Energy Agency (IEA) released a report that highlighted the fact that most plans to reach net-zero carbon emissions by 2050 were not nearly aggressive enough to meet the stated goal.
Why does it matter?
The IEA makes it clear that the path to net-zero is a narrow one and requires immediate action by all nations. As for private companies, it notes that the path is one rich with opportunity for investment growth as the “radical transformation of the global energy system required to achieve net‐zero CO2 emissions in 2050 hinges on a big expansion in investment” as the global annual investment in energy grows on average from just over $2 trillion over the last five years to almost $5 trillion by 2030 and to $4.5 trillion by 2050.
What’s our view?
Worldwide, the IEA projects that energy usage will essentially stay flat between now and 2050, but that the mix of the energy generated will change dramatically. It calls for the complete phase-out of coal plants without carbon capture in advanced economies by 2030, and a complete phase-out of similar gas-fired plants by 2040. Based on the current fleet of U.S. electric generators, that goal will require a massive buildout of wind and solar farms far in excess of what has been done over the last five years, and continuing for a sustained twenty-year period. The massive wind farms proposed along the eastern shore of the U.S. would equate to about one-half of one year’s needed additions between now and 2030. Arbo is in the process of gathering data that is similar to what we currently have for pipeline projects, which would allow our users to monitor this buildout over the coming years.