Investments in wind and solar will need to reach $13 trillion over 30 years so as to reduce CO2 emissions by 64% in 2050 compared to current levels, according to a new report published this week by Dutch bank ING.
ING’s global economists and strategists department published its new report on Wednesday, which outlines the necessary investment for a 64% reduction in global energy-related CO2 emissions by 2050. The latest report follows on from a survey conducted by ING at the end of 2018 which asked whether technology could provide the answer to climate change. The resulting report claimed that technology could reduce energy-related CO2 emissions by 64% globally — close to the emissions reduction targets of 2050, but missing the 2030 targets.
To enable this technological revolution, ING’s new report claims that an estimated $13 trillion of investments in wind and solar will be needed over the next 30 years.
Specifically, ING’s scenario focuses on the substitution of oil, coal, and gas for wind and solar energy sources. “These are a crucial factor behind the reduction in CO2 emissions,” writes ING. “We believe the scenario is realistic as it factors in sensible implementation pathways of new technologies. It also does not include still highly uncertain technologies like nuclear fusion.”
The report also takes into account expected increases in energy demand over the coming decades, which is expected to more than double by 2050. Included in this is an expected increase in electricity consumption as new technologies that do not need fossil fuels rely more and more on clean electricity generation.
According to ING, fossil fuels currently account for two-thirds of the global power mix. However, in ING’s “Positive Tech” scenario, wind and solar can provide two-thirds of the globe’s electricity, each accounting for half of the total of 38,000 terawatt-hours (TWh) that is expected to be needed in 2050.
However, the report claims that to meet these demand needs, solar will need more capacity than wind, while onshore wind will not be as productive as offshore wind. “Since the sun does not always shine and the wind can be unpredictable, more capacity is needed to steadily produce 19,000 TWh each,” explains ING. “In other words, these two sources of energy are less efficient than oil and gas. For wind specifically, offshore is the most efficient as wind is abundant and relatively constant at open sea. On a global level, one gigawatt (GW) of offshore wind capacity generates about the same amount of power as one GW of a coal or gas-fired power plant. Twice as much capacity is needed for onshore wind farms as turbines on land are smaller than turbines at sea and onshore wind is less abundant.”
Solar, on the other hand, requires almost four times as much capacity to generate the same amount of power as gas and coal-fired power plants, according to ING, due to “the obvious problem that the sun does not shine at night and panels produce less power on cloudy days.” Thus, ING believes solar capacity needs to grow to an estimated 14,000 GW by 2050 to deliver its 19,000 TWh, while onshore wind will only need 4,700 GW and offshore around 1,200 GW to provide its 19,000 TWh share of global electricity generation.
The investment for this level of capacity increase is, unsurprisingly, staggering. ING believes an estimated investment of $13 trillion up to 2050 is necessary, with wind taking the lion’s share of that amount with $7.3 trillion. To put this into perspective, average annual investments in wind and solar will need to grow from around $200 billion globally in the next decade to around $500 billion annually between 2036 and 2050 — by which point investment in solar and wind would at some point exceed current investment levels in upstream oil and gas.