Electrification of everything
The investment opportunity in renewable power generation on the path to net zero emissions by 2070 totals almost $30 trillion. That includes $11.1 trillion for solar photovoltaics, $9.5 trillion for onshore wind, and $6.6 trillion for offshore wind power. The report also sees investment of $4 trillion for nuclear power.
The task here is not simply to eliminate the carbon emissions from the power generation that’s needed today, according to Goldman Sachs Research. Power demand is going to rise as various sectors — such as road transport, heating of buildings, and industrial manufacturing — rely on electrification to reduce their carbon footprint. The report sees power generation increasing threefold from 2023 levels in order to reach global net zero by 2070. “Power generation is the most vital component for any net zero scenario,” Della Vigna writes.
Tackling industrial emissions
While renewable power and the electrification of transport attract much more attention, industrial emissions are the second-largest contributor to global carbon emissions. They present difficult reduction challenges.
In steelmaking, for example, which relies today on coal-fired blast furnaces, the report highlights how fuel switching and process innovation will be needed. “Over the past few years, we have seen a number of innovative alternative clean steel production processes being developed, primarily focusing on the increasing use of electricity and clean hydrogen,” Della Vigna says.
Cement production is another difficult challenge. In addition to the energy needed for the intense heat in cement kilns, the chemical process that turns limestone into cement releases carbon directly. For this reason, the report finds that carbon capture technologies are likely the most promising avenue for decarbonization of this vital global building material.
Goldman Sachs Research finds that the path to net zero emissions will likely rely on four key technologies: renewable energy, clean hydrogen, battery energy storage, and finally, carbon capture. The first of these is well-established and has benefited from a declining cost curve. But the world must move from a one-dimensional decarbonization approach based on renewables to a “multi-dimensional ecosystem” that incorporates all these technologies.
“Our path consistent with net zero by 2070 calls for an evolution of the de-carbonization process from one-dimensional (renewable power) to a multi-dimensional ecosystem” along those four important dimensions, Della Vigna says.
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Source: goldmansachs.com
