The Path to Drawdown: Solar, Wind, Hydro and Nuclear
Addressing climate change and remaining below 1.5ºC of global warming means that the world’s electricity source needs to switch from fossil fuels to 100% emissions-free sources by 2050. Solar, wind, hydroelectric, and nuclear power are the electricity sources leading this transition.
Photovoltaic (PV) solar panels are the main way of capturing the sun's energy and converting it into electricity. The industry has been growing fast and solar panels are now the cheapest source of electricity in most places in the world as of 2020.
Solar produces ~2% of global electricity today. According to Project Drawdown, to be on track to remain under 1.5ºC of warming, utility scale solar will have to generate a combined ~26% of global electricity by 2050.
To get there, the PV solar industry needs to keep scaling over the few next decades:
- <::marker> 720 TWh of solar electricity generated in 2019
- <::marker> 28,200 TWh needed by 2050
- <::marker> CAGR of 12.56% from 2019 - 2050
Analysis from the IEA similarly forecasts that, to reach a 100% clean electricity grid by 2050, annual solar panel manufacturing capacity will need to scale from 134 GWs in 2020 to 630 GWs in 2030 (p. 74).
Onshore wind turbines account for 4.36% of global electricity generation in 2020.
Global wind capacity has risen steadily by around 20% per year for the past decade. Thanks to this expansion, the cost of electricity generated from onshore wind continues to fall, even in areas with low wind speeds.
According to Project Drawdown, to be on a path to remain under 1.5C° of warming, onshore wind turbines will need to be generating a combined 26.85% of global electricity by 2050.
To get there, the onshore wind industry will need to continue to scale over the next few decades
- <::marker> 1,150 TWh of onshore wind electricity generated in 2018
- <::marker> 19,460 TWh needed by 2050
- <::marker> CAGR of 9.38% from 2019 - 2050
The IEA forecasts (p. 74) that, to reach a 100% clean electricity grid by 2050, annual onshore wind capacity additions will have to increase from 109 GWs in 2020 to 310 GWs in 2030.
Hydropower electricity generation accounts for 44.5% of global electricity Next to solar and wind, hydropower is the third-largest (p. 45) energy source in the clean electricity mix.
According to the IEA, hydropower capacity additions need to accelerate significantly to reach the Sustainable Development Scenario level.
- <::marker> 4,333 TWh of hydropower electricity generated in 2019
- <::marker> 5,722 TWh needed by 2030
- <::marker> CAGR of 2.82% from 2019-2030
Nuclear power’s share of global electricity generation today is 10.5%.
Extremely powerful and efficient in generating electricity, nuclear power has reduced CO2 emissions by over 60 gigatonnes over the last five decades -- equivalent to nearly 2 years’ worth of global energy-related emissions. Unlike solar and wind, electric generation from nuclear power is stable. The cost of building new plants is still very high, but once built, the energy is stable and relatively inexpensive. With Generation III reactors on the horizon, nuclear power is becoming safer, cheaper, and more efficient.
To be on a path to remain under 1.5C° of warming, nuclear power is expected to grow mildly in the next three decades:
- <::marker> 6,093 TWh of nuclear electricity generated in 2018
- <::marker> 6,245.3 TWh needed by 2050
- <::marker> CAGR of 0.08% from 2018-2050
Importance of Utility Companies
Electric utilities play a crucial role in the path to net-zero emissions. Through long-term power purchase agreements (PPAs) between renewable developers and utilities companies, renewable energy companies can rely on stable electricity buyers and secure project finance. Utility companies also often control electrical grids, which can be outfitted for the intermittency of solar and wind power generation. Accommodating variable renewable energy also requires large-scale energy storage, and utilities have the resources to build batteries at scale.
There are dozens of investor-owned utilities traded on the NYSE (such as Duke, NextEra, Dominion, Xcel, PG&E, etc.) and many of them are purchasing or developing renewable capacities to provide clean electricity to customers across large regions. We use a stringent criteria to determine which utilities are significantly contributing to the low-carbon energy transition.