IEEJ：September 2020 © IEEJ2020

Energy Technology Perspectives 2020
Dr. Timur Gül, Head Energy Technology Policy Division, IEA
Japan, 30 September 2020

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What do net-zero ambitions mean for energy technology?
•A growing number of governments & companies are making ambitious pledges to reach net-zeroemissions in coming decades. But achieving those goals & ensuring energy security is a big challenge.

•Major progress has been made: the rise of solar PV, wind and batteries has significantly reduced thecosts of renewable electricity and electric cars.

•But transitioning the energy system to net-zero emissions requires broader technology efforts in three
critical areas:•Existing assets in power generation and industry•Clean energy technology & innovation•Infrastructure that enables rapid technology deployment

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GtCO2 /yr

Our existing energy infrastructure is too big to ignore
40

Rail

35
30

Other
Buildings
Buildings

25

TrucksTransport

20
15

Aviation
ShippingCars
Other Industry
ChemicalsIndustry
CementEmerging Asia
Steel

10

Other Power

5CoalPowerPower
Restof the world0
2019

2/3 wheelers
Buses

2030

2040

2050

Reaching net-zero emissions requires tackling emissions from long-lived assets in power generation and heavyindustries. In emerging Asia, 80% of existing coal power capacity was built in the past 20 years.
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Many industry assets are still young – iron and steel productionYears

Age profile of steelmaking from iron ore
Typical lifetime

40Russia blast
furnaces

30

Middle East
DRI furnaces

20Japan blastfurnaces

China blast
furnacesAsia PacificRussia & Central Asia
Middle East
AfricaEuropeCentral andSouth America

10North America00

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200

400

600

800

1000

1200

1400
Capacity (Mt hot metal)

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Many industry assets are still young – cement productionYears

Age profile of cement kilns
Typical lifetime

40

Asia Pacific
30

Japan

Middle East

Middle East
India

China

20

Russia & Central Asia

AfricaEuropeCentral andSouth America

10North America
00500

1000

1500

2000

2500

3000

3500
Capacity (Mt clinker)

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Many industry assets are still young – chemicals productionYears

Age profile of primary chemicals production facilities
Typical lifetime

30
25

ChinaIndia

20Middle East

15

China

Asia PacificRussia & Central Asia
Middle EastAfrica

Middle East

Europe10Central andSouth America

5North America

00

100

200

300

400

500

600
Capacity (Mt primary chemical)

China’s middling-to-young production capacity accounts for upwards of 50% of the global total in key industrial subsectors. India and the Middle East are also key regions.
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Focusing on the power sector is not enough to reach climate goals
Global CO2 emissions reductions in the Sustainable Development Scenario, relative to baseline trends

GtCO2/yr2019
0-10-20

-30

2030

2040

2050

2060

2070

Measures
Avoided demand
Other fuel shifts
Power generation
Technology performance
Renewables
Electric cars
Airplanes, ships, trucks,
Electrification
buses, etc.
HydrogenIndustry
Bioenergy
CCUSBuildings & otherNet-zero emissions-40

Clean energy technology progress in the power sector and with electric cars is encouraging, but alone not sufficientto reach climate goals. A broad portfolio of technologies will be needed for a transition to net-zero emissions.
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The role of CCUS extends across the global energy system
Net-zero2020
emissions
Synthetic fuels(CO₂ use)

Coal power

Direct air capture
Chemicals Coal power
ChemicalsSteel

Gas power

Hydrogen

Steel

Biomass power
CementNatural gas processing
Biofuels and otherfuel processing

Hydrogen

CCUS can support emissions reductions in power generation, hydrogen production, heavy industry and transport.
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Four strategic roles for CCUS
1. Tackling emissions fromexisting infrastructure

2. A platform for low-carbonhydrogen production
MtH2/yr

MtCO₂

1 000

800

600
Electrolysers

500

Fossil fuels with CCUS
400600

Other

300
400
Industry
Retrofits
200

200

Retrofits
Power
Retrofits

010002030

Net-zero
20192070

CCUS enables the continued operation of power and industrial plants – many of which have only recently been built
It is a low-cost option for low-carbon hydrogen production in many regions
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Four strategic roles for CCUSCement
Material
efficiency

4. Removing carbon fromthe atmosphere
GtCO₂/year

3. A solution for the most challengingemissions
3Long distance transport
2Heavy Industry
1

Other demand
Supply0-1

CCUS

Net zero carbon balance
Bioenergy with CCS-2Other**Hydrogen, bioenergy, electrification, and fuel shifts-3

Direct air capture

CCUS plays an indispensable role in heavy industry, particularly cement
Bioenergy with CCS and direct air capture can balance hard-to-abate emissions for net zero
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Hydrogen – a key pillar for reaching energy & climate goals

MtH2/yr

Global hydrogen production and use by sector in the Sustainable Development Scenario, 2019-2070
600
Ammonia production
Electrolysers
500

Synfuel production

400

Other Refining
Transport

300

Other
Fossil with CCUS

200

Transport
Industry

100

Fossilwithout CCUS
Refining

0
2019

2030

2040

2050

2060

2070

Global hydrogen production and use grows sevenfold by 2070 compared to today in the Sustainable Development
Scenario, with demand growth almost completely met by low-carbon hydrogen.
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Opportunities to reduce clean hydrogen production costs

USD/kgH₂Hydrogen production costs by technology in the Sustainable Development Scenario, 2019 and 2050
864202019
SMR with CCS

2019

2050
Electrolysis

Low-carbon hydrogen production through electrolysis is not currently competitive with that based on fossil fuels, but
could become competitive in the long term as large-scale deployment brings down costs.
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Clean energy technology progress hinges on innovation
Cumulative emissions reductions by technology maturity relative to baseline trends
Net zero emissions
emissions byby 2070
2050
Net-zero

Heavy industry & long-distance transport
Small prototype/lab
Large prototype

MatureMatureLarge prototype

Early adoption

Demonstration

Demonstration

Early adoption
Demonstration

In the Faster Innovation Case, almost half of the emissions reductions for reaching net-zero by 2050 rely ontechnologies that are not yet commercial today. The share is higher in heavy industry & long-distance transport..
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Net zero requires a major push to build clean energy infrastructure
Selected indicators to reach net-zero emissions by 2050 through technology
Renewable capacity additions

Electrolyser capacity additions

800

100electrolyser
The largest

solar park

400

GW/year

GW/year

600

75

every
50

every

2 days200

25

Northern-Lights CCS plant

2050
2019

in operationhour

MtCO2/year

300
The largest

0Additional CO2 captured

225

150

75

1
Northern-Lights
projectevery

In operation:0 Fukushima, Japan02050
Net-zero emissions
2019 by 2070
Bhadla solar complex,
India emissions
2019
2019
2050 by 2070
Net-zeroweek

Reaching net-zero emissions by 2050 would require a rollout of clean energy technologies & enabling infrastructureat unprecedented scale. Significant changes to consumer behaviour can moderate – but not eliminate – the needs.
IEA 2020. All rights reserved. || Credit
Credit(picture):
Northern
LightsClimate
project Investment
website, https://northernlightsccs.com/en/aboutphoto(Bhadla
solar park):
Funds, 2018

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Net zero requires a major push to build clean energy infrastructure
Selected indicators to reach net-zero emissions by 2050 through technology
Renewable capacity additions

Electrolyser capacity additions
100

600

300
The largest

electrolyser
75

in operation
today

every

400

50

The largesthour

MtCO2/year

GW/year

GW/year

800

Additional CO2 captured

225

150

solar park
200

025

every

2050
2019

2 days75

1
Northern-Lights
project

every
02050
Net-zero emissions
2019 by 2070
2019

0week

2019
2050 by 2070
Net-zero emissions

Reaching net-zero emissions by 2050 would require a roll out of clean energy technologies & enabling infrastructureat unprecedented scale. Significant changes to consumer behaviour can moderate – but not eliminate – the needs.
IEA 2020. All rights reserved. | Credit photo (Bhadla solar park): Climate Investment Funds, 2018

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Governments will need to play the decisive role
Markets are vital for mobilising capital and catalysing innovation, but they will not deliver net-zeroemissions on their own. Effective policy toolkits must address five core areas:
1.

Tackle emissions from existing assets

2.

Strengthen markets for technologies at an early stage of adoption

3.

Develop and upgrade infrastructure that enables technology deployment

4.

Boost support for research, development and demonstration

5.

Expand international technology collaboration

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Contact: report@tky.ieej.or.jp
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