100% Renewable Energy Transition by 2050 — both possible and affordable

In an era of accelerating climate change, environmental degradation is proving to be an existential threat to Europe and the world at large. As such, the EU is further strengthening the momentum of the global energy transformation from fossil fuels to renewable energy.

To overcome these major challenges, Europe will need to implement a growth strategy that will transform the Union into a modern, resource-efficient, and competitive economy.

Luckily, the rapid decline in renewable energy costs, improved energy efficiency, widespread electrification, increasingly “smart” technologies, continual technological breakthroughs and well-informed policymaking are contributing positively to this shift, bringing a 100% renewable energy future within reach by 2030–2050.

In order to create this extraordinary future for humanity, a future that is fairer, healthier, more robust, and prosperous than any that have gone before, investors and decision-makers across government, business, and civil society need to be more proactive in their actions and policies.

The energy system requires rapid, immediate, and sustained change, and reaching this target will require action by all sectors of our economy, including:

• investing in environmentally-friendly technologies like SunContract’s Global Energy Marketplace, AI-based technologies as well as Machine Learning
• supporting the industry through policies, and thus enabling them to innovate
• rolling out cleaner, cheaper and healthier forms of private and public transport
• decarbonizing the energy sector
• ensuring buildings are more energy efficient
• working with international partners to improve global environmental stands

Fortunately, the path to a 100% renewables-powered energy society is also a path of opportunity, as it would enable faster growth, create more jobs, create cleaner cities and improve overall societal welfare.

In economic terms, this reduction of human health costs, as well as environmental costs, would bring annual savings by 2050 up to five times the additional annual cost of the transition to renewable energy (IRENA). As a result, the global economy in 2050 would be larger, with nearly 40 million jobs directly related to renewables and efficiency.

Timely action would also avoid stranding over USD 11 trillion worth of energy-infrastructure assets that are tied to today’s polluting energy technologies — ensuring that a new, creation-based production system emerges before the old extraction-based system collapses.

What this means for us as a sector, is that we must therefore begin to create conditions in which a “New Organizing System” can emerge, one that is able to understand and manage the new creation-based production system.

And as successive, technological developments aim to disrupt existing inefficient systems, the knee-jerk response will give nations that have been previously gridlocked by polarisation, the power and ability to take decisive action. The new system will see a vast reduction in the flow of physical goods and materials through the economy. This will dramatically reduce working capital requirements as physical flows are replaced by capital-free information flows. Likewise, development costs will plunge and, in many cases, they could be largely open-source.

Digitalization — paramount to the success of the energy transition

In the energy sector, digital technologies are now more than ever before, being used to communicate and analyze data of the flow of power. The data can be used to monitor, control and optimize electricity distribution and balance supply and demand. A key challenge in the global energy transition is the management of intermittent renewable power. Weather-dependent solar and wind-based power plants and installations will increasingly replace conventional power plants and take up a bigger share of the power mix to be delivered in central and decentralized energy grids.

Digital technologies like ours at SunContract will be essential for matching supply and demand while being independent to the highest possible degree of other conventional power sources such as coal or nuclear. Renewable power systems depend on the sun, wind, biomass, cogeneration, etc., and cannot be conveniently switched on/off on short notice depending on demand — which is the case for conventional coal plants. Digital technologies can therefore be used to predict electricity demand patterns and allow information exchange between power suppliers and renewable generators, EVs, households, and industrial buildings in order to optimally coordinate when electricity should come from renewables and when excess electricity is needed from alternative conventional power plants such as nuclear plants.

Distributed - solar, wind & storage will win

Renewable energy production infrastructure, combined with energy storage, blockchain, and AI will enable a new energy system that is distributed, with demand predictively managed to match supply. Energy will be generated mainly through renewables whose total cost — for example for solar PV — is already below the marginal cost of fossil fuel and nuclear electricity.

Distributed energy generation combined with distributed energy storage will replace the centralized electric power system, as localized production eventually costs less than the transmission and distribution costs of a centralized energy system. Existing fossil-fuel plants will see their utilization rates drop as zero marginal-cost solar, wind, and energy storage power grows, effectively used only to cover ever-shrinking gaps in demand. Within a few years, as the economics of these conventional plants deteriorate further, they will essentially be stranded, so we may need to selectively and temporarily subsidize some of them while the accelerating build-out of new clean energy infrastructure catches up with demand.

A ripple effect on other markets…

As the virtuous cycle of clean disruption gains momentum, fossil fuels and fossil-fuel technologies will enter a vicious cycle that will also affect the heating market. The fossil fuel industry’s diminished scale will make the heat more expensive, leading companies to replace it with cheaper, more predictable solar and battery technologies, leading to further erosion of fossil fuel markets, leading to more expensive industrial and space heat, leading companies and consumers to drop fossil- fuel heat altogether.

The transportation industry will also be disrupted in myriad ways. Shared vehicle models will rapidly replace the model of individual car ownership and with it the combustion engine. Electric vehicles (trucks, vans, buses, and cars) can drive half a million miles (soon to be one million) as opposed to around 140,000 miles for ICE vehicles. This means fleets will also have to go electric because the per-mile cost of EVs is one-third (soon to be one-sixth) of the cost of ICE transportation in high-utilization models. Companies like Amazon and FedEx will have no choice but to quickly replace their whole fleets with electric trucks and vans for purely economic reasons.

As human drivers are replaced, congestion will ease and the possibility of integrating other electric forms of transport (scooters, drones, and bikes) will emerge. Together, these disruptions will deliver a transportation system 10x cheaper and far more efficient than the one it replaces.

As the speed of transport improves in congested areas, this new system will create possibilities to change where we live and work, transforming the layout of cities and towns. Its impact will ripple out across trains, logistics, aviation, oil, climate change, and geopolitics. Just like the ICE car did 100 years before them, new modes of transportation will restructure culture, entertainment, and commerce.

The extraordinary improvements in the costs and capabilities of modern renewable energy technologies mean that energy sector disruptions are inevitable. Driven by powerful feedback mechanisms, this sector, and all others related will be transformed through the 2020s and into the 2030s at a speed and scale that almost no present-day analysis predicts. Together, they represent a new system of production that could ultimately deliver a new age — the Age of New Energy and the Age of Freedom.

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