TotalEnergies has modelled a new energy transition scenario that calls for new oil investments through to 2030, while still limiting the global average temperature rise to 1.5 degrees Celsius by 2050.
The International Energy Agency (IEA) is the most-cited benchmark when it comes to modelling the energy transition, with much made of its Net Zero Emissions (NZE) 2050 model which stated no new oil and gas fields must be developed for global warming to be contained.
TotalEnergies’ just-published Energy Outlook 2022 report — now in its fourth iteration — has re-examined its core Momentum and Rupture scenarios of the global energy scene to develop its Rupture+ model that accounts for the huge dislocation in the energy market caused by Russia’s invasion of Ukraine in February.
Chief executive Patrick Pouyanne said: “Current energy markets disruptions have reinforced the necessity of dialogue on a global basis about the energy transition, involving worldwide participation of all actors of the society.
“With this document — in line with our climate ambition to get to net zero by 2050 and our ongoing transformation into a multi-energy company putting the sustainable development goals at the core of our strategy — TotalEnergies intends to share its knowledge of the global energy system in order to contribute to decisions that will foster the energy transition and help to tackle climate change.”
One of the report’s key conclusions is that the transition will require increased spending on a new low-carbon energy system, while also maintaining the existing system.
“The current decade is decisive. Investment in low-carbon power must double to 2030 to reach $1.5 trillion per year, while investment in new oil and gas developments is required until at least the mid-2030s to satisfy customer demand, even in a well below 2 degrees C scenario.”
The company’s Momentum scenario is based on the decarbonisation strategies of countries which have pledged to achieve net zero by 2050, as well as the nationally determined contributions of other countries.
In addition to the US, Europe, Japan and South Korea, Momentum incorporates new Net Zero 2050 pledges from Australia, Singapore, Taiwan and the United Arab Emirates.
However, even these pledges will result in a 2.1 degree to 2.3 degree Celsius temperature increase by 2100 in TotalEnergies’ model.
The Rupture scenario, meanwhile, aims to keep the temperature rise to 1.7 degrees Celsius by 2050 and involves widespread dissemination of decarbonisation drivers to all emerging economies and building a low carbon energy system at a global scale, gradually transitioning from the existing one.
“It will not happen without richer countries supporting emerging ones by promoting a just energy transition with a funding at least at the level forecast in the Paris agreement [$100 billion per year from 2020],” the French supermajor warned.
The Rupture+ model extends all the levers used in the updated Rupture scenario to every country in the world and manages to limit the temperature rise to 1.5 degrees Celsius.
While oil demand in 2050 is comparable to the IEA’s NZE 2050 model, the Rupture+ trajectory to reach this target is different because “new oil projects are still needed until the mid-2030s to meet demand and avoid price spikes”.
Some of the report’s key findings are that the short-term trajectory of global energy demand is “not going in the right direction” in terms of the energy transition due to increased coal use driven by post-Covid market recoveries and current market disruptions.
High energy prices have put energy efficiency at the top of the energy policy agenda in many OECD countries, according to the report, adding that the current crisis is an opportunity to increase and anchor energy-saving and energy-efficiency measures that are fundamental to reaching the Paris agreement objectives.
In the OECD, it noted that electrification of end-user demand due to clean power is a structural evolution that helps reduce emissions and increase energy efficiency, with the biggest impacts in road transport and industry.
The report stressed that in Africa the switch away from traditional biomass to modern energy is core to increasing energy efficiency, while providing affordable energy access, better living standards and economic development to growing populations.
Renewables, it said, are experiencing a higher and faster market penetration as energy security becomes a key concern for many countries, while highlighting that natural gas will maintain a key role in the energy transition to ensure baseload power at the same time as replacing coal.
“Gas will become greener over time and its growth is accompanied by carbon capture and methane emissions control solutions,” the report argued.
TotalEnergies said hydrogen and sustainable liquid fuels based on e-fuels are promising decarbonisation drivers, but they will not scale up before 2030, so demand for renewable diesel and biogas are expected to rise.
At scale, hydrogen and hydrogen-based fuels will increase demand for clean power and carbon-abated natural gas by more than 10% by 2050, the report predicts.
The report also identified the need for massive investments in R&D to develop the technologies to power the new energy system.
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