DNV GL Energy Transition Outlook 2019. (Psst…Passive House Can Help.)

October 09, 2019

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Given the drumbeat of grim environmental news and political chaos we’re going through right now, it’s easy to forget that a clean energy revolution—one that includes buildings—is underway and gathering steam. When we do remember that this revolution is underway, trying to estimate its potential to avert climate catastrophe is head-spinning.

If you focus on global policy commitments alone, a future of 3°C warming—even 4°C warming—by 2100 can seem inevitable. As we learned from last fall’s IPCC special report, that level of warming would be catastrophic.

But we know that global policy commitments are not the only force at work in the transition to a zero carbon future. Powerful technological and economic forces (plummeting cost of renewables, batteries, EVs, etc.) are also at work. The potential for these forces to drive the clean energy transition are often underestimated by policymakers, in large part thanks to the energy forecasts produced by the International Energy Agency (IEA). IEA forecasts have consistently and drastically underestimated the growth of renewables over the past two decades, as shown in the chart of solar energy deployment below.

The rate of solar photovoltaic deployment around the world keeps accelerating every year, yet IEA keeps forecasting flat growth or even decelerating growth. Source: Auke Hoekstra.

The rate of solar photovoltaic deployment around the world keeps accelerating every year, yet IEA keeps forecasting flat growth or even decelerating growth. Source: Auke Hoekstra.

If the IEA are the ones informing policymakers, and the IEA is so woefully blind to the soaring solar industry and the renewable energy revolution taking place under their collective noses, it’s no surprise that policymakers don’t understand what is already underway and what is possible.

That is why the alternative forecasts from Bloomberg New Energy Finance, Carbon Tracker Initiative, and DNV GL, are so important. All three organizations have significant research and analytical power, all three recognize the hurdles to the energy transition, and, perhaps most crucially, all three also understand the role that innovation, experience curves, and declining costs have on new technology uptake. Because renewable energy is a technology, not a fuel, reasonable forecasting of clean energy uptake requires this sort of insight—insight that the IEA has not demonstrated.

DNV GL released its 2019 Energy Transition Outlook just last month. This forecast assumes a continuation of current political, economic, and technological trends: limited policy reform plus the existing techno-economic momentum of the energy transition; no big tech breakthroughs, just the powerful accumulation of incremental improvements over time; no major policy changes or political revolutions; no significant carbon capture. It is what happens if we do not take an aggressive stand in favor of a clean energy revolution and instead let current policy and energy economic conditions play out.

The good news: DNV GL predicts a rapid energy transition under these conditions.

The bad news: The transition will not be fast enough. Current trends will result in 2.4°C warming by 2100.

According to the IPCC, 2.4°C of warming means “very high risks of severe impacts”, so that is not a future we want. And don’t be fooled; while 2.4° seems close to 2°, it will not be easy to close that gap, let alone keep warming to 1.5°C. Nevertheless, the DNV GL forecast does tell us that we absolutely have a fighting chance.

We just need to act with real urgency to deploy the solutions that are already at hand.

DNV GL forecast of energy-related emissions, assuming no big tech or political breakthroughs.

DNV GL forecast of energy-related emissions, assuming no big tech or political breakthroughs.

According to DNV GL, we need to move hard and fast on three fronts:

  1. Reducing energy use by improving energy efficiency.
  2. Advancing decarbonization through things like renewable energy.
  3. Capturing carbon emissions.

What does this mean for buildings? The DNV GL report cites building energy, building electrification, building retrofitting, heat-pump technology, and stringent building codes as critically important levers to help close the gap from 2.4°C to 2°C. The report emphasizes that closing the gap to 1.5°C will require an order of magnitude more effort than settling for 2°C.

A proven and cost-effective way to make this kind of “order of magnitude” progress in the building sector is to build and retrofit to all-electric, Passive House buildings constructed from low-embodied carbon and carbon sequestering materials. We need to implement and share these solutions so they can help accelerate the transition.

DNV GL also says that the technology is already available to limit warming to 1.5°C, and that the clean energy economy that results will have lower energy costs than a fossil-fuel dependent one would have. The same is true of Passive House zero carbon building; the technology to reach the goal is readily available, and energy costs will be dramatically lower.

So, let’s build that future, okay?

Author

Zachary Semke
Zachary Semke
Zack Semke is Director of Passive House Accelerator, VP of Marketing with Zola Windows, and owner of Semke Studio, a marketing consultancy…

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