Falling costs of electric vehicles and tech could halt worldwide growth in demand for oil and coal
A scenario taking into account the latest cost reduction projections for the green technologies, and countries' pledges to cut emissions, finds that solar and electric vehicles are "game-changers" which could leave fossil fuels stranded.
Polluting fuels could lose 10 per cent of market share to solar power and clean cars within a decade, the report by the Grantham Institute at Imperial College London and the Carbon Tracker Initiative found.
A 10 per cent loss of market share was enough to cause the collapse of the coal mining industry in the US, while Europe's five major utilities lost £85 billion (€100 billion) between 2008 and 2013 because they did not prepare for an 8 per cent increase in renewables, the report said.
Big energy companies are seriously underestimating the low-carbon transition by sticking to their "business as usual" scenarios which expect continued growth of fossil fuels, and could see their assets "stranded", the study claims.
Electric vehicles and solar power are game-changers that the fossil fuel industry consistently underestimates
Luke Sassams – Carbon Tracker
Emerging technology, such as printable solar photovoltaics which generate electricity, could bring down costs and boost take-up even more than currently predicted.
Luke Sassams, senior researcher at Carbon Tracker, said: "Electric vehicles and solar power are game-changers that the fossil fuel industry consistently underestimates.
"Further innovation could make our scenarios look conservative in five years' time, in which case the demand misread by companies will have been amplified even more."
Polluting fuels could lose 10 per cent of market share to solar power
James Leaton, head of research at Carbon Tracker, added: "There are a number of low-carbon technologies about to achieve critical mass decades before some companies expect."
The cost of solar has fallen 85 per cent in seven years, and the report finds panels could supply 23 per cent of global power generation by 2040 and 29 per cent by 2050, entirely phasing coal out and leaving natural gas with just a 1 per cent share.
By 2035, electric vehicles could make up 35 per cent of the road transport market, and two-thirds by 2050, when it could displace 25 million barrels of oil per day.
By 2035, electric vehicles could make up 35 per cent of the road transport market
Tesla Model 3 in pictures
Mon, January 30, 2017
The Tesla Model 3, which is set to be released in 2018, in pictures.
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Tesla Model 3
Under such a scenario, coal and oil demand could peak in 2020, while the growth in gas demand could be curtailed.
It could also limit global temperature rises to between 2.4C and 2.7C above pre-industrial levels, while more ambitious action by countries than currently pledged, along with falling costs of solar and electric vehicles, could limit warming to 2.1C to 2.3C.
But the report shows cutting carbon from the power sector and road transport may not be enough to achieve international climate targets, so emissions reductions from other sectors such as heating buildings and heavy industry will also be needed.