Climate change is the defining challenge of our time. Since the beginning of the industrial age, global greenhouse gas emissions have skyrocketed, and despite profound and repeated warnings from science, as a global community we have not yet managed to break the trend of increasing emissions.
We have 10 years to halve global emissions if we want to keep global warming within 1.5°C above pre-industrial levels. To preserve our shared home, planet Earth, and enable our children and grandchildren to live and prosper in a world that offers the same conditions for life as they are today, we must act now.
Looking at the numbers, it is clear why we have a problem. Almost 75% of global emissions come from the use of energy, mainly due to the burning of fossil fuels for power, heat, cooling, transportation, and industrial processes. We have built our modern societies on fossil fuels, and to bring down emissions we need a new way of producing energy.
At Ørsted our vision is to create a world that runs entirely on green energy. In this paper we present our view on what it takes to speed up the transformation of the global energy system to limit global warming to 1.5°C.
The good news is that we already know the solution: green energy. Today, green power from solar and wind energy has already become cheaper than new-built coal, gas and nuclear plants. This is a breakthrough. Transforming from fossil fuels to green energy to stay within 1.5°C is no longer a question of technical feasibility or financial viability. It is about having the ambition and will to make the necessary decisions sooner rather than later.
The power system is crucial to driving out fossil fuels across all energy-consuming sectors. To stay within 1.5°C, the world will need to double the projected rate of green power build-out to 2030, and triple the projected retirement rate of coal-fired power plants. In addition, we need to increase the share of green electricity in the global energy system. Electricity currently only has a 20% share of all energy use, but this could increase to 50% in 2050 through intensified green electrification. Meanwhile, we need to keep global energy consumption in check by boosting energy efficiency.
Speeding up the green transformation of the global energy system is crucial to combatting climate change, but will also improve our quality of life in many other ways. We can save 4 million lives per year through improved air quality, countries can achieve greater energy independence, millions of new green jobs can be created, and more people can get access to electricity through locally harvested energy sources.
It is inherently difficult to predict the future, but we know the future we want for ourselves, our children, and coming generations. As Abraham Lincoln said: “The best way to predict the future is to create it yourself”.
That is what we are trying to do at Ørsted. Every decision we make, every day, must bring us one step closer to our vision of a world that runs entirely on green energy. Over the past decade, we have transformed our business from black to green energy. Since 2006, we have reduced our emissions by 83%, and by 2025 our energy production will be essentially carbon neutral. Our transformation has not been easy. But it has been necessary to leave behind a dying business model based on fossil fuels, and to create a new model, which is environmentally and financially sustainable.
We have written this paper to share our view on what it takes to speed up the transformation of the global energy system. Our analysis is based on credible and known sources, but we acknowledge that future projections are inherently uncertain. We do not intend to provide all answers on what it takes to limit global warming to 1.5°C, but we do want to stress the importance of a much faster transition from fossil fuels to green energy, and that we already have the necessary technologies at our disposal.