Transitioning to a decarbonised energy system by 2050 could lead to a global saving of at least $12 trillion, according to a study carried out by researchers at Oxford University.
The team behind the study say the findings show a win-win-win scenario in which rapidly transitioning to clean energy results in lower energy system costs than a fossil fuel system, while providing more energy to the global economy, and expanding energy access to more people internationally.
The study’s ‘Fast Transition’ scenario, shows a realistic possible future for a fossil-free energy system by around 2050, providing 55% more energy services globally than today, by ramping up solar, wind, batteries, electric vehicles, and clean fuels such as green hydrogen (made from renewable electricity).
Of the findings, lead author Dr Rupert Way, a postdoctoral researcher at the Smith School of Enterprise and the Environment, commented: “Past models predicting high costs for transitioning to zero carbon energy have deterred companies from investing, and made governments nervous about setting policies that will accelerate the energy transition and cut reliance on fossil fuels. But clean energy costs have fallen sharply over the last decade, much faster than those models expected.
“Our latest research shows scaling-up key green technologies will continue to drive their costs down, and the faster we go, the more we will save. Accelerating the transition to renewable energy is now the best bet, not just for the planet, but for energy costs too.”
Costs falling faster than predicted
The researchers analysed thousands of transition cost scenarios produced by major energy models and used data on 45 years of solar energy costs, 37 years of wind energy costs and 25 years for battery storage. They found the real cost of solar energy dropped twice as fast as the most ambitious projections in these models, revealing that over the last 20 years previous models badly overestimated the future costs of key clean energy technologies versus reality.
Professor Doyne Farmer, who leads the team that conducted the study at the Institute for New Economic Thinking at the Oxford Martin School, said: “There is a pervasive misconception that switching to clean, green energy will be painful, costly, and mean sacrifices for us all – but that’s just wrong. Renewable costs have been trending down for decades. They are already cheaper than fossil fuels in many situations, and our research shows they will become cheaper than fossil fuels across almost all applications in the years to come. And, if we accelerate the transition, they will become cheaper faster. Completely replacing fossil fuels with clean energy by 2050 will save us trillions.”