**Energy Transition on the Horizon: Peak Emissions Expected Soon**
The oil and gas industry has long been at the center of global energy production, but significant changes are underway. According to recent forecasts from DNV, the world is on the cusp of a major milestone: the peak of energy-related CO2 emissions. This development marks a turning point in the global energy transition, driven by plunging costs of solar and advancements in battery technology.
### The Role of Solar and Batteries
The drastic reduction in the cost of solar panels and batteries has revolutionized the energy landscape. Solar installations have surged, increasing by 80% in 2023 alone, with costs in many regions now undercutting coal. Cheaper batteries, which saw a 14% decline in cost last year, are making prolonged solar power delivery and electric vehicles more affordable. This shift is accelerating the exit of coal from the energy mix and slowing the growth of oil consumption worldwide.
### China’s Dominant Influence
China has been a linchpin in the global decarbonization efforts. The country accounted for 58% of global solar installations and 63% of new electric vehicle purchases last year, despite its status as the world’s largest consumer of coal and emitter of CO2. However, China’s dependence on fossil fuels is rapidly declining as it continues to invest heavily in solar and wind power.
### The Future of Energy Emissions
Despite these positive trends, achieving net zero emissions by 2050 remains a distant goal. DNV’s Energy Transition Outlook 2024 projects that emissions will peak this year but decline slowly thereafter, leading to a warming scenario of 2.2 degrees Celsius by the end of the century. The report emphasizes that this decline is far too slow to meet the stringent targets set by the Paris Agreement.
### Challenges in Hard-to-Abate Sectors
While solar and battery technologies are advancing rapidly, other sectors face significant challenges. The forecast for hydrogen and its derivatives has been revised down by 20%, from 5% to 4% of final energy demand in 2050, indicating slower-than-expected progress. Additionally, carbon capture and storage technologies are progressing but will only capture around 6% of global emissions by 2050, underscoring the need for a global carbon pricing mechanism to accelerate their adoption.
### Wind Energy’s Role