Connect with us

Clean Energy

Breaking Down the $110 Trillion Cost of the Clean Energy Transition

Published

on

The following content is sponsored by the National Public Utilities Council

the

The $110 Trillion Cost of the Clean Energy Transition

The Energy Transitions Commission estimates that achieving net-zero by 2050 requires an average annual investment of $3.5 trillion globally between 2021 and 2050.

That’s a total of $110 trillion in capital investment, or 1.3% of projected global GDP, over the next three decades.

The question then arises: where should this substantial sum of money be allocated?

In collaboration with the National Public Utilities Council, this graphic delves into the answers to that question utilizing data from the Energy Transitions Commission.

How Much Will the Clean Energy Transition Cost?

Of the $3.5 trillion dollars that needs to be invested annually into a net-zero economy, around $2.4 trillion should flow into the electricity sector, according to the Energy Transitions Commission. This accounts for 70% of the annual investment.

Decarbonizing the electricity sector holds significant importance as it can serve as a catalyst for the decarbonization of all other sectors, including:

  • Buildings, which are becoming increasingly electrified through the growing use of heat pumps
  • Electrified road transportation
  • Electricity-intensive industrial activities, such as cement, steel, and chemical production
  • Green hydrogen production

Now, let’s take a collective look at the avenues of investment needed to reach net-zero by 2050 in more detail.

Sector SubsectorAverage Capital Investment Needed Per Year 2021-2050Total Sector Investment Needed Per Year 2021-2050
The Power SectorZero-Carbon Power Generation$1300B$2400B
Power Networks$900B
Power Storage and Grid Flexibility$200B
BuildingsRetrofits$230B$500B
Heat Pumps$130B
Renewable Heating$140B
TransportRoad Charging Infrastructure$130B$240B
Aviation$70B
Shipping$40B
Carbon RemovalNatural Climate Solutions (NCS)$100B$130B
Hybrid and engineered carbon removal solutions$30B
Clean HydrogenProduction$40B$80B
Transport and storage$40B
IndustryChemicals$40B$70B
Steel$10B
Cement$10B
Aluminum$10B

All figures are in real 2021 U.S. dollars

Overall, the diversity of the table above underscores the multifaceted approach required for a low-carbon transition.

Is the World on Track to Reach Net-Zero?

In 2022, the global capital investment in the clean energy transition totaled $1.1 trillion—approximately one-third of the required annual average to reach net-zero.

With that said, it’s important to note that the $3.5 trillion figure is an average across 29 years. Opportunities to catch up still exist, although the window is closing quickly.

According to the Energy Transitions Commission, investments must double from their current levels to around $2 trillion by 2025 and peak at around $4.2 trillion by 2040.

To remain on track to net-zero, therefore, we must make significant and rapid investments in all sectors, with a primary focus on the power sector.

Learn more about how electric utilities and the power sector can lead on the path toward decarbonization here.

Click for Comments

Clean Energy

Visualized: Renewable Energy Capacity Through Time (2000–2023)

This streamgraph shows the growth in renewable energy capacity by country and region since 2000.

Published

on

The preview image for a streamgraph showing the change in renewable energy capacity over time by country and region.

Visualized: Renewable Energy Capacity Through Time (2000–2023)

Global renewable energy capacity has grown by 415% since 2000, or a compound annual growth rate (CAGR) of 7.4%.

However, many large and wealthy regions, including the United States and Europe, maintain a lower average annual renewable capacity growth.

This chart, created in partnership with the National Public Utilities Council, shows how each world region has contributed to the growth in renewable energy capacity since 2000, using the latest data release from the International Renewable Energy Agency (IRENA).

Renewable Energy Trends in Developed Economies

Between 2000 and 2023, global renewable capacity increased from 0.8 to 3.9 TW. This was led by China, which added 1.4 TW, more than Africa, Europe, and North America combined. Renewable energy here includes solar, wind, hydro (excluding pumped storage), bioenergy, geothermal, and marine energy.

During this period, capacity growth in the U.S. has been slightly faster than what’s been seen in Europe, but much slower than in China. However, U.S. renewable growth is expected to accelerate due to the recent implementation of the Inflation Reduction Act.

Overall, Asia has shown the greatest regional growth, with China being the standout country in the continent.

Region2000–2023 Growth10-Year Growth
(2013–2023)
1-Year Growth
(2022–2023)
Europe313%88%10%
China1,817%304%26%
United States322%126%9%
Canada57%25%2%

It’s worth noting that Canada has fared significantly worse than the rest of the developed world since 2000 when it comes to renewable capacity additions. Between 2000 and 2023, the country’s renewable capacity grew only by 57%.  

Trends in Developing Economies

Africa’s renewable capacity has grown by 184% since 2000 with a CAGR of 4%. 

India is now the most populous country on the planet, and its renewable capacity is also rapidly growing. From 2000–2023, it grew by 604%, or a CAGR of 8%.

It is worth remembering that energy capacity is not always equivalent to power generation. This is especially the case for intermittent sources of energy, such as solar and wind, which depend on natural phenomena.

Despite the widespread growth of renewable energy worldwide, IRENA emphasizes that global renewable generation capacity must triple from its 2023 levels by 2030 to meet the ambitious targets set by the Paris Agreement.

Learn how the National Public Utilities Council is working toward the future of sustainable electricity.

Continue Reading

Clean Energy

Visualized: The Four Benefits of Small Modular Reactors

What advantages do small modular reactors offer compared to their traditional counterparts?

Published

on

The preview image for an infographic explaining the four benefits of small modular reactors (SMRs) over traditional nuclear reactors, highlighting SMR advantages related to costs, time, siting, and safety.

Visualized: The Four Benefits of Small Modular Reactors

Nuclear power has a crucial role to play on the path to net zero. Traditional nuclear plants, however, can be costly, resource-intensive, and take up to 12 years to come online. 

Small modular reactors (SMR) offer a possible solution. 

Created in partnership with the National Public Utilities Council, this infographic explores some of the benefits SMRs can offer their traditional counterparts. Let’s dive in. 

The Four Key Benefits of SMRs, Explained

An SMR is a compact nuclear reactor that is typically less than 300 megawatts electric (MWe) in capacity and manufactured in modular units. 

Here are some of the benefits they offer. 

#1: Lower Costs

SMRs require a lower upfront capital investment due to their compact size.

SMRs can also match the per-unit electricity costs of traditional reactors due to various economic efficiencies related to their modular design, including design simplification, factory fabrication, and potential for regulatory harmonization. 

#2: Quicker Deployment

Traditional nuclear plants can take up to 12 years to become operational. This is primarily due to their site-specific designs and substantial on-site labor involved in construction.

SMRs, on the other hand, are largely manufactured in factories and are location-independent, which minimizes on-site labor and expedites deployment timelines to as little as three years. This means they can be deployed relatively quickly to provide emissions-free electricity to the grid, supporting growing electricity needs

 #3: Siting Flexibility and Land Efficiency

SMRs have greater siting flexibility compared to traditional reactors due to their smaller size and modular design. In addition, they can utilize land more effectively than traditional reactors, yielding a higher output of electrical energy per unit of land area.

Rolls-Royce SMR, UK (Proposed)Median-Sized U.S. Nuclear Plant
Capacity470 MW1,000 MW
Area Requirement10 Acres*832 Acres
Land/Space Efficiency47 MW/Acre1.2 MW/Acre

*Estimated area requirement

Given their flexibility, SMRs are also suitable for installation on decommissioned coal power plant sites, which can support the transition to clean electricity while utilizing existing transmission infrastructure.  

 #4: Safety

SMRs have simpler designs, use passive cooling systems, and require lower power and operating pressure, making them inherently safer to operate than traditional reactors.

They also have different refueling needs compared to traditional plants, needing refueling every 3–7 years instead of the 1–2 years typical for large plants. This minimizes the transportation and handling of nuclear fuel, mitigating the risk of accidents. 

The Road Ahead

As of early 2024, only five SMRs are operating worldwide. But with several other projects under construction and nearly 20 more in advanced stages of development, SMRs hold promise for expanding global emission-free electricity capacity.

With that said, certain obstacles remain for the wide-scale adoption of SMRs in the United States, which was particularly apparent in the 2023 cancellation of the NuScale SMR project. 

To fully realize the benefits of SMRs and advance decarbonization efforts, a focus on financial viability, market readiness, and broader utility and public support may be essential.

Learn how the National Public Utilities Council is working toward the future of sustainable electricity.

Continue Reading
National Public Utilities Council

Popular