EVs, which account for around 15% of auto sales today, are on course to reach a share of 40% by 2030. Latest IEA and World Energy Outlook report estimates that around 60% of the two- and three-wheelers sold globally in 2030 will be electric.
25 Oct 2023 | 4184 Views | By Ajit Dalvi
The International Energy Association has released the 2023 edition of the World Energy Outlook (WEO 2023), the most authoritative global source of energy analysis and projections. The study describes an energy system in 2030 in which clean technologies play a significantly greater role than today. This includes almost 10 times ...
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The International Energy Association has released the 2023 edition of the World Energy Outlook (WEO 2023), the most authoritative global source of energy analysis and projections. The study describes an energy system in 2030 in which clean technologies play a significantly greater role than today. This includes almost 10 times as many electric cars on the road worldwide.
Despite geopolitical friction, volatile commodity prices and uncertainty around costs, transformative changes in parts of the global energy system are coming into view. Electric vehicles (EVs) account for around 15% of car sales today, and are on course to reach a share of 40% by 2030 as per the WEO 2023’s Stated Policies Scenario (STEPS)
As per the projections depicted in the latest analysis, EV sales, which were 0.6 million units in 2015, are set to rise to 13.8 million units in 2023, and then take a 175% leap to 38 million units by 2030.
Getting on track to meet these targets, including net zero goals, has broad implications for future pathways. In India, it means every dollar of value added by India’s industry results in 30% less carbon dioxide (CO2) by 2030 than it does today, and each kilometre driven by a passenger car, on average, emits 25% less CO2.
As per the study’s projections, it is estimated that around 60% of two- and three-wheelers sold in 2030 will be electric, a share 10 times higher than today. India should account for a strong share of that. In CY2022, EV industry sales in India surpassed a million units for the first time. Of this, two-wheeler sales comprised over 600,000 units and registering a massive 305% YoY increase.
India's EV industry growth story is on the upswing and in the first six monnths of the current fiscal (April-September 2023) total EV retails at 738,844 units constitute handsome 51% year-on-year growth (April-September 2022: 488,074 units). For the calendar year to date, total EV sales are 10,89,347 units, up 60% (January-September 2022: 680,691 units) as detailed in the data table below. At this pace, India EV Inc is headed for record sales of 1.5 million units in FY2024.
India EV Inc is headed for record sales of 1.5 million sales in FY2024. While two-wheelers (397,399 units) account for 54% of EV industry sales in H1 FY2024, three-wheelers (296,401 units) have a 40% share.
Other key highlights of the WEO 2023 study are that by 2030, solar PV will generate more electricity than the entire US power system does currently; renewables’ share of the global electricity mix nearing 50%, up from around 30% today; and three times as much investment going into new offshore wind projects than into new coal- and gas-fired power plants.
All of those increases are based only on the current policy settings of governments around the world. If countries deliver on their national energy and climate pledges on time and in full, clean energy progress would move even faster. However, even stronger measures would still be needed to keep alive the goal of limiting global warming to 1.5deg C.
The combination of growing momentum behind clean energy technologies and structural economic shifts around the world has major implications for fossil fuels, with peaks in global demand for coal, oil and natural gas all visible this decade – the first time this has happened in a WEO scenario based on today’s policy settings. In this scenario, the share of fossil fuels in global energy supply, which has been stuck for decades at around 80%, declines to 73% by 2030, with global energy-related carbon dioxide (CO2) emissions peaking by 2025.
FIVE-PRONGED STRATEGY TO GET THE WORLD BACK ON TRACK The WEO-2023 proposes a global strategy for getting the world on track by 2030 that consists of five key pillars, which can also provide the basis for a successful COP28 climate change conference. They are:
- Tripling global renewable capacity;
- Doubling the rate of energy efficiency improvements;
- Slashing methane emissions from fossil fuel operations by 75%;
- Innovative, large-scale financing mechanisms to triple clean energy investments in emerging and developing economies; and
- Measures to ensure an orderly decline in the use of fossil fuels, including an end to new approvals of unabated coal-fired power plants.
KEY LEVERS FOR EMERGING ECONOMIES TO ACHIEVE CLIMATE TARGETS
According to the IEA report, clean electrification, improvements in efficiency and a switch to lower- and zero-carbon fuels are key levers available to emerging and developing economies to reach their national energy and climate targets.
In Indonesia, the share of renewables in power generation doubles by 2030 to more than 35%. In Brazil, biofuels meet 40% of road transport fuel demand by the end of the decade, up from 25% today. In sub-Saharan Africa, meeting diverse national energy and climate targets means that 85% of new power generation plants to 2030 are based on renewables. Significant progress is made towards universal access to modern energy, with some 670 million people gaining access to modern cooking fuels, and 500 million to electricity by 2030.
RENEWABLES COULD CONTRIBUTE 80% TO NEW POWER CAPACITY BY 2030
Renewables are set to contribute 80% of new power capacity to 2030 in the STEPS, with solar PV alone accounting for more than half. However, this uses only a fraction of the world’s potential. Solar has become a major global industry and is set to transform electricity markets even in the STEPS. But there is significant scope for further growth given manufacturing plans and the technology’s competitiveness. By the end of the decade, the world could have manufacturing capacity for more than 1 200 GW of panels per year. But in the STEPS, only 500 GW is deployed globally in 2030. Boosting deployment up from these levels raises some complex questions. It would require measures – notably expanding and strengthening grids and adding storage – to integrate the additional solar PV into electricity systems and maximise its impact. Manufacturing capacity is also highly concentrated: China is already the largest producer and its expansion plans far outstrip those in other countries. Trade, therefore, would continue to be vital to support worldwide deployment of solar.
This Outlook assesses the evolving nature of energy security fifty years after the foundation of the IEA. It also examines what needs to happen at the COP28 climate conference in Dubai to keep the door open for the 1.5deg C goal.