1.      Power generation

The power generation sector is responsible for the generation of electricity. This encompasses generation using fossil fuels (oil, natural gas and coal), renewable energy sources (such as solar and wind), and nuclear. Because about two-thirds of electricity is generated by the combustion of fossil fuels, this sector emits large quantities of greenhouse gases (GHGs).

1.1.  Activity level

The activity indicator for the power generation sector is the number of terawatt hours (TWh) generated. In 2010, the global total was about 21,500 TWh. It is expected to rise to roughly 40,000 TWh in 2050, an increase of about 87 percent. The growth is driven by rising demand from non-OECD countries and increased electrification of transport and buildings. This results in an increasing share of electricity in the overall global energy mix.

1.2.  Emission reduction potential

In 2010, the power generation sector emitted about 13 gigatons (Gt) of CO2. In 2050, the target for CO2 emissions is roughly 1 Gt, a decrease of almost 91 percent compared with 2010 levels. This can be achieved only through a global effort.

 

A wide variety of mitigation options are available in electricity generation, and therefore most mitigation scenarios assign a major GHG reduction to this sector (IPCC 2014a). As electricity generation shifts from centralized to decentralized and from fossil fuels to renewables, the carbon intensity from power generation is expected to decline significantly. To a lesser extent, the gradually increasing role of nuclear power (in the 2DS scenario, from 12 percent in 2010 to 17 percent in 2050) also contributes to a reduction in carbon intensity. Scenarios with similar activity levels, albeit a different technology mix, show that it is technologically possible to reduce the carbon emissions from power generation to zero by using only zero-emission technologies for power generation (WWF & Ecofys 2011). Similarly, in the IPCC AR5 Working Group III report on the mitigation of climate change, emissions from the power generation sector are expected to decrease, approaching zero between 2040 and 2050 (IPCC 2014b). However, this assumes that new technologies (e.g., carbon capture and storage or smart grids) are technically feasible. Studies show that a low-carbon power sector is technologically viable at an acceptable cost (IEA 2013c; McKinsey & Company n.d.).

1.3.  Carbon intensity pathway

While the amount of electricity generated almost doubles from 2010 to 2050, CO2 emissions must gradually decline until 2050, with an increased decline after 2020. This leads to a steady decline in the carbon intensity of electricity, with the amount of GHG per kWh reduced by more than 95 percent compared with 2010 levels in 2050 as shown in Figure I.1 .

 

 

Figure I.1 The carbon intensity of electricity must decline steadily as the GHG per kilowatt hour is reduced by 95 percent over 2010 levels in 2050

Source: based on IEA (2014).