📊 EV’s Charts of the Week #111

Special: Nat Bullard's state of decarbonization and how to think about net zero

Hi,

We have a special edition today. I invited EV member Nat Bullard, one of the leading global analysts on energy, climate and technology transition towards net zero, to share his latest research with you. For the occasion, I’ve decided to remove the usual paywall and open this edition to all my readers.

Nat does a great job in helping us level set the state of the global energy system and how the transition to a post-fossil one is proceeding. Look out for really surprising insights, including gas peak, the new automotive giant and how far net zero pledges have really come.

Enjoy, and share Nat’s edition!

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Hi again, it’s Nat Bullard. I am an analyst and columnist writing on energy, climate, and technology. I am deeply interested in how the global economy might reach net zero greenhouse gas emissions by mid-century. Last week, I published my annual presentation on decarbonization, with a look into the past, present, and future of our intertwined energy, transport, industry, technology, and financial systems. Here are a few of my favorite slides out of 140. 

You can read my previous guest edit of the Charts of the Week from August 2022 here.

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Energy demand growth is constant but unequal

Global primary energy demand growth is basically monotonic. That said, it is not equally distributed. For the countries of the OECD, primary energy consumption peaked in 2007, the same year that ex-OECD primary energy consumption surpassed the OECD. Six decades ago, the OECD was more than 70% of global energy demand; in 2021, it was less than 40%.

Growth functions 

I imagine that many readers are aware of the record growth of wind and solar power capacity. What many – even those deeply enmeshed in energy – may not realize is the exact speed and scale¹ with which these technologies are changing the global power mix. In 2022, wind and solar added between 600 and 700 terawatt-hours of new generation, about as much as Canada or Brazil generate in a year. That is more incremental generation than natural gas has ever added in a year; it is twice as much as nuclear added at its peak in the mid-1980s. It is even more than any year of incremental growth in coal-fired power in the past three decades, with the exception of 2021 when generation increased as part of the post-2020 rebound in economic activity and power consumption. 

Motorization means electrification

Global passenger car sales peaked in 2017 at about 85 million (trailing 12 months). They have since fallen to below 70 million. During that same time, electric vehicle sales have increased an order of magnitude, from less than one million to more than 10 million. That means that not only are EVs an industry growth area, they are the only growth area, and have been for a half-decade. 

China is the world’s biggest auto market, having surpassed the US. Internal combustion engine car sales in China also peaked in 2017, and here again EVs are the only growth in the sector. China produced just under 800,000 EVs in 2017; it produced 6.7 million last year (and is bringing total car sales very close to its 2017 level). 

More striking to me are the data on China’s auto exports. China passenger car exports are only visible in industry association data starting in 2008. Last year, they exceeded 2.5 million, which puts China very close to Germany as an auto exporter (and not terribly far behind Japan). 

Net zero and doing hard things

I describe the progress on decarbonization as three overlapping, and accreting, S-curves. We began with renewable energy, limited in scope and highly specialized; we added energy transition, bigger and broader; now, we are entering a net zero era which will last decades at minimum. Net zero is both an evolution of intention, and a revolution in terms of capability and scale required to make it work.

One example is the commitments made to decarbonizing industry and petrochemicals. More than 70% of global alumin(i)um production capacity is covered by a net zero target; fortunately, most of its energy supply currently comes from hydropower, and less than a quarter comes from coal. Almost half of cement capacity is covered by a net zero target, but the sector uses coal for 55% of its energy. More than a third of steel capacity is covered, but nearly three-quarters of its energy comes from coal. Decarbonizing these sectors is a planet-scale challenge. 

Another net zero challenge is human capital. I am continually impressed by the students, young professionals, and entrepreneurs I meet who are dedicating their lives to deep decarbonization. However, the expertise that those groups possess is essentially absent in the global boardroom. Professor Tensie Whelan of NYU-Stern School of Business analyzed the boardroom of the Fortune 100 and found that while 29% of the 1,188 total board members have some ESG expertise, it contains very little energy expertise. A full 5% of Fortune 100 board members have some qualification in workplace diversity (which is good!), but only 1.2% have any qualification in energy. Just 0.2% have any expertise in climate.

👋 This is a small sample of the presentation. There is much more to read here. Questions, comments, requests? You can contact me here.

1.  Borrowing this appropriately memorable phrase from the eponymous book, with a strong recommendation to read it if you have not already.