fuel, cost & demand
primary energy consumption
Taking into account the assumptions discussed above, the resulting primary energy consumption under the energy [r]evolution scenario is shown in Figure 26. Compared to the reference scenario, overall energy demand will be reduced by almost 50% in 2050. Around half of the remaining demand will be covered by renewable energy sources. Note that because of the ‘efficiency method’ used for the calculation of primary energy consumption, which postulates that the amount of electricity generation from hydro, wind, solar and geothermal energy equals the primary energy consumption, the share of renewables seems to be lower than their actual importance as energy suppliers.
future costs of electricity generation
Figure 28 shows that the introduction of renewable technologies under the energy [r]evolution scenario slightly increases the costs of electricity generation compared to the reference scenario.This difference will be less than 0.1 cents/kWh up to 2020. Note that any increase in fossil fuel prices beyond the projection given in Table 3 will reduce the gap between the two scenarios. Because of the lower CO2 intensity of electricity generation, by 2020 electricity generation costs will become economically favourable under the energy [r]evolution scenario, and by 2050 generation costs will be more than 1.5 cents/kWh below those in the reference scenario.
Due to growing demand, we face a significant increase in society’s expenditure on electricity supply. Under the reference scenario, the unchecked growth in demand, the increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s $1,130 billion per year to more than $4,300 bn in 2050. Figure 29 shows that the energy [r]evolution scenario not only complies with global CO2 reduction targets but also helps to stabilise energy costs and relieve the economic pressure on society. Increasing energy efficiency and shifting energy supply to renewables leads to long term costs for electricity supply that are one third lower than in the reference scenario. It becomes clear that pursuing stringent environmental targets in the energy sector also pays off in terms of economics.