Infographic: How the energy transition is starting to accelerate
The energy transition, the shift from fossil fuels to sustainable energy, is accelerating as the world seeks to halt climate change and consumers switch to electric vehicles.
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The current energy transition – the shift from fossil fuels such as oil and coal to sustainable energy sources such as wind and solar – is starting to accelerate. From just 1% of the global energy mix in 1950, renewable energy is now set to account for 50% of our energy needs by 2040.
Demand for renewable power is growing fast as companies commit to carbon net zero goals. Awareness of the damaging impact of greenhouse gas emissions has also increased in recent years, and the issue of climate change has now risen to the top of the global news agenda.
Many countries around the world have committed to target dates for banning the sale of polluting petrol and diesel engine vehicles in a bid to slow global warming. Norway will be the first country to ban the sale of new internal combustion engine (ICE) vehicles in 2025, with consumers only able to buy new electric vehicles (EVs) after that date.
Demand for EVs is growing as new models with longer-range batteries and cheaper price tags are released onto the market and consumers switch to greener modes of transport. However, sales of EVs still account for a small amount of all cars sold. In the UK, for example, EVs accounted for 11% of total passenger vehicle sales in 2020. This will have to rise to 100% by 2030 if the UK’s target to ban sales of new ICE vehicles by 2030 is to be met.
The infographic below gives a sense of the immense scale of the energy transition and the opportunities the change could offer investors.
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