Fossil fuel use could fall by 65 percent by 2050 in a net-zero global emissions scenario as the world sees more use of low- and zero-emission energy sources, according to a report by the Energy Regulator of Canada (CER).
Fossil fuels will still play an important role in the energy system, but most will be used in industrial facilities equipped with carbon capture technology or for non-energy uses such as asphalt, lubricants and petrochemicals, according to the report.
The CER report released Tuesday, titled “Canada’s Energy Future 2023,” outlines three scenarios and uses economic and energy models to explore how energy supply and demand could evolve in the coming years. One scenario assumes limited action to reduce greenhouse gas emissions, another scenario sees Canada reach net zero emissions by 2050 with the rest of the world progressing more slowly, while the third scenario assumes the world reduces emissions enough to limit the rate of global warming to 1.5 degrees Celsius.
In the net zero scenarios, in 2050 more than 99% of electricity will be generated from technologies with no or low emissions. Wind, nuclear, hydro, natural gas with carbon capture, utilization and storage (CCUS), bioenergy with carbon capture and storage (BECCS) and solar will account for most of the growth in the new generation during the projection period, as predicted by the report.
Wind will provide the largest amount of new generation in 2050, increasing ninefold from current levels in the global net-zero scenario. Wind is increasing its share of generation in most provinces, with significant growth in Alberta, Saskatchewan, British Columbia and Ontario. Hydropower generation, currently the largest source of generation in Canada, will increase by 26 per cent between 2021 and 2050, particularly in provinces that already have significant hydropower resources. Natural gas generation with CCUS will become “a key source of energy,” particularly in Alberta and Saskatchewan, where it will account for 13 percent of those provinces’ generation by 2050, the report said.
Meanwhile, fossil fuel generation without CCUS is forecast to decline rapidly due to increasingly strong climate policies. According to the report, the electricity sector will reach net zero emissions by 2035 and then become net negative, as a result of the use of BECCS. The negative emissions will be achieved by burning biomass to generate energy and then permanently capturing and storing carbon dioxide, which would otherwise be released naturally when plants die, according to the report.
In both net-zero scenarios, greenhouse gas emissions from oil and natural gas production and processing fall by about 90 percent in 2050 compared to 2021. CER sees increasingly strong climate policies , leading to CCUS adoption, technology and process improvements dramatically. reduce methane emissions and improve efficiency.
An anticipated decline in production in response to much lower crude oil and natural gas prices in the global net-zero scenario will be a key factor in reducing emissions. In this scenario, the CER projects that Canadian crude oil production will decline to 1.2 million barrels per day (MMbpd) in 2050, a 76 percent drop from 2022, while natural gas production will decline by 68 percent during the same period, reaching 5.5 percent. billion cubic feet per day (Bcfpd) by 2050.
Oil sands production, which accounted for almost two-thirds of Canadian output in 2022, will decline steadily after 2030 in the global net-zero scenario as global oil producers face a “shrinking market quickly,” the report said. Only the most efficient projects will continue to produce in 2050 as falling prices make it increasingly difficult for oil sands producers to recoup their operating costs and keep projects running, the report predicts.
The CCUS will be used to capture carbon dioxide emissions from the electricity, heavy industry and oil and gas sectors under both net zero scenarios. By 2050, nearly 60 million metric tons of carbon dioxide from these sectors will be captured through CCUS, which accounted for about nine percent of Canada’s total greenhouse gas emissions in 2021, according to the report
The CER also sees a robust hydrogen economy developing under both net-zero scenarios. Most of the hydrogen will be used in heavy cargo vehicles and in industries such as chemicals, iron and steel and oil refining, he said. The agency expects hydrogen use to reach more than 8.5 million metric tons by 2050, or 12 percent of total energy use. Hydrogen will be produced from a variety of technologies, including using natural gas as a feedstock along with CCUS, electrolysis with water and electricity, and biomass-based processes, according to the report.
“While the way we use energy in our daily lives would not change much in a net zero world, the fuels and technologies that power our energy system will undergo significant change, with widespread electrification and less dependence on of fossil fuels”, CER. Chief Economist Jean-Denis Charlebois said in a statement. “The scope of the transformation would be substantial of the energy system we have today.”
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