Study: Powerfuels can cover more than a quarter of final energy demand in a renewable global energy system in 2050.

Ecological and economic necessity to direct investments towards powerfuels, now / CO2-neutral production requires committed expansion of renewable energies and Direct Air Capture technologies

As global efforts to achieve climate neutrality increase, powerfuels will play a critical role in defossilizing the energy system of the future. Powerfuels will be particularly needed in hard-to-electrify applications, such as in the aviation and maritime sectors, and as a replacement for process feedstock currently derived from fossil resources. This is one conclusion of the study "Powerfuels in a Renewable Energy World" commissioned by the Global Alliance Powerfuels and conducted by the Finnish LUT University. It is based on a transformation scenario of a global energy system that consists entirely of renewable energy sources in 2050, in line with the Paris Agreement. Powerfuels are climate-neutral fuels and raw materials such as hydrogen, e-kerosene, e-diesel or ammonia, which are produced using renewable energy.

Andreas Kuhlmann, spokesman for the Global Alliance Powerfuels: "Alongside renewable electricity, powerfuels will be a pillar of the future global energy supply and an indispensable component of a climate-neutral global economy. The study results show that it is ecologically and economically imperative to shape the investment environment for powerfuels positively today, so that global markets can emerge in the future. This also means driving the direct air capture of CO2 forward, as well as the expansion of renewable energies. Both are essential for the CO2 -neutral production of powerfuels."

Specifically, the results show that powerfuels can meet more than a quarter (28 percent) of global final energy demand in 2050, at 43,200 terawatt-hours. Along with the direct use of renewable electricity, this makes them the most important global energy source in such a scenario. The use of powerfuels is not limited to individual sectors. The most significant use occurs in the transport sector with 23,000 terawatt-hours in 2050, followed by 15,500 terawatt-hours in the chemical industry. In the heat sector, a demand of 5,000 terawatt-hours is estimated in the study.

The study assumes that, depending on the type of application, different powerfuels with specific properties will establish themselves on the international market, including methanol, hydrogen, methane, ammonia and liquid energy carriers produced via the Fischer-Tropsch process. Sustainable CO2 sources will be fundamental for the production of carbon-based powerfuels, as their production will require around 6,000 megatons of CO2 annually. Most of this will be obtained by direct air capture, thus creating a closed CO2 cycle.

The cost-optimised scenario envisages global trading of powerfuels, implying that production takes place at the most favorable locations worldwide. Through global scaling, costs can fall to 50 to 80 euros per megawatt-hour in 2050. Compared with a pure self-supply scenario, Europe in particular would be able to reduce the cost of powerfuels by 15 to 30 percent compared to a self-supply scenario, through imports from South America, Africa and the Middle East. Especially in regions with high renewable energy potential, powerfuels can contribute to economic value creation and the development of a sustainable industry.

The size of such a global market would be around € 2.1 trillion in 2050. To establish it, investments of up to € 18 trillion would need to be generated in the coming decades, a large part of which would be invested in the development of wind and solar plants. This is roughly equivalent to the current projected investment needs of the oil and gas industry over the same period, in a business-as-usual scenario, according to most recent projections.

About the Global Alliance Powerfuels

The Global Alliance Powerfuels was formed in 2018 as an alliance of leading global companies and scientific institutions at the initiative of the German Energy Agency and aims to drive the market readiness and development of powerfuels worldwide. Together with 15 members and 20 partners, it is working to integrate powerfuels into the global energy market.


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