A boom in the popularity of solar panels and electric cars could spark irreversible changes in the energy sector within three years.
By 2020, the global demand for coal and oil could peak and start to decline, according to a new report published this week by researchers at the Grantham Institute - Climate Change and the Environment at Imperial College London, and independent think-tank the Carbon Tracker Initiative.
The power and road transport sectors account for approximately half of fossil fuel consumption, so growth in the solar panel and electric vehicle markets can have a major impact on demand. The findings of this report could have serious implications for businesses and governments that supply these fossil fuels, say its authors.“Electric vehicles and solar power are game-changers that the fossil fuel industry consistently underestimates."
Expect the Unexpected: The Disruptive Power of Low-Carbon Technology, warns that fossil fuels may lose 10 per cent of market share to solar panels and electric vehicles within a single decade. In the past, a similar 10 per cent loss of power market share caused the collapse of the US coal mining industry.
Similarly, Europe's five major utilities lost more than €100 billion in value from 2008 to 2013 because they were unprepared for an 8 per cent growth in renewable power, of which solar panels played a big part.
According to the report, growth in electric vehicles alone could lead to two million barrels of oil per day (mbd) being displaced by 2025 - the same volume that caused a major oil price collapse in 2014-15. The report finds 16mbd of oil demand displaced by 2040 and 25mbd by 2050.
Emerging technology, such as printable solar panels, could mean the scenarios used in the study in fact still underestimate growth in the renewables sector.
... The report assumes that electric vehicles will be cheaper than conventional internal combustion engines by 2020.
The report finds that electric vehicles could have a fifth of the road transport market by 2030 and, with additional growth in hydrogen cars and oil/electric hybrids, conventional vehicles could account for less than half the market. By 2050 electric vehicles could grow to 1.7 billion (69 per cent of the market) while conventional vehicles would make up just 12 per cent.
The report is accompanied by an interactive dashboard so readers can delve into the results.