The race to clean electricity
What progress are OECD countries making towards electricity sector goals that will need to be met in the 2030s on the way to 2050?
For countries eyeing economy-wide carbon neutrality in 2050, zero carbon power in the 2030s is a crucial short-term target. Recent Ember analysis found that this timeline was the unspoken consensus behind US, UK and EU emission reduction plans, with power sector decarbonisation in the next 10-15 years underpinning longer term goals.
The Energy Transitions Commission has called for all ‘developed economies’ to commit to 2050 economy-wide net zero and near zero-carbon power sectors by the mid-2030s. 21 of 37 OECD countries have a 2050 net zero target in place, with some taking steps to set goals around coal phase out or clean power in the next decade and a half. While many OECD countries beat the global average for share of clean electricity generation, and from wind and solar specifically, the next decade will need to see a massive acceleration in investment and deployment to be on track for Net Zero.
The first step towards Net Zero
Progress since 2005
Over the last 15 years, many OECD countries have made slow and steady progress to increase their share of clean power. However, the next decade and a half will need to see a substantial ramp up in ambition to get to 100% clean by 2035.
A handful of OECD countries are at or near zero-carbon power already. The countries that rank highest for share of zero carbon power—Iceland, Switzerland, Norway, Sweden and France—have seen their shares stay near-stable since 2005.
Most OECD countries have moved towards a larger share of clean electricity in the last 15 years, with a few exceptions starting their energy transitions later. Chile expanded fossil use following 2005, but has seen that decline in the last five years as wind and solar generation picked up the pace. South Korea is only now just looking towards electricity sector decarbonisation; Ember’s Global Electricity Review found that the country has actually increased its share of electricity from fossil fuels since 2015. Japan and Colombia have also fallen behind with continued reliance on coal and gas, although Japan did see a fall in fossil generation in recent years with a 158 TWh decline from 2015 levels.
For OECD countries that were the closest to clean power in 2020, existing hydro resources and nuclear generation played a large part. Iceland’s power sector is fully decarbonised, with demand met by hydro and geothermal generation. Hydro has also unlocked near to zero carbon power for Norway and generates the bulk (382 TWh) of Canada’s 83% clean share, but these high rankings come with hefty caveats. Norway’s domestic electricity mix obscures the scale of its exported emissions through oil and gas extraction. And although Canada has a large share of clean generation, Ember’s Global Electricity Review found that its decarbonisation has stalled with insufficient ambition to phase out its remaining use of fossil fuels.
Wind and Solar
Denmark is the OECD’s leader for wind and solar. It has seen a massive expansion in wind generation in recent years, going from 20% (7.8 TWh) of its electricity production in 2005 to 56% (16.4 TWh) in 2020. Germany follows, with a third of electricity from wind and solar last year, making it top of the G20.
The question is now whether there is adequate ambition on growing wind and solar in the next 15 years to reach zero carbon by 2035. Australia, for example, has seen a boom in wind and solar generation, but with no ambitious emissions targets in place it still has one of the G20’s most carbon-intensive electricity grids.
Wind and solar will need to grow at an adequate pace to both meet growing demand and fill the gap left by coal and gas as they are phased out. Given the tight timeline needed for OECD countries to reach zero carbon power, wind and solar’s affordability and quick deployment have them poised for massive growth.
There are some positive signs that this growth is coming. The International Energy Agency recently forecast that renewables would account for 90% of total global power capacity increases in 2021 and 2022, driven by wind and solar additions. New wind & solar is now also generally cheaper than building new coal, and in many cases even cheaper than continuing to operate existing coal plants, as shown in analysis from last year.
The OECD will need to pursue a rapid coal phase out
In tandem with wind and solar growth, remaining coal in the OECD will need to be phased out rapidly in order to reach zero-carbon power in the next decade and a half. The Powering Past Coal Alliance calls for OECD countries to phase out coal by 2030, a message that UN Secretary General António Guterres has repeatedly championed. Climate Analytics analysis of pathways considered by the IPCC recommends the same timeline for OECD countries in order to stay on track for 1.5C.
Most OECD countries have seen coal decline in the past 15 years, and there is growing momentum within the group for coal phase out by 2030—14 countries have committed to Paris-compliant policies (phase out by 2030). However, total generation across the group was still at 1927 TWh in 2020. Bringing that to zero poses a significant challenge for the next ten years.
A handful of countries are responsible for most coal generation across the OECD, with varying progress on phase-out in recent years. Although the US has the largest total amount, it has seen coal fall -43% since 2015. Japan has seen only a -15% decline in the same time, and South Korea only a -10% fall.
Many OECD countries are still dependent on coal for a significant share of their electricity generation. Poland and Australia are the most coal-reliant OECD countries with 70% (109 TWh) and 54% (135 TWh) of electricity generated from coal in 2020 respectively. While coal has declined over the last 15 years in both countries, the pace is nowhere near fast enough to reach zero coal by 2030. Australia has no coal phase out target in place and Poland recently agreed to stop coal production in 2049, only one year before the EU’s 2050 economy-wide net zero target.
Other OECD countries that have coal heavy electricity mixes are likewise lacking realistic short term coal phase-out goals that would put them on track for 2035 zero-carbon power. With the exception of Israel, no OECD country that sources a quarter or more of electricity from coal has a Paris compliant coal phase-out policy in place. In addition to Poland and Australia, this includes Japan (29% of electricity from coal), Czechia (40%), Turkey (34%), Slovenia (26%), and South Korea (36%).
Looking towards 2035
To stay on track for mid-century economy-wide net zero goals, OECD countries will need to significantly ramp up ambition in the next fifteen years.
Sizeable investments in wind and solar will be critical, with an all out effort on building new capacity needed to simultaneously meet demand and replace fossil generation.
There’s a growing consensus that OECD countries need clean power by 2035, with coal phase-out by 2030 as an essential first step. There’s no time to lose.