Renewables will account for an estimated 80% of global electricity production by 2050, according to a new report by DNV GL.
The Energy Transition Outlook 2018: Power Supply and Use report estimates that solar will account for 40% and wind 29% by mid-century as costs fall.
Electricity's share of energy demand will more than double to 45%, DNV GL said. This will lead to huge growth in transmission and distribution systems, which will more than triple in capacity.
Electrification of transport, buildings and manufacturing will be the main drivers for growth, the report added.
DNV GL said that more solar and wind will create a need for increased use of market mechanisms and changes to electricity market fundamentals in many countries.
“This requires major regulatory intervention. Market based price signals are crucial to incentivise innovation and develop economically efficient flexibility options,” it said.
However, energy will become more affordable, despite the need for rapid expansion of renewables and distribution networks.
The total cost of energy expenditure, as a share of global GDP, will fall from 5.5% to 3.1%, a drop by 44%, the authors said.
Absolute energy expenditure will grow by 30% to $6 trillion by 2050, they added.
DNV GL energy business chief executive Ditlev Engel said: “The Energy Transition Outlook has some very encouraging findings, and the good news is that the energy transition is achievable and affordable.
“However, the rapid transition we are predicting is still not fast enough to achieve the goal of the Paris Climate Agreement. If we are to decarbonize the world’s energy system at the required speed, we need to adapt and automate our electricity grids, and regulators and politicians will need to re-think, re-shape and take major policy decisions about market models.”