14 September 2022
- New study shows a fast transition to clean energy is cheaper than slow or no transition
- Idea that going green will be expensive is ‘just wrong’
- Green technology costs have fallen significantly over the last decade, and are likely to continue falling
- Achieving a net zero carbon energy system by around 2050 is possible and profitable
Transitioning to a decarbonised energy system by around 2050 is expected to save the world at least $12 trillion, compared to continuing our current levels of fossil fuel use, according to a peer-reviewed study today by Oxford University researchers, published in the journal Joule.
The research shows a win-win-win scenario, in which rapidly transitioning to clean energy results in lower energy system costs than a fossil fuel system, while providing more energy to the global economy, and expanding energy access to more people internationally.
The study’s ‘Fast Transition’ scenario, shows a realistic possible future for a fossil-free energy system by around 2050, providing 55% more energy services globally than today, by ramping up solar, wind, batteries, electric vehicles, and clean fuels such as green hydrogen (made from renewable electricity).
Lead author Dr Rupert Way, postdoctoral researcher at the Smith School of Enterprise and the Environment, says, ‘Past models predicting high costs for transitioning to zero carbon energy have deterred companies from investing, and made governments nervous about setting policies that will accelerate the energy transition and cut reliance on fossil fuels. But clean energy costs have fallen sharply over the last decade, much faster than those models expected.’
‘Our latest research shows scaling up key green technologies will continue to drive their costs down, and the faster we go, the more we will save. Accelerating the transition to renewable energy is now the best bet, not just for the planet, but for energy costs too.’
The researchers analysed thousands of transition cost scenarios produced by major energy models, and used data on 45 years of solar energy costs, 37 years of wind energy costs and 25 years for battery storage. They found the real cost of solar energy dropped twice as fast as the most ambitious projections in these models, revealing, over the last 20 years, previous models badly overestimated the future costs of key clean energy technologies versus reality.
‘There is a pervasive misconception that switching to clean, green energy will be painful, costly and mean sacrifices for us all – but that’s just wrong,’ says Doyne Farmer, the Professor of Mathematics who leads the team that conducted the study at the Institute for New Economic Thinking at the Oxford Martin School. ‘Renewable costs have been trending down for decades. They are already cheaper than fossil fuels, in many situations, and our research shows they will become cheaper than fossil fuels across almost all applications in the years to come. And, if we accelerate the transition, they will become cheaper faster. Completely replacing fossil fuels with clean energy by 2050 will save us trillions.’
The study showed the costs for key storage technologies, such as batteries and hydrogen electrolysis, are also likely to fall dramatically. Meanwhile, the costs of nuclear have consistently increased over the last five decades, making it highly unlikely to be cost competitive with plunging renewable and storage costs.
Professor Farmer continues, ‘The world is facing a simultaneous inflation crisis, national security crisis, and climate crisis, all caused by our dependence on high cost, insecure, polluting, fossil fuels with volatile prices. This study shows ambitious policies to accelerate dramatically the transition to a clean energy future, as quickly as possible, are not only urgently needed for climate reasons, but can save the world trillions in future energy costs, giving us a cleaner, cheaper, more energy secure future.’
Since Russia’s invasion of Ukraine, the costs of fossil energy have skyrocketed, causing inflation around the world. This study, conducted before the current crisis, takes account of such fluctuations using more than a century’s worth of fossil fuel price data. The current energy crisis underscores the study’s findings and demonstrates the risks of continuing to rely on expensive, insecure, fossil fuels. The research confirms that the response to the crisis should include accelerating the transition to low cost, clean energy as soon as possible, as this will bring benefits both for the economy and the planet.
The research is a collaboration between the Institute for New Economic Thinking at the Oxford Martin School, the Oxford Martin Programme on the Post-Carbon Transition and the Smith School of Enterprise & Environment at the University of Oxford, and SoDa Labs at Monash University.
Notes to Editors:
The full paper, ‘Empirically grounded technology forecasts and the energy transition’ is available at https://www.cell.com/joule/fulltext/S2542-4351(22)00410-X
About the Oxford Martin School
The Oxford Martin School brings together researchers from across the University of Oxford to seek solutions to the world's most urgent challenges. Currently 200 academics are involved in 30 pioneering research programmes. The School supports novel and high-risk projects that often do not fit within conventional funding channels, with the belief that breaking boundaries and fostering innovative collaborations can dramatically improve the wellbeing of this and future generations. Underpinning all our research is the need to translate academic excellence into impact – from innovations in science, medicine, and technology, through to providing expert advice and policy recommendations.
About the Institute for New Economic Thinking (INET Oxford)
The Institute for New Economic Thinking at the Oxford Martin School (INET Oxford) is a multidisciplinary research centre dedicated to applying leading-edge thinking from the social and physical sciences to global economic challenges.
INET Oxford has over 75 affiliated scholars from disciplines that include economics, mathematics, computer science, physics, biology, ecology, geography, psychology, sociology, anthropology, philosophy, history, political science, public policy, business, and law working on its various programmes. INET Oxford is a research centre within the University of Oxford’s Martin School, a community of over 300 scholars working on the major challenges of the 21st century and has partnerships with nine academic departments and colleges.
About the Smith School of Enterprise and the Environment
The Smith School of Enterprise and the Environment at the University of Oxford equips enterprise to achieve net zero emissions and the sustainable development goals, through world-leading research, teaching and partnerships.
About the University of Oxford
Oxford University has been placed first in the Times Higher Education World University Rankings for the sixth year running, and second in the QS World Rankings 2022. At the heart of this success are the twin-pillars of our ground-breaking research and innovation and our distinctive educational offer.
Oxford is world-famous for research and teaching excellence and home to some of the most talented people from across the globe. Our work helps the lives of millions, solving real-world problems through a huge network of partnerships and collaborations. The breadth and interdisciplinary nature of our research alongside our personalised approach to teaching sparks imaginative and inventive insights and solutions.