Cost of Replacing all Fossil Fuels with Clean Electricity by 2050
Contents of this page
Summary
In order to replace all fossil fuels with clean electricity, we calculate the world needs to spend about $105 trillion. This is more than the world’s total Gross Domestic Product, which was about $85 trillion in 2018.
If this is to be achieved by 2050, the world needs to spend about £9 billion per day from now until 2050.
If the whole world diverted all its military spending into this one task, it would take about 53 years to complete the job, and this is only one of many similarly expensive tasks that need to be achieved.
The Goal
The Paris Agreement adopted by 195 nations at the 21st Conference of the Parties to the UNFCCC in December 2015 included the aim of strengthening the global response to the threat of climate change by holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. [1]
In 2018, the International Panel on Climate Change (IPCC) issued a report which found that limiting global warming to 1.5°C would require “rapid and far-reaching” transitions in land, energy, industry, buildings, transport, and cities and global net human-caused emissions of carbon dioxide (CO2) would need to reach ‘net zero’ around 2050. [2].
In this article we will examine what it would cost to replace all fossil fuels by clean electricity. By “clean electricity” we mean electricity generated by renewables or by nuclear power.
We realise that some regard nuclear as not a clean energy source, but it is the only large-scale source of power currently available that does not directly produce carbon emissions and provides consistent power. The International Energy Authority (IEA) published a report in 2019, “Nuclear Power in a Clean Energy System” [3], which concluded that a failure to invest in existing and new nuclear plants in advanced economies would make global efforts to transition to a cleaner energy system drastically harder and more costly.
We also realise that other actions can help to reach net zero, such as improved methods of carbon dioxide sequestration and changes in people’s behaviour. But to give a simple analysis to scope the size of the problem, in this article we will assume that the reduction of emissions is to be caused entirely through elimination of fossil fuels and replace all current fossil fuel consumption with clean electricity generation.
And this might deliver a reasonably accurate figure for the size of the challenge for two reasons. In 2019, 840 million people still had no access to electricity [4], most of them in sub-Saharan Africa. Also power consumption in developed countries increases every year. So the need for energy is going to be significantly greater in the future.
So calculating what will be necessary to replace all current fossil fuel with clean electricity is perhaps a reasonable balance between increased demand for electricity and reductions in emissions caused by other factors.
Units of measuring energy
The unit of energy content of fuels and production of power stations that we will use in this article is the MTOE, meaning a million metric tonnes of oil equivalent.
1 MTOE is about half the annual production of a modern nuclear power plant, or about 22 large solar farms like De Aar in South Africa or 12 large wind farms in Africa [5], [6], [7], [8], [9].
The Cost of Building
By coincidence, the cost of building any of these forms of electrical power generation, nuclear, solar or wind, is roughly the same: about $9billion for each 1MTOE of capacity [5]. Nuclear is the most expensive and wind is the cheapest, at current prices.
The size of the problem
In 2018 the world used about 12000 MTOE of fossil fuels [10]. As we noted above, demand for energy will increase in the future but sequestration and other factors will also cause emission reductions, so we believe this is a reasonable figure to use in our calculations
How much would it cost to replace fossil fuels with clean electricity?
So the total cost of replacing all 12000 MTOE of fossil fuels currently used each year, at about $9billion per MTOE, would be around $105 trillion.
The annual cost depends on how soon we aim to reach the goal.
Extinction Rebellion’s Demand
Extinction Rebellion (XR) are demanding that “Government must act now to halt biodiversity loss and reduce greenhouse gas emissions to net zero by 2025” [11].
To reach that goal by replacing fossil fuel with clean energy, the global investment needed would be $57.9 billion per day.
In 2018, global gross domestic product (GDP) amounted to about $84.93 trillion [12].
So to meet the demand of XR, all countries would need to spend about 24% of their GDP on building clean power sources for the next 5 years.
When you consider the cost and the fact that all these new power stations would need to be planned, which would take years, one can safely say that this is not going to happen.
The International Panel on Climate Change target
In order to achieve the IPCC goal of net carbon zero by 2050, the world would need to build one new electricity generation plant with about 1 MTOE of annual energy generation every day for the next 30 years.
The global investment needed to achieve this would be about £9 billion per day or about $3.5 trillion each year for the next 30 years. This is about 4% of annual global GDP.
This is perhaps feasible but would take a huge amount of effort and investment, given the time taken to plan each station.
How could we pay for it?
How could the world find this money?
World military expenditure in 2020 was $1.981 trillion [13]. So if every country in the world stopped buying weapons and instead started using the money to build clean electrical generators, it would take about 53 years to complete the job..
This would be feasible in a peaceful and logical world. Unfortunately we live in a world of conflict and of nationalism in which nations regard their own interests as more important than the global interest. On the face of it this seems illogical, since their biggest challenge, climate change, is a global problem.
However looked at from the point of view of national governments, their primary responsibility is to protect their own population. There are therefore two conflicting views on how you do this. Do you need to protect people from climate change, which if unchecked will cause increasing and ultimately devastating problems in the future? Or do governments need to protect them from an immediate threat of invasion from a hostile power?
Clearly most governments would say the immediate threat is the more important, and they will consequently devote more resources to that rather than to the longer-term threat of climate change.
Likewise, the French experience of increasing the eco-tax on petrol in 2018 and the consequent national protests show that many people are more concerned with their daily cost of getting to work rather than the long-term objective of reducing carbon emissions. [14] So a carbon tax also seems a very distant prospect.
References
[1] https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
[3] https://www.iea.org/reports/nuclear-power-in-a-clean-energy-system
[5] Comparison of prices to construct 1 MTOE of electrical power generation.
| Nuclear Power: Hinkley Point C, UK | Solar Power: De Aar, South Africa | Wind Power: Lake Turkana, Kenya | |
| Power MegaWatt (MW) | 3200 | 175 | 310 |
| TeraWatt hours per year if operating continuously | 28.032 | 1.533 | 2.7156 |
| TeraWatt hours per year assuming 8 hours sunshine every day | 0.511 | ||
| TeraWatt hours per year assuming 35% operating capacity | 0.95046 | ||
| Annual oil equivalent TOE [6] | 2410318.143 | 43938.09114 | 81724.84953 |
| Annual oil equivalent MTOE | 2.410318143 | 0.04393809114 | 0.08172484953 |
| Number of plants needed to generate 1 MTOE annually | 0.41 | 22.76 | 12.24 |
| Cost of construction $million | 23000 | 400 | 680 |
| Cost per MTOE $million | 9542 | 9104 | 8321 |
| Reference | [7] | [8] | [9] |
[6] 1 MegaWatt hour (MWh) is 0.086 Tonnes of Oil Equivalent (TOE).
http://extraconversion.com/energy/terawatthours/terawatthours-to-tonnes-of-oil-equivalent.html
[7] https://en.wikipedia.org/wiki/Hinkley_Point_C_nuclear_power_station
[8] https://www.africanexponent.com/post/8795-the-largest-solar-farms-in-africa
[9] https://www.cnbc.com/2019/07/22/the-biggest-wind-farm-in-africa-is-officially-up-and-running.html
| Energy Source | MTOE in 2018 |
| Oil | 4662.1 |
| Natural Gas | 3309.4 |
| Coal | 3772.1 |
| Nuclear | 611.3 |
| Hydro | 948.8 |
| Renewables | 561.3 |
| Total for all energy sources | 13864.9 |
| Total Fossil Fuels | 11743.6 |
[11] https://rebellion.earth/the-truth/demands/
[12] https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/