DNV's Energy Transition Outlook UK 2026 has been published, reviewing the progress and barriers to net-zero, and concludes net-zero is likely, but only by 2098.

Highlights of the report show that worldwide fossil fuels are being replaced, for economic, energy security and job security considerations, with countries increasingly prioritising domestic energy, industrial preservation, and development.

The transition is seeing exporters support for oil majors, national oil companies, and associated supplier industry, while importers are building clean technology industries for domestic deployment and export. Oil and gas use remains significant, but global investments in renewables are surging with annual expenditure doubling over the last five years from $860bn in 2021 to $1.8tr in 2026.

Other good news is that batteries are consistently outperforming all mainstream forecasts, with installed capacity increasing 14-fold over the past five years, and while gas remains critical for balancing the grid, in the DNV forecast its share of generation will fall from 23 per cent to 8 per cent by 2050.

Other points of the DNV forecast see energy-related carbon emissions reduce 44 per cent from 39Gt today to 22 Gt in 2050. Power emissions lead with a 60 per cent reduction, followed by manufacturing (45 per cent) and transport (34 per cent). Direct air capture (DAC) will determine when net-zero is reached rather than how quickly emissions fall. DNV expects DAC removal will be 0.4GtCO2 in 2060, equivalent to 3 per cent of energy and process emissions that year, and 3.0Gt in 2100 against remaining emissions of 3.8Gt.

Despite this, net-zero emissions are delayed until the 2090s, and the world is heading for 2.3C of warming based on current IPCC climate sensitivity. Renewed climate ambitions are needed as limiting global warming to 1.5C is now effectively unattainable. The goal of keeping warming well below 2C is still attainable but requires stronger commitments.

Right now, transmission capacity and demand flexibility are not growing fast enough, and there are growing risks, including cyber attacks, and greater reliance on electricity increases vulnerability to disruptions. Only by expanding interconnection, storage, and distributed generation can system resilience be increased.

In a final, sobering, analysis, DNV forecasts that the world will reach net-zero in 2098 resulting in end-century warming of 2.3C. The 1.5C budget is exhausted in 2029 and the 2.0C budget in 2052. Cumulative emissions will exceed the 2.0C carbon budget by 420Gt. After 2060, cumulative emissions (260 Gt) are 62 per cent of the overshoot.

But, of course, things can change.

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